Coming to Mall Area Near You – an Amazon Mini-Fulfillment Center

December 13, 2020

There is some latest news in the market, with a report from Bloomberg last week that Amazon plans to open 1,000 or even more small delivery hubs in cities and suburbs all over the country.

The facilities will be mini-fulfillment centers and serve as what Amazon calls “delivery stations,” where its local delivery drivers come to pick up their deliveries for the day. Eventually, the number of these local facilities could rise to as many as 1,500, as Amazon aims to move inventory closer to customers.

This is what the Bloomberg article says:

Amazon is now consumed with honoring a pre-pandemic pledge to get many products to Prime subscribers on the same day, adding that with the holidays approaching, Chief Executive Officer Jeff Bezos is doubling down by investing billions in proximity, putting warehouses and swarms of blue vans in neighborhoods long populated with car dealerships, fast-food joints, shopping malls, and big-box stores.

In just a few years, Amazon has built its UPS,” Marc Wulfraat, president of the logistics consulting firm MWPVL International, told Bloomberg. Wulfraat estimates Amazon will deliver 67% of its own packages in the US this year and will eventually increase that to 85%. “Amazon keeps spreading itself around the country, and as it does, its reliance on UPS will go away.

With eventually more than 1000 of these mini-FCs, Amazon can cut the local advantage of rivals such as Walmart and Target, which can both leverage their brick and mortar stores to support e-fulfillment, either using buy online, pick up in-store, or direct deliveries from the store base.

Amazon views empty store space in malls as a weak option. Department stores such as J.C. Penney are often two stories and lack sufficient loading capacity, meaning they require extensive remodeling to accommodate an Amazon delivery hub.

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