Amazon Reportedly Looking At Network Of 1,000 ‘Hubs’ To Speed Delivery

Topline

The one-upmanship between retail behemoths Walmart and Amazon continues this week, with a report that Amazon plans to open up to 1,500 small delivery hubs in cities and suburbs across the U.S. to offer speedier delivery and gain ground in the current retail theater — serving the at-home consumer.

Key Facts

Big Number

640,000. That’s how many square feet are in Amazon’s newest fulfillment center in Beaumont, California, which opened in early September, a sign that the e-commerce giant is approaching distribution from new and traditional fronts.

Key Background

This week also marks the launch of the Walmart+ service, the nation’s largest retailer’s answer to Amazon Prime, a key driver of growth for Amazon. For an annual fee of $98 (or $12.95 per month) Walmart+ members get unlimited delivery from the brand’s 4,700 U.S. stores at no additional cost, along with fuel discounts. The coronavirus pandemic has made many consumers shy about visiting stores in person and most major retailers, including Target and Kroger, have stepped up efforts to accommodate consumers who’d rather not come inside. Using the existing store network as a mini-distribution hub helps retailers keep up their important “sales per square foot” numbers. Amazon, which gobbled up retail market share in part by offering speedy delivery, would be able to offer more grocery items within an hour if it could store goods closer to consumers’ doorsteps.

Further Reading

Amazon Plans to Put 1,000 Warehouses in Suburban Neighborhoods (Bloomberg)

Report: Amazon In Talks With U.S.’ Largest Mall Owner To Turn Former J.C. Penney, Sears Stores Into Fulfillment Centers (Forbes)