CASE PROBLEM 5-B 7-Eleven Wants a Chunk of e-Commerce A few years ago, management of 7 Eleven, a Tokyo-based Other retailers have experimented with pack- company with $7, 500 crinvenirace stores in the United age pickup services in their stores with mixed results States, Canada, and the rest of the would, was worried Walgreens and Rite Aid Corp. host lockers, and many about online shopping Although purchasing beer, milk, parking garages in New York City have lockers placed and candy bars over the internet might not be practical, against the wall near the entrance in the garage- 7- Eleven was losing out a little to e-commerce. Many The head of a household in a medium size city Consumers chance to purchase dems such as beauty was asked her opinion about the 7-Eleven locker pro- products, razors, and even batteries online. With more gram. She responded, "A good idea, Package drop-offs Purchases online, 7-Eleven would expect fewer sales and at private houses have become a joke. Thieves follow the less for traffic in their stores. About two-thirds of the delivery trucks into our neighborhood and then pick up 8607 7-Eleven stores in the United States and Canada the packages lying next to the front door. Unless you are are franchise owned. home at the time the UPS or FedEx truck drops by, you 7-Eleven leadership decided to get a slice of online can forget about receiving your package." revenue by installing lackers for e-commerce pickups at 700 stores in North America, The company announced Case Questions that it would hold packages from Amazon, FedEx, UPS, Walmart and several other retailers in these lockers. J. What problem or problems is the locker program supposed to solve? Customers who find it inconvenient or not possible to have packages delivered to their doorsteps, can open the 2, How would you rate the 7-Eleven program in terms lockers by scanning bar codes sent over e-mail to their of creativity and innovation? smartphones. 7-Eleven first took a pilot run with the 3. What do you think about the tradeoff between locker project with Amazon.com in 201 1. 7-Eleven renting locker space versus having the space The lockers are placed against a wall, and each unit available to sell more goods? consumes about the same amount of space as a large 4. How big a problem do you think theft of delivered shelf. Both 7-Eleven and the franchise operator receive a small commission from the package delivery service for packages is for online retailers? If this is a valid prob- lem, what creative solution can you offer? each unit placed in a locker. Although some selling space is sacrificed, 7-Eleven management anticipates that Source: Original story created from tacks and observations in the following People who visit the stores to pick up their packages will sources: Loretta Chan, '7-Eleven Wants to Be Your post Office," The Wall make a few impulse purchases at the store. Each square Street Journal, November 13. 2015, pp 81, 82: 7-Eleven Expands Amazon got in a typical convenience store generates about $600 Lockers, " MACS Online (www.nacsononline.com), November 13, 2015 annual sales. pp. 1-2. Karl Uformation, "7-Elven Adds More Lockers for E-Commerce Pickups, " wwwinvestplace com, November 12, 2015