Adding pickup options for grocery shoppers is a natural extension to Instacart’s business model as adoption for this convenience continues to grow and is expected. Home delivery is not always the best and most convenient choice.
What will be interesting to see is how well the business model works between Instacart and the retailer because this approach now leverages employees from the retailer doing the pick process. They now having responsibility for properly storing the picked order within a scheduled pickup time window. The additional operational overhead is not insignificant for the retailer. They are essentially paying Instacart for technology but at what price?
In broader retail, the upsell potential for bringing buyers in to the store for pickup is well understood. It will be interesting to see if this is nearly as significant for grocery where it is more likely they get their pickup curbside and never enter the store.
My best advice for e-retailers looking to crossover to the physical space is to bring in brick-and-mortar experts to help with the effort. You don’t want to lose what makes you unique to the shopper, but you need to understand that the fulfillment process is dramatically different in the real world and digital retailers need to adjust their go-to-market strategies accordingly. Also, delivering an in-store experience that is compelling and tied closely with the online side of the business is critical.
In a perfect world, the retailer would know where the shopper is at all times during the purchasing decision. Not just a physical the place, but the mental place. They could then influence the process from start to finish, providing hints, warnings and whatever else is needed keep the shopper loyal. By not identifying the customer until checkout, retailers miss a huge opportunity to influence not only the purchase but also the process of engagement that keeps the shopper happy. It’s a tricky task since there has to be an incentive or a reason to ID yourself. But most shoppers will appreciate the attention and will show it with a bigger share of their wallet.
Transparency is the key here. I like the idea of talking about safety with these kinds of warnings, so the consumer knows exactly what potential issues they may facing. “Safe if used by” or “Use before XX/XX to ensure safe consumption” are two possibilities. This puts the onus on the manufacturer to ensure quality through that date and better guides the retailer on markdowns.
The key for these types of formats is assortment, convenience and fulfilment. Customers need to know the retailer understands them and their shopping behaviors, and the best way to accomplish that is having the right product at the right place and time. They also need to know the it will be as easy, if not easier, to shop there than online or at another brick and mortar while being priced similarly to those alternatives. This definitely takes a heavy effort, not only to line up the variables and conduct the analytics but to make sure the plan is consistently executed at the store level. Just throwing things at a wall to see what sticks won’t work.
It’s interesting that Trader Joe's hasn’t muddied its go-to-market strategy with an e-commerce offering yet. Some of these corporate values might not translate well into digital retailing and not just “the store is the brand.” Being a neighborhood store online would be very challenging, for instance. Would they have regional sub-sites to provide market differentiation?
Of course, they may not enter e-commerce at all, which has its own challenges in an increasingly omnichannel and mobile world. Sure they want to be the friendly neighborhood farmers market of the 21st century. But their customers want more than just a place to shop.
The key to traffic data is who a retailer shares it with, both internally and externally. By using this knowledge as a base of information for everything from shopper marketing and in-store staffing to merchandising and even loss prevention, retailers can better match their tactics to the needs and desires of the customer. By sharing the data with trading partners, the value chain becomes optimized for the purpose of pushing products and services down to the shopper and getting feedback from the shopper more immediately. This then lends itself to more collaboration and better returns for everyone.