A Wal-Mart Pickup Grocery employee helps a customer in a test shop in Bentonville, Arkansas.
Rick Wilking | Reuters
As big box dealers, they host their own sales events during Amazon On Prime Day, expect them to advertise an asset that the e-commerce giant doesn’t have: numerous stores across the country where customers can quickly find their online purchases.
Amazon Prime Day starts at 3 a.m. ET Tuesday and lasts until Wednesday. target will have “Deal Days” and Best buy will boost Black Friday sales these days. Walmart is hosting its “Big Save Event” from 7pm ET Sunday through Thursday.
Buy online, in-store pickup options – such as roadside and in-store pickups – have grown in popularity as a safe and convenient alternative to searching store aisles during the coronavirus pandemic.
Best Buy introduced roadside pickups in almost all stores in the first few months of the pandemic. Walmart has approved tens of thousands of general merchandise for roadside pickup along with its wide variety of groceries in the past five or six months. Goal becomes add fresh and frozen foods To prevent roadside pickups at most stores until the holidays, shoppers can collect milk along with gifts for their family.
By offering an alternative to waiting for a package to arrive on the doorstep, retailers are trying to beat Amazon in a game of their own: They cut the time between clicking the “Buy” button and receiving their purchases. They also give buyers more control over when they will receive the item, which means the buyer doesn’t have to worry about theft and can hide a Christmas present from prying eyes.
The services could be a major differentiator this week and during the holidays as large retailers try to divert dollars away from Amazon.
An increase in sales
Target was vocal about the huge gains in services on the same day during the pandemic. The roadside pickup service, called Drive Up, increased more than 700% in the second quarter, and the in-store pickup option, Order Pickup, increased more than 60%.
On an average day in April, CEO Brian Cornell said the company filled more items and orders than last year’s Cyber Monday. It has used the services to attract new customers and get more of their business.
This holiday season marks Target’s second year with Drive Up in stores across the country. Around 250,000 items are sold that customers can pick up in just one hour after purchasing online.
On a conference call on the results, John Mulligan, Chief Operating Officer of Target, noted the “stickiness” of the service. After a customer tries Drive Up for the first time, the company sees a nearly 30% increase in the buyer’s total spend – both online and in-store.
For Best Buy, service has also driven growth. Online orders can be picked up from the roadside in about an hour. The company’s online sales increased 242% year over year in the second quarter. Approximately 41% of these online sales were either through online purchase and in-store pickup or roadside pickup options.
Walmart responded to the demand for these services by adding more roadside pick-up points and expanding its range to more than 160,000 items that can be ready within four hours, from barbecue sauce to headphones.
Roadside pickup has other business benefits. The need to ship a package from a store or warehouse to customers makes any online transaction more profitable. For example, Target stated that executing an order via Drive Up or Order Pickup is 90% cheaper than shipping from a warehouse.
But big box retailers need to demonstrate they can keep up as deep discounts and vacation shopping drive demand. In late March, shoppers began clearing the shelves of household clips and pantries and later looked for long-term home items, from puzzles to exercise equipment, resulting in stock shortages and delays.
“Scramble of the Season”
Some customers are not convinced of the convenience of the approach. According to a recent Accenture survey of 1,500+ US consumers, around 77% of shoppers want their purchases delivered direct to their home. Only 11% said they use contactless options such as lockers or roadside collection.
Customer patience has also deteriorated, leaving retailers with less leeway for out of stock or other issues. More than half of those surveyed told Accenture that if they had an unsatisfactory delivery experience, they would stop shopping at a retailer.
Kathy Gramling, consumer goods industry leader for EY in America, said the convenience of roadside pickup will diminish when customers have long wait times or other customer service issues.
“You think of the holiday park in years gone by. There was never a good moment in any of this,” she said. “I can’t think of a holiday parking lot right now where we’re trying to restrict the people who can actually go into the store. So in winter there’s a line outside again and we’re trying to get people through.” a parking lot when it snows or rains or sleet. “
Those challenging logistics, she said, could benefit pure e-commerce retailers like Amazon, who have a near-unique focus on delivering to customers’ doorsteps.
She said brick and mortar retailers need to manage their inventory well so the items customers want are a short drive from home.
“It works well when – and only if – you as a retailer know that 115 or Main Street store somewhere in the US has this actual inventory,” she said. “Otherwise, we’re facing a number of really disappointing moments when consumers go online and then can’t pick up in-store.”
“This is going to be the mess of the season.”