Amazon.com Inc. is testing a service that uses the company’s extensive network of drivers to fetch packages from retailers in malls and deliver them to customers.
The program, if it becomes a permanent part of the e-commerce giant’s delivery options, could help Amazon expand the variety of products it has available for fast shipping. Shoppers who want same-day or faster shipping can be shown products stocked at a local mall store. They order the item from the retailer on Amazon.com, and one of the Seattle-based company’s hired drivers delivers it.
The service started last year and relies on Amazon Flex drivers, who use their own vehicles to deliver packages. The geographic range of the pilot is unclear, but communications with drivers reviewed by Bloomberg benchmark malls with participating retailers in Chandler, Arizona, Las Vegas, Nevada, and Tysons Corner, Virginia.
Amazon spokeswoman Lauren Samaha said a “handful” of the company’s existing partner retailers are participating in the program, but declined to name them or reveal how much the service would cost customers or stores. She noted that retailers have offered their products for delivery on Amazon for years.
“This is just another way we can connect Amazon sellers with customers through convenient delivery options,” he said in an emailed statement.
The move could intensify already fierce competition between established retailers and startups working to quickly deliver products ordered online, often using the services of hired drivers. Instacart Inc. is expanding its offerings beyond groceries, DoorDash Inc. handles some deliveries for retailers like Macy’s Inc. Other Amazon rivals like Walmart Inc. and Target Corp. use work economy boosters to deliver some items from their shelves .
Under the new initiative, drivers stop at shopping malls instead of Amazon delivery stations. It’s the latest twist in Amazon’s complicated relationship with American malls, which are struggling to stay relevant as shoppers rush online.
Amazon already stocks its own urban warehouses with products from select third-party retailers designated for fast delivery. The company has also experimented with delivering items stored in partner warehouses.
Last year, Amazon began recruiting mom-and-pop stores, including florists and IT stores, in rural parts of the US to deliver packages, Vox reported this month. The company also recently began offering to fulfill orders offered for sale on select retailers’ own websites, an initiative Amazon calls “Shop with Prime.”
Amazon had historically relied on third parties like the US Postal Service and United Parcel Service Inc. for “last mile” trips from its warehouses to shoppers’ homes. The company began building its own delivery capability with Flex, which launched in 2015. Four years later, Amazon started the Delivery Service Partner program, which relies on contractors to deliver packages in blue Prime-branded vans. Today, Amazon handles most of its own deliveries in the US.
Building its own logistics operation helped fuel Amazon’s growth, but it came at a cost. Last month, the company reported its first quarterly loss in seven years as shoppers reverted to their pre-pandemic habits and acknowledged it is now overcrowded and has excess warehouse space. Delivery from other retailers’ stores, if successful, could mean Amazon has to build less expensive urban warehouses.