Amazon seems like a never-ending source of
news for commercial real estate. This world-famous retail giant is constantly
making headlines, setting trends, and disrupting industries all around the
globe.
And, this cycle is set to continue into 2020.
Amazon is rolling out a new partnership this year and it’s set to make huge
waves in retail - and, because it’s rooted in physical retail, in CRE as well.
Amazon is taking another step towards
brick-and-mortar with their recent announcement of their new in-store pick-up
counters. Here’s what commercial real estate professionals need to know about
Amazon’s newest line of business:
Amazon:
Coming to a Store Near You
2019 was a big year for Amazon’s expansion.
The online retail brand pushed the boundaries by adapting the module for
e-commerce package pick-up options. Amazon’s speedy shipping options sparked a
delivery war amongst some of retail’s biggest brands; including Target and
Walmart.
Now, Amazon has something new up their
sleeves. Their new store partnerships are bringing Amazon pick-up counters to
popular retail stores. This home-delivery alternative is reshaping the way
Amazon shoppers receive their purchases.
The pick-up counters are similar to retail’s
BOPIS trend, where customers buy products online and pick them up in stores,
except that Amazon played it smart. It offers shoppers greater convenience,
ease, and access to their e-commerce goods.
Instead of opening up new Amazon stores, the
company made a deal with pre-existing retail spaces. Brands like Health Smart,
GNC, Rite-Aid, and Smart Stores are sharing some of their physical space with
their new (and wildly popular) co-tenant: Amazon.
This module was a cost-effective strategy
played by Amazon since they didn’t need to invest in new locations or deal with
the leasing-and-buying process. Amazon Hub is also in charge of Amazon’s
multifamily lockers which grew in popularity throughout 2019.
Let’s take a look at how the Amazon Pick-Up
Counters will impact retail this year.
Increase
Foot Traffic for the Physical Retail Scene
Amazon’s Pick-Up Counters will be fueling an
increase in foot traffic to physical retailers.
Similar to the BOPIS module, store pick-ups
drive tons of shoppers into brick and mortar locations. Shoppers will likely
purchase additional products whenever they go in to get their pre-purchased
items.
This boosts business for the retail brands who
house the Amazon pick-up counters, which can play a huge role in reinvigorating
the retail scene.
Providing
Retail Brands with a Competitive Advantage
As of 2019, 89% of consumers were browsing Amazon’s
digital marketplace. 95 million people have Amazon Prime memberships in the US
alone, and the average member spends $1.4K on Amazon each year.
This massive demographic of consumers can be
tapped into by retailers who partner up with Amazon’s Pick-Up Counter project.
Amazon shoppers will be entering into physical store locations which expands
the potential reach of any company.
It is a proposition that’s offering retailer’s
a major competitive advantage as it has massive potential to boost business and
fuel new sales.
Commercial real estate should pay close
attention to the impact that Amazon’s Pick-Up Counters will have on the
industry this year and beyond.
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