The arms race between delivery services looking to expand their network of service points just got more intense.
FedEx (FDX) said on Wednesday it had signed a multi-year deal with drugstore operator Walgreens Boots Alliance (WBA) that will add about 8,000 Walgreens stores as points of service delivery. After what FedEx called a “small-scale” this spring, drop-off and pick up of pre-packaged and pre-labeledwill be available at almost all Walgreens stores by the fall of 2018.
The company and its main rivals, notably UPS (UPS) have sought in recent years to supplement their own vast networks of stores worldwide by collaborating with retailers that are closer to customers and offer additional spots where customers can ship or retrieve a package. Three years ago, UPS launched its Access Point service with neighborhood convenience and grocery stores in a limited of locations in Chicago and New York. Those Access Points in the U.S. Now number 8,000 locations.
One key benefit of such services is that shippers can leave a package when someone isn’t home to accept it, thereby lowering the number of failed delivery attempts, which are costly to the likes of FedEx and UPS and create backlogs. And in the case of Walgreens, the ubiquity of its stores was a selling point for FedEx.
“Our research has shown that customers rank pharmacies as a preferred location for accessing their e-commerce shipments,” said Raj Subramaniam, executive vice president, chief marketing and communications officer, FedEx Corporation. Last year, FedEx announced the expansion of its long partnership with Office Depot that offers some services within the office supplier’s stores.
As for Walgreens, the arrangement could lift shopper traffic, something all drugstore chains, including rivals CVS Health (CVS) and Rite Aid (which WBA is set to buy in 2017), are struggling with.