Amazon Post Office Trial and what’s bad about it

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Amazon have signed a deal with the Post Office for a click & collect trial, currently live in 200 Post Offices across 3 cities. The Amazon Post Office trial beats to the punch the one we’re waiting for – surely eBay is talking to the Post Office?

While the Amazon Post Office trial is billed as intended for click & collect by The Grocer, which broke the news, the likelihood is that it’s a lot more interesting as a highly convenient location for returns. Especially at the moment where so many consumers are still working from home and so have no difficulties receiving parcels, however this will change as the country slowly starts to open up.

Whether it’s click & collect or returns, it’s still a highly significant deal as it’s the first time the Post Office have handled services for any carrier other than Royal Mail. If you’re in Newcastle, Preston or Edinburgh then Amazon is at a Post Office near you.

So here’s where it gets interesting, we know that the Post Office has a long term desire to become a multi-carrier parcel hub rather than solely an entry into the Royal Mail network. Having signed a renegotiated 10 year deal with Royal Mail, they now have freedom to negotiate other deals and the Amazon Post Office deal will likely be just the first.

And where it gets even more interesting is that, while we don’t know the terms of the Amazon Post Office deal, we already know it’s not very good – probably for both sides – but it’s crucial for the Post Office as a line in the sand has been drawn and it signifies they are open for business with other carriers.

Why’s the deal not very good? Well 200 Postmasters have apparently been sent a smartphone with the Amazon app installed (not the consumer app, this is the logistics app used by Amazon delivery drivers). They need this to scan parcels which doubtless will trigger a courier to come and collect them.

A smartphone for a Post Office might not sound that big a deal until you think about three key ways the process is working.

Firstly, many Post Offices have multiple service windows and so one smartphone is going to be seriously inconvenient. One might wonder if any passwords will be needed for the smartphone or app and how many staff will need to be able to unlock it? We wish the Past Office good luck with traceability and figuring out which clerk accepted a particular parcel if they all use the same phone.
Next, there are some 11,500 Post Offices in the country and to roll this out nationwide would cost a small fortune in infrastructure. We’re talking multiple millions of pounds to give one smartphone per location for the Amazon Post Office deal to roll out nationwide.
What about Horizon? The Post Office are heavily committed to their in-house software solution and pretty much everything goes through it so why not Amazon? Well probably Amazon insisted on using their own app and to close the Amazon Post Office deal they rolled over and gritted their teeth.
I said three issues… but here’s the fourth – what if next time the Post Office sign a deal, with say eBay, and eBay also insist they use an eBay app – does that mean another smartphone app, who paid for the smartphones – would it be permitted to install both an eBay app and an Amazon app on the same device? And even more importantly, when you wander into the Post Office with a parcel to send or return, think about the decision process for the clerk who has to decide if it’s a Horizon process or one of any number of multiple apps on one or more smartphones that might be sitting on someone else’s counter and for which they’ve forgotten the password or failed to keep the phone charged.

We don’t know what volumes Amazon have committed to (knowing Amazon probably zero), or what the commercial terms will be (knowing Amazon Shipping charges to merchants, probably pennies or fractions of pennies per parcel), but what we can conclude is that this isn’t a great deal.

However it’s a hugely significant deal for the Post Office who, at least in three cities, are no longer exclusively a Royal Mail partner. They’ve signed a high profile carrier deal with a second partner and that opens the doors to more in the future, so expect them to be effusive when they report success of the trial because it doesn’t matter how well or badly it performs or how inconvenient it is for Postmasters. All that matters is that it’s a deal they can shout about.

Final thought, when will the Post Office start selling Amazon Shipping as a consumer carrier service? That would mean taking money for selling a label and there’s no way that can take place on a smartphone – cash in the Post Office has to go through the till and that means Horizon. Are you thinking there are more problems with this deal than upsides with the exception that it’s great PR for the Post Office contracts negotiation team?

Tamebay.com