Dive Brief:

• Discount grocer Save-A-Lot is adding Amazon PayCode to several stores in St. Louis, a new service that will allow shoppers to pick up and pay for Amazon packages with cash, according to a press release.
• Save-A-Lot will also offer Amazon Hub Locker in St. Louis stores for customers to pick up or return Amazon packages at no additional cost. The grocer wants to scale both services to 400 stores by the end of 2020.
• The added Amazon services are part of Save-A-Lot's larger effort to modernize its in-store experience and adding more convenience and innovation for customers. 

Dive Insight:

Amazon PayCode launched in the U.S. earlier this year through a partnership with Western Union. It initially ws offered in 19 other countries where cash is more common than debit or credit. At checkout, customers who want to use PayCode select the Amazon PayCode payment option to receive a QR code and number to reference when paying with cash.

To use Hub Locker, customer select a locker at their nearest Save-A-Lot while completing their Amazon checkout. Shoppers will receive an email with a barcode when their package is ready for pickup at their local store.

The prevalence of e-commerce has created new ways for consumers to receive goods including home delivery and in-store pickup. Although 82% of consumers still opt for home delivery, according to Digital Commerce 360, consumers are experimenting with different offerings. Forty-four percent have tried in-store collection while 39% have tried local pick-up point. Only 11% have experimented with a pickup locker.

A few other retailers are experimenting with different ways to help consumers get their packages. Kroger recently announced the pilot of a package delivery and pickup service at 220 stores called Kroger Packages Services, which will accept and securely store packages for customers from major carriers like UPS, FedEx and USPS. Customers can also drop off pre-labeled packages and unboxed items.

Hy-Vee expanded its Aisles Online Click-and-Collect Lockers program earlier this year, which hold online grocery orders for next-day pickup. Peapod has also experimented with pickup pods, while Kroger offers fulfillment of online orders at select Walgreens locations in Cincinnati. Amazon and Walmart have both piloted grocery pickup depots, with Walmart also piloting large grocery pickup kiosks in Texas and Oklahoma.

Earlier this year, Save-A-Lot was reportedly exploring a sale or possible investor takeover in the face of increasing competition and heavy debt. The retailer operates around 1,230 stores in 36 states and trails Aldi as the second largest hard discounter in the U.S. It recently started building Aldi-like stores in competitive neighborhoods in lieu of its traditional model of targeting underserved neighborhoods. The company has also tried a brand refresh and named a new CEO to buoy its performance in recent years.