According to the Wall Street Journal, Amazon's latest secret weapon are delivery lockers. The idea is to "combat a problem that has long bedeviled online retailers: failed package delivery."
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. 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.
Amazon avoids much of that with guaranteed delivery to its lockers, often housed in locations operating 24 hours a day. "When customers ship Amazon orders to an Amazon Locker, they can pick up their packages at a time and place that's convenient for them," said Amazon's Ms. Osako.
Amazon pays a small fee each month, akin to rent, to 7-Eleven and other store owners where it has lockers. Store owners declined to say what the fee was and a spokeswoman for 7-Eleven declined to comment.
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