“The Web giant has quietly installed large metal cabinets—or Amazon Lockers—in grocery, convenience and drugstore outlets that function like virtual doormen, accepting packages for customers for a later pickup. Amazon began putting lockers in Seattle, New York state and near Washington, D.C., about a year ago.
And the company is now ramping up the service. In the past few weeks, Amazon has opened its first lockers sites in the San Francisco Bay area.
By adding the lockers, Amazon is addressing the concerns of some urban apartment dwellers who fear they’ll miss a delivery or have their items stolen from their doorstep.”
“This is a great potential innovation for the segment of their customer base that has trouble receiving their packages – either because they live in an apartment or condo that is difficult to deliver to, aren’t home to sign, or because they are worried that their package might be stolen.
But the motive for the experiment is not purely an altruistic customer service one, companies like Amazon pay up to 20% more to have packages delivered to a residence. So, delivering a package to a locker helps Amazon save money too – helping to offset the costs of installing and maintaining the lockers. And as a bonus they serve as OOH (Out Of Home) advertisements in a context where people’s minds are already open to buying things.”
My first thought was “what a great idea.” My second thought was whether this innovation would work in Turkey. I decided that it would not make a whole lot of sense in a larger scale.
- Most parcels are delivered by private cargo carriers, requiring a signature and a photo ID at the point of delivery. Leaving packages on the doorstep is not common.
- Most of the apartment buildings in the cities have doormen who pick up packages for residents who are not present at the time of the delivery. My doorman called me on my mobile just the other day when I was at the office to ask me whether he should accept a package for me.
- Cargo carriers have many local offices which serve as lockers anyway. If you miss a delivery, you can pick it up at the local cargo carrier office for the next few days.
- Locker security would be a problem, I would estimate that insurance rates would be quite high, driving up the delivery price.
- Locker space rent would be high at secure locations such as shopping malls.
So kudos to Amazon for addressing a problem in the U.S. with an innovative approach but a good idea in one place does not necessarily work in another. One more example of how innovation is unique to market conditions – one cannot simply copy it and expect it to work.