The Growth of In-Store Pickups for Online Shopping
Published on Sep 27, 2019
Today’s consumers love convenience.
Whether shopping from their couch or setting appointments to have their tires rotated, shoppers hate waiting for anything. And even while e-commerce with next day delivery options is growing, that 24-hour delivery service is still simply not good enough for some.
This reality has stimulated retailers (mainly grocery stores) to enact in-store pickups. These services allow consumers to make purchases online, wait a few hours and then head to the store to pick-up their order in-person.
The in-store pick-up and personal shopping program is a growing trend, but it is one that is here to stay!
In this blog post, we’ll look into this rapidly growing trend and offer a few tips for smaller retailers looking to create similar programs.
The Expansion of Retail Grocery Fulfilment Centers
There is a lot of debate about who was the first grocery store chain to activate in-store pickups.
Some give credit to the Kroger corporation, while others pass the buck to Walmart.
However, the primary concept of providing flexibility to shoppers and improving customer service with retail shopping can be traced to the mid-1990s. More specifically, the introduction of Price Club/Costco business delivery.
This service actually began in Southern California at many existing Price Club locations. Essentially, business owners would pick up a paper-generated order form to fill out. They would fax in their order. The order would then be pulled and palletized for delivery to customers using LTL-style delivery trucks.
Eventually, this program expanded with the merger with Costco and has morphed into an online platform, that is still in use in select locations. Modern grocery stores like Safeway, Albertsons, and others offer similar, consumer-targeted grocery delivery services. Companies like Instacart can expedite this service, with some customers receiving products within two-hours.
What is Driving the Expansion of In-Store Pickups?
Today the growing trend is to permit shoppers to order online, have everything bagged and picked up in-store the same day.
One of the biggest factors? Saving time.
The flexibility of having somebody do the shopping for you at the local grocery store inspires some customers to willingly pay the 10% upcharge for the luxury.
In fact, there are many industry experts that suggest Amazon acquired Whole Foods in 2017 to gain a physical retail footprint. Likewise, other Amazon-owned businesses such as Rite Aid and Kohl’s participate with in-store pickups and returns as of July 2019.
Target is another company that is rapidly embracing the in-store fulfillment concept, remodeling 300 stores per year to cater to a growing consumer who expects this service.
The Challenges Associated with In-Store Pickups
While retailers are rapidly embracing in-store pickups, there are some possible hurdles this shopping experience creates.
The main issue with e-Commerce sales and in-store pickups is trying to allocate employees as needed. Most grocery stores offer a 24-hour pick-up window. They do this so they can schedule dedicated ‘shoppers’ or order pickers in the early AM hours. This allows them to prepare those orders all at once, and move on to other traditional tasks.
However, not all products qualify for immediate in-store pickups. In fact, a lot of goods must be picked from shelves throughout the day. Of course, this slows down other operations in the store.
Reduced Impulse Purchases
A major component of retail merchandising is the power of impulse buying. Well, by allowing in-store pickups, consumers spend less time in stores. This means they are less likely to make impulse buys.
Most grocery stores strive to enhance the customer buying experience. Whether it’s the introduction of self-checkout islands or in-store pickups, allocating more employees to cater to online shopper orders takes away from the traditional retail shoppers.
The in-store pickup concept is growing and expected to continue expanding into 2020. It will be interesting to see how various types of retailers begin to embrace this new process in 2020.
Interested in learning more about in-store pickups and personal shopping programs? Reach out to the experts at Redwood Logistics today!