Curbside pickup is here to stay and retailers are going all in
“That’s one of the benefits of Covid-19,” he added.
Curbside pickup, BOPIS (buy online, pick up in store) and other “omni-channel” approaches were designed to make shopping seamless, whether in-store, on the phone, in an app or on a desktop – before the coronavirus hit Already in the spotlight the crisis erupted in early 2020. But the pandemic has forced retailers to quickly adapt to new safety concerns and social distancing norms, and there is now no turning back for many consumers: 33% of adults under 50 who started using curbside pickup during the pandemic say it’s a habit they expect continue, according to study From the Associated Press-NORC Center for Public Affairs Research and the SCAN Foundation.
Retailers from major department stores to local hardware stores are keeping an eye on demand. But some may go further — by adding fees.
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“Retailers are starting to see it as a competitive advantage,” said Katherine Cullen, senior director of industry and consumer insights for the National Retail Federation. “They know it’s something shoppers love…it addresses the reality that consumers no longer have a real distinction between online or in-store.”
The latest round of earnings reports and government data from some of the largest U.S. retailers show that consumers are changing How and what they buy. Although they still consume, most of their resources go to necessities like gasoline and groceries due to historically high inflation. This leaves less room more Discretionary purchases such as clothing, consumer electronics, or home DIY projects.
The slowdown in consumer spending has implications for the wider economy, as it accounts for two-thirds of GDP. That could be a concern for policymakers and economists — especially as consumer confidence hovers near record lows. This is a combination that can drag the economy into recession.
To win over shoppers, retailers are focusing on improving the experience. Conor Flynn, chief executive of Kimco Realty, said a big draw was the variety of shopping options. The real estate investment firm embraced the omnichannel trend early on, partnering with retail tenants to place its branded neon green designated parking signs in its malls. The company trademarked “curbside pickup” even before the pandemic hit.
“I think consumer habits and behaviors are changing so quickly that there’s no one-size-fits-all approach,” he said. “It’s almost like how you shop for groceries today — there’s no consistency. People like three different grocery stores for three different things. I think the same is true of how people shop — online, in-store, Curbside, still buying online — they kind of want those menus of options that work that day, and whatever works for them.”
These options are especially useful for shoppers with young children. Jelisa Osouna, a single mother in Newport News, Virginia, opts for curbside pickup whenever her 1-year-old daughter is with her.
“It’s very convenient if I need to get something quickly,” said Osouna, 30, adding that she doesn’t have to drag her daughter and the car seat out of the car, she added. “It can be a lot at times, so the curb is perfect.”
Supply chain bottlenecks and labor shortages during the pandemic have also changed consumer expectations for wait times for online delivery orders. People are realizing that curbside and BOPIS are generally faster, Cullen said. These changes allow retailers to cut costs by persuading their customers to drive their own cars, use their own gas, and pick up from stores at their own time. Flynn said the BOPIS model also creates an opportunity for shoppers to pick up more items when they go in-store to retrieve their online orders.
“You get the halo effect,” he added. “It’s really powerful.”
But Amanda Wise said she uses curbside pickup in part to avoid impulse purchases. “The problem with Target is that once you’re in, it’s hard to get out without spending at least $100,” said the 34-year-old from Raleigh, North Carolina. Wise added that some stores have cheaper prices online, and she can use coupons and take advantage of cash-back apps or browser extensions on advance purchases.
Another benefit is that she can escape the summer heat. She said Wise drives an Acura with dark leather seats, so it was unpleasant to get back in her car, which was baked in the sun.
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Most major retailers do not charge curbside pickup fees, usually at least $30 to $35, as long as customers meet the minimum order requirements. But that could change, said Chad Lusk, a retail consultant at Alvarez and Marsal, noting that Sam’s Club recently added a $4 fee for customers who don’t have premium membership, Sam’s Club Plus.
“With the return of in-store shopping, retailers must now start comparing the cost of curbside fulfillment using additional labor with the cost of in-store shopping,” he said, adding that the Sam’s Club move could “serve as a way to [incentivize] Consumers are completely back in stores. “
Bob Hoyler, a retail consultant at Euromonitor International, said he wouldn’t be surprised if other warehouse clubs, such as Costco or BJ’s Wholesale Club, also adopted a fee-based approach, as customers are mostly attracted to volume discounts.But he doesn’t believe the fee will be Grocery stores, especially among consumers who choose curbside over delivery services like Instacart and Shipt to avoid added costs, including tipping.
If curbside users are struggling financially and grocery stores decide to charge, “you better believe [those shoppers] Alternatives will be investigated immediately,” Hoyler said.
Some retailers are changing their brick-and-mortar stores to better accommodate BOPIS and curbside pickup. Best BuyOn the one hand, it has reconfigured some stores to make room for back-office warehouse space, Lusk said.
“On a further scale, we see grocery stores investing in micro-fulfillment centers, automated facilities that pick and process orders for in-store pickup and home delivery, separate from the store itself,” he added.
Micro-fulfillment centers are typically used for one- or two-hour deliveries and are especially effective in densely populated areas. But Cullen points out that they are not prevalent in rural areas. Instead, omnichannel shopping options are especially beneficial for these communities.
These expanded shopping options are still in the “first inning,” Flynn said.
“I do think it’s going to evolve, but it’s clearly working and a lot of customers love it,” he added.