Kristina: What is the motivation behind Amazon's Local Selling plan?
Dan Neiweem, Co-Founder & Principal, Avionos: Amazon's motivation behind its Local Selling plan is to enter the local market without having the overhead of opening their own locations everywhere at once. Similar to Amazon's online marketplace, Amazon can utilize third-party sellers, in this case with options for localized self-delivery and buy online pick up in store (BOPIS) offerings, to provide a local fulfillment option that keeps the transaction on the Amazon platform. The plan will also benefit the end consumer by providing an entirely new way to fulfill online orders through multiple options such as local home delivery, in-store pick up and local-only shipping hubs. This will create fast, convenient and flexible delivery and pickup options for customers within a businesses' local area, expanding consumers' access to small to medium-sized sellers and allowing third-party sellers to better support customers.
Kristina: How might this impact local merchants?
Harvey Ma, Senior VP of Omni, Consumer & Retail Performance of North America, NielsenIQ: Consumers across the country started making added efforts to support local businesses as thousands of small business owners abruptly shuttered their doors during the onset of COVID-19. As Amazon shoppers become familiarized with local selling, they will be quick to adopt this new platform given its convenience and seamlessness, plus the added benefit of knowing their dollars went to a local or small business owner.
With this new platform, local businesses will be able to address current opportunities through their new alliance with Amazon, including the ability to increase traffic, draft off of marketing and PR, attract new buyers and take advantage of Amazon's advanced digital as well as supply chain capabilities
Dan: With UPS and FedEx announcing surcharges ahead of the peak holiday shipping season, small businesses are going to likely struggle with shipping costs. Through Local Selling, third-party sellers will use their own delivery infrastructure to transport items to shoppers' doorsteps and allow Amazon to keep with the larger big box stores. Merchants can also provide in-store pick up options to cut out shipping fees entirely. These offerings enable local merchants to accommodate consumers more efficiently and effectively and create another touchpoint for the merchant to interact with customers, learn their habits and preferences and ultimately drive long-term loyalty and additional purchases.
Kristina: We've seen huge increases in BOPIS orders since the beginning of the pandemic - what is the draw to this kind of shopping?
Dan: Avionos data uncovered that reliability is the No. 1 factor consumers consider when deciding which brands to trust (45%). To deliver on this demand for reliability and convenience, retailers have found success in BOPIS offerings to provide shoppers real-time visibility into inventory throughout the purchasing and fulfillment process. When retailers consistently offer this kind of experience, along with a safe and efficient pickup process, greater customer trust and loyalty will follow.
Harvey: Many shoppers have increased their reliance on BOPIS purchases because this vehicle offers the same product comparison and easy search capabilities as any online shopping occasion, but also provides the added benefit of immediacy where shoppers can pick up their products within shorter timeframes.
We're seeing that as much as 40% of consumers are opting to shop more online because they now have the option to receive and pick up deliveries with new work-from-home allowances. Consumers may not necessarily need their BOPIS purchases now, but they want the flexibility to choose both where and when they're able to pick up their items.
Kristina: Do you expect this trend to continue through 2022 and even post-pandemic - assuming we ever get out of the pandemic?
Harvey: As shoppers continue to increase their cadence with BOPIS purchases, seeking out convenient and on-demand shopping experiences that allow them to purchase their products with increasing fulfillment flexibility, what was previously considered a trend is materializing as the new normal.
Dan: Similar to Amazon's Local Selling feature, retailers continue to meet consumer demand for innovative delivery and returns services through offerings such as BOPIS. We anticipate this trend is here not only because consumers expect it but because it offers a new level of convenience. Beyond the positive impact on customers, BOPIS also drives additional sales. In fact, 79% of consumers make additional in-store purchases when retrieving their BOPIS orders. Retailers who haven't implemented this offering, especially going into the busy holiday shopping season, risk losing customers for good.
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