business news in context, analysis with attitude

Bloomberg reports that Amazon "is testing a service that uses the company’s sprawling network of gig drivers to fetch packages from mall-based retailers and deliver them to customers."

The program, which started last year, uses Amazon Flex drivers from mall-based retailers and make one-day or two-day deliveries to local shoppers;  the orders are placed via Amazon's website.

Bloomberg notes it is unclear exactly where the program is being tested, though malls that are testing the service appear to include those in malls in Chandler, Arizona, Las Vegas, Nevada, and Tysons Corner, Virginia.  A national rollout of the service is possible if positive reaction warrants it.

Bloomberg writes:  "The initiative could escalate the already fierce competition between established retailers and startups working to rapidly deliver goods ordered online, often using the services of contract drivers. Instacart Inc. is broadening 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 gig-economy drivers to deliver some items from their shelves. 

"Under the new initiative, drivers stop at shopping centers instead of Amazon delivery stations. It’s the latest twist in the Amazon’s complicated relationship with American malls, which are struggling to remain relevant as shoppers stampede online."

Earlier this month, it was reported here and elsewhere that Amazon has been recruiting mom-and-pop shops in rural America to join an experimental delivery program. The company is paying participating small businesses a per-package fee to deliver Amazon orders within a 10-mile radius to their neighbors’ homes in states like Nebraska, Mississippi, and Alabama."

KC's View:

It has been clear to me for a long time that as Amazon built up its delivery and logistics infrastructure, it was going to look for new ways to use it - all that capacity and investment would make a lot more sense if it was accessible to other retailers.  

Bloomberg also reports that Amazon, "stuck with too much warehouse capacity now that the surge in pandemic-era shopping has faded, is looking to sublet at least 10 million square feet of space and could vacate even more by ending leases with landlords."  Seems likely that Amazon is going to get very aggressive about maximizing the use of all that capacity.