Amazon is testing deliveries for traditional retailers

Amazon is testing a service that uses the company’s sprawling network of gig drivers to pick up packages from mall retailers and deliver them to customers.

Should the program become a staple of the e-commerce giant’s delivery options, it could help Amazon expand the variety of goods available for fast shipping.

Shoppers who want same-day or faster shipping could be shown products that are in stock at a local mall. You order the item from the retailer on Amazon, and one of the company’s contracted drivers delivers it.

The service has been operational for the past year and relies on Amazon Flex drivers using their own vehicles to deliver packages.

The geographic reach of the pilot is unclear, but communications with drivers verified by Bloomberg point to malls with participating retailers in the US states of Arizona, Nevada and Virginia.

Amazon spokeswoman Lauren Samaha said a “handful” of the company’s existing partner retailers are participating, but she refused to name them or disclose how much the service would cost customers or stores.

She noted that retailers have been offering their products for delivery on Amazon for years.

“This is just another way to connect Amazon sellers with customers through convenient delivery options,” she said in an emailed statement.

The initiative could escalate the already fierce competition between established retailers and startups working to quickly deliver goods ordered online, which often use the services of contract drivers.

Instacart is expanding its offerings beyond groceries, DoorDash is handling some deliveries for retailers like Macy’s.

Other Amazon competitors like Walmart and Target use gig economy drivers to deliver some items from their shelves.

Under the new initiative, drivers will stop at malls instead of Amazon delivery stations. It’s the latest twist in Amazon’s complicated relationship with American malls struggling to stay relevant as shoppers storm online.

Amazon already stocks its own urban warehouses with select third-party merchandise destined for fast delivery. The company has also experimented with delivering items stored in partner warehouses.

Amazon last year began recruiting mom-and-pop shops, including florists and IT stores, in rural parts of the US to deliver packages, Vox reported this month.

The company also recently began offering to fulfill orders that are for sale on select retailers’ own websites, an initiative Amazon calls “Buy With Prime.”

Amazon has historically relied on third parties like the US Postal Service and United Parcel Service for “last mile” trips from its warehouses to buyers’ homes.

The company began building its own delivery capabilities with Flex, which launched in 2015. Four years later, Amazon launched the Delivery Service Partner program, which relies on contractors to deliver packages in blue Prime-branded vans.

Today, Amazon handles most of its own shipments to the United States.

Building your own logistics operation helped Amazon grow, but it came at a cost. The company last month reported its first quarterly loss in seven years as shoppers return to their pre-pandemic habits, and acknowledged it now has too many employees and excess warehouse space.

Delivery from other retailers’ stores could mean that if Amazon catches on, it will have to build less expensive, city-based depots.