Amazon Launches U.K. Parcel Delivery Program

Aug 21, 2012 2:01 AM  By

Amazon.com will soon begin delivery parcels to its U.K. online customers at nearly 5,000 convenience stores through collection network CollectPlus. Amazon began the trial run program a few months ago on a small scale with books and clothing and has now rolled it out nationwide.

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Consumers are able to pick up their orders from local shops that are often open late, rather than receiving a delivery notice that a package is available for pickup at the nearest Royal Mail location.

Paypoint, which manages CollectPlus, has a network of 4,900 stores willing to accept delivery of other people’s parcels to hopefully drive foot traffic into their stores. More than 85% of the U.K. population lives within one mile of a CollectPlus outlet.

Michael Harvey, chief operating officer for New York-based ecommerce solutions company CorraTech, said in an email this parcel delivery program works in the U.K. largely because its population of about 62 million a lot smaller than the U.S. population, and because 85% of the U.K. population lives less than a mile from a CollectPlus outlet.

“It would take a lot more outlets in the U.S. to achieve that level of penetration,” Harvey said.

Harvey believes that the demand for alternative delivery locations will be lower in the U.S. than in the U.K. and some other European countries.

“Amazon clearly will have a huge impact on CollectPlus, which is adding more than 1,000 affiliated locations a year in the U.K.,” Harvey said.

Alternative pickup locations are being set up in the U.S., Harvey said, but “generally to support Amazon initiatives like same-day shipping rather than because people can’t take delivery of their Amazon purchases at home.”

Harvey doesn’t think the CollectPlus affiliated stores in the U.K. will gain significant foot traffic from this new Amazon parcel program.

“It may well be the case that impulse purchases of chewing gum, magazines and cigarettes at any particular store may go up, but I’m not sure that’s a material consideration,” Harvey said. “The economics for participating in CollectPlus are pretty thin.”

In the U.S., Harvey could see an alternate delivery system like CollectPlus being established in urban areas where there are high population densities and where there is some friction associated with traditional front door delivery.

“One could imagine people in Manhattan being perfectly happy to swing by their local pharmacy to pick up their Amazon deliveries on their way home,” Harvey said. “This would also save a lot of delivery cost for Amazon who now doesn’t have to have couriers get into apartment buildings and up and down elevators to make deliveries.”

Jim Tierney (jim.tierney@penton.com) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.