Amazon Pick-up Lockers Coming To You Soon

Amazon Pick-up Lockers Coming To You Soon

Amazon Battles Thieves Who Chase UPS Trucks

Look For An Amazon Pick-up Locker Near Your Soon

The Wall Street Journal

By GREG BENSINGER

Bryan Thomas for The Wall Street Journal

An Amazon Locker in a New York City grocery store. The online retailer has opened at least 50 self-service pickup stations in a few U.S. cities.

Amazon.com Inc. AMZN -0.42%is doubling down to combat a problem that has long bedeviled online retailers: failed package delivery.

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. Amazon is also taking on some of its rivals who are shipping to appointed sites, such as other retailers or United Parcel Service Inc. UPS -0.18%stores.

"The home-delivery challenge has always been an issue for e-commerce in Europe and Japan, and is growing in the U.S., especially as thieves have moved into the game," said Fiona Dias, chief strategy officer for ShopRunner, which facilitates two-day delivery at about 60 retailers.

"It's easy to follow a UPS truck around and steal packages from doorsteps."

Amazon is borrowing a tactic from traditional retailers, like Wal-Mart Stores Inc. WMT -0.36%and Best Buy Co., BBY +11.76%that have added pickup sites so that online customers can stop by a store to get their merchandise. Without stores of its own, however, Amazon has to find partners who will provide space for the lockers.

Earlier

The addition of the Northern California locations brings to at least 50 the number of lockers that Amazon has in the U.S., according to its website.

The Seattle-based company also offers lockers in the U.K. and is "adding new Amazon Locker locations every week," according to its website.

The four U.S. cities with Amazon Lockers in place are in states that already charge Amazon customers sales tax, or have plans to do so within the next year. It's unclear if future locker sites would trigger a sales tax.

Spokeswoman Mary Osako declined to say how many lockers Amazon has or which cities it will target next.

Packaging and shipping orders is a central expense for Amazon, which has been building warehouses to speed delivery times.

The company spent $1.36 billion on order fufillment in the second quarter, up from $941 million a year earlier.

Amazon's locker program works fairly simply. Customers who ship their item to a locker—typically in 7-Elevens, grocery or chain drugststores—are emailed a code after a package arrives that unlocks the door holding their merchandise.

The lockers can hold only smaller items that weigh less than 10 pounds, such as books, DVDs or electronic devices like iPads. Users have several days to retrieve their merchandise.

Users don't pay extra to use the service but the locker program helps Amazon save on certain shipping costs.

ShopRunner's Ms. Dias said UPS and FedEx Corp. FDX +0.33%charge retailers as much as 20% more to deliver packages to residential addresses because it is more efficient to deliver multiple packages to a business address.

Failed deliveries are also more expensive for online retailers because those consumers are more likely to call customer service, switch to a competitor, or get a replacement item.