Tuesday, February 28, 2012

Changing the delivery system: Amazon's new locker delivery system

This week we talked about how logistic strategies will influence the supply chain management. In the case of Zappos.com, we get the core idea of delivery in supply chain –you should always put customer in the centre and emphasis on improving customer’s experience. Later, in the article of “The Threat of Global Gridlock”, it lists a few of the traditional delivery ways: by truck, train, ship, and air. No matter what way you are choosing for your delivery system, the key point as the article points out, is to leverage the time and cost.

We already discussed several ways to lower down time and cost referring to manufacture, design, and transporting between suppliers. However, how can we improve the way final goods are delivered to customer, especially, for on-line shopping, or daily grocery buying?

As Brick-and-mortar retailers like Wal-Mart and Best Buy already allow customers to pick up online purchases at physical stores, Amazon.com is reportedly giving that concept a shot through a partnership with 7-Eleven by promoting the new delivery locker system since the end of last year.

Let’s first watch the video below and see how it works:

The working procedure is like this:

When the package is actually delivered, the customer receives an email notification along with a bar code to his smart phone and heads to the 7-Eleven. There he’ll stand in front of the locker system, which looks like the offspring between an ATM machine and a safety deposit box. The machine will scan the bar code on his handset to receive a PIN number. He’ll punch that PIN number and retrieve the package.

Years from now, it might seem quaint to have a package delivered to your apartment door -- why risk it when you can have it electronically dispensed at your local convenience store? Some people may think this practice is a reverse of the modern technology.
 However, a lot people like me really appreciated this idea. And I think Amazon is really smart to use this strategy to satisfy their customer and cut down the cost of delivery home to home even though they need to spend extra money build up the lockers and maintain it to be safe. My reasons are as follow:
First is that it makes Amazon ordering easy. You only need to place an order with Prime and pick it up on the way home from work the next day. Presumably a delivery confirmation will let you know that it is waiting for you, but if you chose a store in your neighborhood for delivery, it’s not really very inconvenient just to go check.
Second is the environmental and practical advantage. The delivery guy needs to visit one destination, not many. This allows the delivery to uses less gas and puts the van on the road for less time. What is more, it even reduce shipping costs to customer, which makes them even more satisfied.
According the recent news, this kind of service is already available in New York and some other American cities, as well as some in UK, besides the first initial in Seattle. It’s conceivable that Amazon could leverage its own Amazon Fresh vehicles to deliver to the Amazon Locker system at some point in the future, creating essentially a complete delivery infrastructure of its own.

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  1. It's a nice blog with nice post. Glad to read this blog post. Thanks for sharing .

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