Walgreens and FedEx team up for exciting e-commerce shipping opportunity – how will it fair?
Earlier this year Walgreens and FedEx announced they will be teaming up to provide their customers with secure FedEx delivery locations. This long-term agreement stated that Walgreens will offer convenient access to FedEx drop-off and pick-up services at thousands of stores across the United States.
Raj Subramaniam, Executive Vice President and Chief Marketing and Communications Officer at FedEx, stated, “Walgreens, with its strong focus on customer care, is the perfect retailer to help us continue to meet the growing demand for convenient, secure drop-off and pick-up options. We look forward to offering these capabilities to customers, and continuing to meet their e-commerce shipping needs with these flexible options.”
After a small-scale rollout this spring, Walgreens and FedEx expect to make the program available at thousands of store locations by the end of 2017 and chain-wide at nearly 8,000 Walgreens stores by the fall of 2018.
Clearly, Walgreens is honing in on the customer experience and looking to get more foot traffic. By allowing both their current customers, whether picking up a prescription or just shopping around for some essentials, and potential new customers the opportunity to pick-up their packages in a new and secure location, Walgreens is ahead of the game in increasing and satisfying its customer base.
A similar strategy, buy online pick-up in store (BOPUS), is a tactic many retailers are moving towards. Adding BOPUS is proven to increase foot-traffic and 87% of customers are very likely to recommend BOPUS to a friend. So why is BOPUS so popular? The top three reasons that customers use BOPUS as an omnichannel service are because there are no shipping costs associated, it’s easier to browse for products and there’s no wait time (instant gratification).
However, a staffed pick-up and drop-off location at each U.S. Walgreens store may be difficult to accomplish. With the influx of e-commerce orders snowballing each year, one might question whether or not the typical corner Walgreens will have enough parcel storage space, let alone employees to manage it (especially during holiday peak season). Hopefully, Walgreens will be able to combat this with the same sort of system that Decathlon, a sporting goods retailer, has put into place.
Decathlon chose to place parcel lockers inside its stores to help aid in its BOPUS efforts. In fact, Decathlon has noted that since the installations of its parcel locker systems in 20 of its stores, 25% of customers bought additional products after pick-up, increasing the average basket by 40%.
With parcel lockers, retailers can take their BOPUS strategy to the next level. It allows their customers the same click-and-collect option they love without the hassle of waiting in line. Additionally, retailers can repurpose their staff to do other important tasks and not have to worry about organizing the giant heap of parcels that arrive each day.
Partnering with a major parcel carrier is a phenomenal way for companies to bring more customers into their stores. Likewise, FedEx is smart to team up with an already popular retailer to save money on shipping costs. But Walgreens isn’t the only company thinking about this incentive. Parcel lockers have been popping up at grocery stores, retailers and gas stations, all in hopes of creating a better customer experience. Now, how awesome would it be to be able to pick up your e-commerce package along with your morning coffee? Ahem, Starbucks and parcel carriers, get on that!