Amazon Trucks Pose Quirky Challenge to Physical Retailers

Sign that online sellers can't ignore brick-and-mortar options

Author: Andria Cheng

November 2, 2017

Around noon on Thursday, a garish, neon-light adorned delivery truck was parked outside of a Whole Foods store in New York. It looked like it might belong at a circus or on the grounds of a country fair, except that instead of peddling fortunes or cotton candy, it was selling Anova Sous Vide Bluetooth-connected Precision Cookers for $124.99, a 37% discount.

The only one way to get that cooker at that price was to buy through the Amazon app before picking it up from the truck on the same day, before the limited stock sold out.

Making a pickup at the Amazon Treasure Truck (Photos by Andria Cheng)

The roving "Treasure Truck" is the latest sign that Amazon and other pure-play online retailers probably can't maximize their growth without some sort of physical presence.  

Originally rolled out in Amazon’s Seattle hometown in February 2016, Amazon got a patent for the truck's “ornamental design” in January, and it's been fast expanding since. The concept rolled out to cities from Atlanta and Chicago and more recently to New York and San Francisco for a total of 25 US cities, with trucks designed for each city featuring different local touches.

Consumers sign up for texts to be notified of one sharply discounted deal that day in their city--anything from Ahi Tuna and wild Alaska salmon to Nintendo Super NES game consoles and Vitamix juicers--and buy in their Amazon app before picking up at the roving truck at the time and location they select.

Selling one item at a time won’t make a dent in Amazon’s sales, but it may do a few tricks for the Seattle giant. 

For one, having shoppers pick up at the truck achieves the goal of the same-day delivery without the heavy last-mile cost of shipping.  

The limited-stock and limited-time treasure hunt tactic also ups the fun quotient for Amazon, which has made a name for itself on price, service, selection and fast shipping, but not for diversion. (Online rival eBay, in its “Fill Your Cart with Color” marketing campaign this year, tweaked Amazon a bit when it asked, “When did shopping become so beige?”)

And the element of surprise taps into the appeal of retailers like TJ Maxx and Costco, with their treasure hunt environment. In fact, on Amazon’s Treasure Truck page, a banner led with this famous consumer call-to-action acronym, “FOMO,” or fear of missing out. Amazon has described the concept as “a totally new way to shop” with it.

For all the different buy and collect options that retailers have tested, the Treasure Trucks are a new twist, and yet another innovation in the increasingly inventive battle by retailers to create ever newer ways to get products in consumers' hands.

In Amazon’s recent earnings call, Chief Financial Officer Brian Olsavsky, without mentioning the Treasure Truck, said Amazon is “experimenting with a lot of formats” on the physical store front following its purchase of Whole Foods in August.

In fact, the Treasure Truck can do double duty, helping to drive traffic to Whole Foods stores. Thursday’s promotion involved trucks parking outside of different New York Whole Foods locations, and curious passersby were given not only stickers but also fliers with a pork tenderloin recipe promoting a pork tenderloin deal inside the store.

That and other moves by Amazon are likely only going to pick up pace in the upcoming holiday season. Morgan Stanley, in a report this week, estimated Amazon alone is driving up to half of overall US retail sales growth and will see its Q4 share of US online sales rising to 35% this year, up from 30% during the same time last year.

The Treasure Truck may also help Amazon fend off competition and accelerate the rate of its mobile app downloads. In the first nine months of this year, Amazon app downloads rose 10% to 21.8 million, 2.4 times those of Walmart, its nearest rival by that metric, according to the report