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Amazon Expands Counters in the U.S. to Strengthen Deliveries

Zacks Equity Research Inc. AMZN is firing on all cylinders to expand presence in the e-commerce space on the back of strengthening delivery system.

This is evident from the company’s latest expansion of its delivery program, namely Amazon Counter, to the United States.

The online giant has joined forces with Rite Aid Corporation (RAD) to offer parcel collection option to customers. This will allow customers to retrieve orders with same-day, one-day and standard shipping service at no extra cost.

As of now, the service is available in the United States in more than 100 Rite Aid stores. It plans to further expand the number by the end of the year.

Amazon Counter offers the technology to help large and established retailers to better manage the collection of parcels for customers.

The latest move bodes well for the company’s continued focus on strengthening parcel pick-up services.

Last month, it rolled out the same service in U.K. with Next stores, and in Italy with Giunti, Fermopoint and SisalPay stores., Inc. Price and Consensus, Inc. Price and Consensus, Inc. price-consensus-chart |, Inc. Quote

Is the Move Beneficial?

The move seems to be a win-win situation for both Amazon and Rite Aid.

Pharmacy chain Rite Aid has not been doing very well. The company incurred first-quarter fiscal 2020 adjusted loss from continuing operations of 14 cents per share against the Zacks Consensus Estimate of earnings of 2 cents.

Amazon pick-up counters could likely bolster customer traffic at Rite Aid’s stores, which in turn should prove beneficial for the company.

However, it is too early to say whether a customer would be willing to buy anything from a store while picking up Amazon parcels.

Meanwhile, this option to collect parcel from counter will help the company deliver better shopping experience to customers. This is likely to aid it in attracting more customers to its platform, which in turn will drive the top line.

Strengthening Delivery Services

Amazon’s recent move is in sync with continued focus on strengthening delivery capabilities.

The company recently rolled out Free One Day service, which covers more than 10 million products under categories such as beauty and baby products, books, daily necessities, along with devices, across the United States.

In the last reported quarter, the e-commerce giant revealed plans to gradually substitute two-day delivery with one-day delivery service. It rolled out one-day shipping service in 10,000 cities and towns in the United States for Prime members during the 2018 holiday season.

In addition to this, Amazon’s two-hour delivery service for natural and organic products such as meat and seafood, fresh produce and staples from the Whole Foods Market has expanded to almost 90 U.S. metros.

The latest initiative and all these strong endeavors are expected to expand the company’s footprint in the U.S. e-commerce and grocery retail space.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Autohome Inc. ATHM, Match Group, Inc. MTCH and Marchex, Inc. MCHX, each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Autohome, Match Group and Marchex is currently projected at 20.9%, 15.2% and 15%, respectively.

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