U.S. Markets open in 7 hrs 6 mins

Amazon’s new Instant Pickup could help it dominate another industry

JP Mangalindan
Chief Tech Correspondent
An Amazon pickup location is seen at the University of California in Berkeley, California, U.S. August 14, 2017. Reuters/Jeffrey Dastin/File Photo

Amazon’s new Instant Pickup feature, which lets you order something on your phone and pick it up from a locker minutes later, may help the e-commerce giant conquer yet another industry in the months and years to come.  

“I wouldn’t be surprised if Amazon eventually started offering prescription drugs through Instant Pickup,” predicted Cooper Smith, director of Amazon IQ research for digital firm L2. “Today, it’s a can of Coke. Tomorrow, it’s your medication.”

Smith says Instant Pickup’s real targets in the long term aren’t the 7-11s and Wawas of the world but rather pharmacies like Walgreens and CVS (CVS). In May, CNBC reported that Amazon (AMZN) is getting serious about breaking into pharmaceuticals and plans on hiring a general manager this year to develop and lead a strategy on that front.

Obviously, Amazon is long way off from such a scenario — if it happens at all — but Instant Pickup also signifies another small push for the e-commerce giant as it extends its reach into brick-and-mortar.

That foray into physical retail includes much ballyhooed Amazon Go store, which employs a new kind of “No checkout” technology so people can just pick up what they want and go, is still in the experimental phase. The lone Seattle store is only open to Amazon employees at the moment. The company also just opened its seventh physical bookstore this May in New York City and, of course, announced that it’s buying the brick-and-mortar organic foods giant Whole Foods (WFM).

Still, Amazon has a long way to go compared to some of competitors that have managed to integrate online and retail shopping.

An interconnected retail strategy

Home Depot (HD), for instance, offers a seamless interconnected retail strategy called “Buy Online, Ship to Store” (BOSS), which lets shoppers pick from over 300,000 items online — more than 10 times the number of products in your average Home Depot location — and pick them up at their nearby store. It’s a compelling shopping experience that Best Buy (BBY) also offers.

Of course, depending on what shoppers want, there’s also something to be said about shopping in an actual physical retail store. If it’s a 4K TV, shoppers may seek out the advice of a Best Buy employee to help them make their purchase.

“People no longer go to stores for products per se,” explained Scott Galloway, professor of marketing at NYU’s Stern School of Business. “They go to stores for people. They can find the same product online for less. What they need is when they need one expertise, someone to get them the right product faster and get them on the way home.”

Amazon may very well be on its way to offering the kind of in-store experience that consumers crave, but it’s certainly not there yet. For now, it will have to be content with dominating e-commerce.

JP Mangalindan is a senior correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to jpm@oath.com. Follow him on Twitter or Facebook.  

More from JP: