Dive Brief:

• Amazon is launching five “Instant Pickup” stations where customers can grab “everyday essentials” such as snacks and drinks in as little as five minutes after ordering, according to Reuters.
• The stations are located at existing Amazon pickup locations near college campuses in Berkeley, California; Columbus, Ohio; College Park, Maryland; Los Angeles and Atlanta. Customers can choose from several hundred products, place their order and on-site employees will place them in designated lockers.
• Amazon says it plans to expand to more markets, including Chicago’s Lincoln Park neighborhood, by the end of this year.

Dive Insight:

Amazon continues to experiment with online ordering and fulfillment as it inches further into the food retail space. Earlier this year, the e-commerce giant began targeting click-and-collect shopping with its AmazonFresh Pickup locations in Seattle. The company also is slowly expanding its home delivery Fresh service in metropolitan markets across the country.

With its new Instant Pickup locations, Amazon is now targeting impulse buys and quick trips, which are becoming increasingly common among U.S. consumers. According to research firm IRI, quick trips to pick up items like beverages, grab-and-go foods and snacks make up more than half of store visits.

The move poses an imminent threat to convenience stores, drug stores and vending machine companies, which specialize in quick buys, particularly on college campuses where Amazon has targeted its new pickup stations. But as the locations expand, they also could impact grocers who have targeted quick trips by slimming down their stores and by offering more snacks, beverages, candy and grab-and-go foods at their front ends.

With Amazon’s pending $13.7 billion acquisition of Whole Foods, the new pickup stations gain an added dimension. Could the company offer the stations inside 365 stores, which target millennial shoppers partial to quick trips? It’s possible. At the very least, the stations could add a new layer of customer data that could help it improve online and in-store merchandising.

The long-term viability of Instant Pickup seems to hinge on how close the locations are to Prime-member-dense areas. The stations offer a larger selection of goods than the typical convenience store, but if a 7-11 or Wawa is closer for a consumer it’s hard to imagine they’ll pass that up in favor of an Amazon pickup site — especially if they’re just grabbing a snack or a soda. It’s also not clear how late Amazon’s Instant Pickup locations are open. C-stores that operate 24 hours may have an advantage with night-owl college students.

Whether Instant Pickup expands widely or not, the program’s success will likely be measured in the insights it provides the e-commerce giant’s broader operations. In a retailing world increasingly driven by consumer data, this is perhaps the biggest threat Amazon poses to grocers.