With Counter, Amazon Begins ‘Colonizing’ Traditional Retail Stores

Last week, Amazon announced Counter, a new set of customer pick-up locations inside 100 Rite-Aid stores, expanding to 1,500 Rite-Aid locations in the future. Amazon added that “thousands of additional locations [are] coming soon.”

Counter will be a delivery option (like Locker) for “tens of millions” of Amazon products and is compatible with all of the company’s shipping options. The company originally launched Counter in Europe with several traditional retail partners.

In April Kohl’s announced, starting this month, that it would accept returns for Amazon products at all of its more than 1,100 store locations. Kohl’s made the decision to expand its partnership with Amazon after internal and external data showed that stores accepting Amazon returns saw an increase in foot traffic to those locations.

The Amazon-Kohl’s partnership started in 2017 and was criticized by many in retail at the time. Part of Kohl’s motivation was to bring new and non-traditional (especially younger) customers into its stores, which appears to have worked. This is now Amazon’s pitch to other retailers: “The service [Counter] has been positively received, driving strong customer engagement and additional foot traffic for partners.”

The Counter strategy expands Amazon’s real-world pick-up and return locations significantly, although it doesn’t appear that Counter locations accept returns right now. There are already Amazon locker locations in 900 US cities and towns. Amazon also has roughly 40 physical stores (not counting Whole Foods) now open across the US: Books, 4 Star, Go and Presented By Amazon. There are nearly 500 Whole Foods in North America and the UK.

With the apparent success of the Kohl’s partnership and new buy-in from Rite-Aid, other retailers will be lining up to participate. Indeed, all but gone is the store-advantage that traditional retailers once had over Amazon. .

The future of retail is likely going to look like this: specialty retail/apparel, drug, home improvement, DTC brands (with stores), a very small number of general merchandise chains — and Amazon.

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