You are here
DALLAS — Being a traditional brick-and-mortar retailer is not stopping 7-Eleven Inc. from tapping into the opportunities that online shopping can bring.
In the past four years, the Dallas-based convenience store chain has expanded its locker pilot program with Amazon Inc. to include other retailers that ship packages through UPS or FedEx. In addition, the company last month announced it would install Walmart lockers in six locations in Toronto, according to The Wall Street Journal.
Through the service, customers in the United States and Canada can arrange to have online orders from retailers delivered to lockers at 200 locations. Customers open the locker by scanning bar codes sent over email to their smartphones.
The locker solution is a win for both 7-Eleven, which draws in customers, and the retailers fulfilling online orders. According to the WSJ report, locker solutions can ease the logistical headaches that have come with the increase in online sales, including overtaxed distribution networks and escalating shipping costs. For example, Walmart can save on extra home delivery costs by dropping packages off directly at lockers using its own truck fleet.
7-Eleven has felt less of this pressure because much of its business comes from impulse purchases made in person. But executives say they had to find a way to stay relevant as an increasing number of consumers now shop for groceries, personal grooming products and other convenience store staples online, WSJ reported.
The locker program does present its own challenges, however — namely, space. Each locker unit takes up about the same amount of space as one large shelf of merchandise.
The lockers are part of 7-Eleven's larger strategy to keep customers coming to its stores as more shopping moves online. Fees from the lockers and the additional foot traffic they bring could also help the chain carve out a small slice of e-commerce business, even if 7-Eleven is largely a brick-and-mortar business, Raja Doddala, 7-Eleven's vice president of new ventures and omni-channel, told the news outlet.
According to the report, 7-Eleven officials didn't disclose the fees that its partners are charged for the lockers, nor how franchise owners are compensated. They said the locker program is still in the testing stages and it is too early to tell if the added fees and customer traffic make up for the sacrificed merchandise space.
It is also too soon to know if competitors like Amazon and Walmart will be willing to share store space with each other if the program expands. But 7-Eleven hopes that by staying nonexclusive and opening its effort up to a variety of retailers, it can eventually make a good profit from the lockers.
"We want to be the Switzerland of multi-channel commerce," Doddala said.