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Amazon's Parcel Pick-up Counters to Boost Europe Presence

Zacks Equity Research

Amazon AMZN is firing on all cylinders to expand presence further in the European e-commerce market on the back of strategic partnerships, strengthening presence and robust retail strategies.

Reportedly, the company has joined forces with British clothing store, Next plc, to offer parcel collection option to U.K. customers.

We note that Amazon has opened new Internet equipped counters at Next stores from where customers can collect their packaged parcels. To facilitate this, the company is delivering several orders placed by U.K. customers to Next stores.

Further, the latest move bodes well for the company’s continued focus toward strengthening parcel pick-up services. The company is rolling out the same service in Italy at Giunti, a bookstore chain. Further, customers in Italy will be also able to collect their parcels at Fermopoint and SisalPay stores.

Benefits from the Move

The move seems to be a win-win situation for both Amazon and the above-mentioned stores.

Amazon pick-up counters will bolster customer traffic at these stores which in turn will benefit the store owners.

Meanwhile, this parcel collect option from counter will help Amazon to deliver better shopping experience to customers. This is likely to aid it in attracting more customers to its platform which in turn will drive the top line.

Amazon.com, Inc. Revenue (TTM)


Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. revenue-ttm | Amazon.com, Inc. Quote

E-commerce in Europe Holds Promise

The latest move of Amazon will aid it in expanding footprints in the U.K. and Italy which forms a significant part of Europe.

Per a report from Statista, revenues in U.K. e-commerce market is expected to hit $91.7 billion in 2019 which is likely to witness at a CAGR of 5.7% between 2019 and 2023 to reach $114.6 billion by 2023.

Further, the report shows e-commerce market in Italy is anticipated to generate $18.9 billion revenues in 2019 which is likely to witness a CAGR of 10.4% between 2019 and 2023 to hit $28.2 billion by 2023.

The company with is pick-up counters at Next, Giunti, Fermopoint and SisalPay stores will be able to expand customer reach in both the above-mentioned potential e-commerce markets. Additionally, Amazon’s robust automated lockers remain a major positive. It has over 2,500 such lockers at Morrisons, the Co-operative and Shell petrol station in the U.K.

Consequently, this will aid Amazon in rapidly penetrating the booming European e-commerce space which as per a report from Statista, is expected to experience 70.7% of user penetration in 2019. The metric is likely to hit 75.8% by 2023.

Further, this market is anticipated to generate $388.8 billion revenues in 2019 which is likely to witness a CAGR of 7.3% between 2019 and 2023 to hit $514.9 billion by 2023.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Ranks #3 (Hold).

Some better-ranked stocks that can be considered in the broader technology sector are eGain Corporation EGAN, PayPal Holdings, Inc. PYPL and Alteryx, Inc. AYX. While eGain sports a Zacks Rank #1 (Strong Buy), PayPal and Alteryx carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long term earnings growth rate for eGain, PayPal and Alteryx is currently pegged at 30%, 17.91% and 13.66%, respectively.

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