Retail chain 7-Eleven wants people to visit its store for not just their daily fix of cigarettes and gum but now to also pickup their packages from Amazon and Walmart.
Its new package pickup service is an expansion of its pilot test with Amazon, which it ran in 2011. The service is now materializing into 200 stores across North America hosting an automated package pickup service powered by UPS and FedEx, which will now also accommodate deliveries for Walmart at six of its locations in Toronto, Canada.
While 7-Eleven’s experiment backs the company’s effort to rethink its revenue streams as its consumer base moves towards shopping online, the service’s success rate runs a risk of losing its shelf space to the lockers that take up about the same space as a full-sized shelf.
The road to new profits, however, might not be all that smooth after all, analysts told The Wall Street Journal. According to Tim Barrett, an analyst at Euromonitor International, each square foot generates about $600 in sales at an average convenience store, WSJ reported.
“I don’t have data for what revenue comes from this to us, about how much [these customers coming in] are buying,” Mohammed Uddin, a 7-Eleven manager in Toronto, told WSJ. In the store, Uddin said, they had to remove a rack of two-liter sodas for the new Walmart lockers. For now, they “are in the cooler … if [customers] don’t see it, sometimes they don’t ask for it, and we lose the sale,” he said.
Even though 7-Eleven’s plan to monetize this offering remains unclear at the moment, it appears to be a win-win situation for the retail chain and its partners, Amazon and Walmart. With the new lockers in place, 7-Eleven is bound to see fresh foot traffic in its stores, which aligns well with its impulse buying business model. As for Amazon and Walmart, they will save much more on shipping costs and will essentially free themselves from being forced into signing deals with shipping companies at undesirable rates.
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