America’s Drive-Through Future

Discussion
Mar 31, 2010
George Anderson

By George Anderson

As Sandra Jones’ article on the Chicago Tribune website points out,
Americans are used to going the drive-through route to get their fast food
meals, prescription meds and do their banking.  In the future, it’s possible
that the older, web surfing versions of our current selves will be also hitting
the drive-through to pick up groceries, consumer electronics and other items
sold in a wide variety of retail stores.

Today in the Chicagoland market, there are a number of chains, including Meijer,
Sears and Wal-Mart Stores, that are testing drive-through services.

"This is our first shot at this," Rob Fleener, vice president of
business development at Meijer, told the Trib. "There are a lot
of things we’ll do to improve this once we decide to roll it out. Right now,
we’re learning as much as we can."

Meijer is testing GroceryExpress drive-ups at stores in St. Charles and Aurora.

Will
Ander, a partner at McMillan Doolittle, said retailers have tried to figure
out how to add drive-throughs in the past with little success.

"The real
challenge is, how do you fill a complex order?" Mr. Ander
said. "You can’t have (clerks) running all over the store."

Sears’ MyGofer format has sought to deal with the complexity issue by eliminating
the store and having shoppers drive up to warehouses that make it easier for
workers to pick orders.

"At this point in retail, everybody is just trying to capture another
little wedge of the pie," Candace Corlett, principal at WSL Strategic
Retail, told the Trib. "You can’t overlook anything. It’s a new
game, and every option has to be considered."

Discussion Questions:
Will drive-throughs become a common fixture for retail stores in the future?
What are the biggest factors preventing drive-throughs at retail today?

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24 Comments on "America’s Drive-Through Future"


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Roger Saunders
Guest
11 years 1 month ago
This comes from personal experience, as my partners and I had 28 QSR Restaurants (Wendy’s and Sister’s). The drive through is a terrific application — even in the 70’s/early 80’s we were doing 40%+ off the drive-through. However, executing this concept correctly, to meet the consumers’ needs and expectations, touches on a great number of issues. It starts with proper real estate. It flows through to having product availability in a convenient manner for associates, who can quickly address the consumers’ reasons for being at the ‘window’ in the first place. (We drove for 30 second service, and it was a challenge in various shifts.) Retailers HAVE TO TRAIN THEIR STAFF HOW TO SERVICE ON THIS LINE. Having added equipment to simplify communication is important. Limited items/weight going out the window has to play a role — you don’t want to have spillage and incorrect orders. This is a truly great concept for the right retailers. It is NOT for everybody. Balance it with ‘sticking to the knitting,’ and see if sales/service are enhanced inside,… Read more »
Gene Hoffman
Guest
Gene Hoffman
11 years 1 month ago

Roger’s comments are savvy. Drive-thru’s future value rests with two factors: 1) the exuberance of the economy, and 2) the growing desire of Americans to do a lot more things than in-store shopping. If those two factors arise, but abiding by Roger’s guidelines, there can be additional opportunities for drive-thru retailing.

Max Goldberg
Guest
11 years 1 month ago

Drive-through can be useful for simple orders that consumers book online. More complex orders would tie up too much staff time to fill. Retailers may test drive-through to see if it catches on, but there are so many other areas of the retail experience that could be improved before devoting time and resources to a tiny niche of the business.

Marge Laney
Guest
11 years 1 month ago

Retail can learn a lot from fast food restaurants and how to run an efficient and profitable drive-thru operation is one of them. A typical fast feeder drive-thru produces about 85% of total sales; obviously their highest conversion zone. They dedicate staff and technology that make the process highly efficient for the restaurant and quick and easy for the customer. Any retailer who is thinking about this would be well served to study a successful fast feeder’s drive-thru process. You want Cheetos with that?

Steve Montgomery
Guest
11 years 1 month ago

The drive through concept has been around a long time. As has been pointed out in the article by Will Ander, it works best for small, not complex orders. Having just worked with a c-store client who was considering adding a drive through window, the issues mount up fairly quickly. What items do you want to sell (age restricted items – beer, cigarettes, etc. – add another level of complexity)? Does this require adding dual equipment (fountain machines, coffee pots, etc.) etc., etc.? There have been chains that have had success with very limited product selection such as Swiss Farm Stores in PA.

Ironically, true drive throughs have been a part of the c-store industry for some time. In these instances, the customer actually drives through the store and runners get the items, bag them and collect the cash. Think of a car wash with groceries. Generally, they are small or independents and not chain operators.

Kevin Graff
Guest
11 years 1 month ago

Drive-throughs are a home run for some businesses already, but the extent to which they can be rolled out to other categories is somewhat limited (beer and liquor stores, pet food stores).

The challenge is that you cut off the potential added sales generated when the customer comes into the store. Think about your trip to your pharmacy. How often is it that you just pick up your Rx and nothing else? All of those brilliant front shops in the pharmacy were put there for a reason.

So, while I think the potential is there for a few others to jump on this idea, most will probably find it’s just not that good of an idea.

Nigel Fenwick
Guest
Nigel Fenwick
11 years 1 month ago

Any business model that is designed to save consumers time is likely to succeed provided that the experience meets expectations. The challenge with any drive-through operation (as we all know if we’ve ever sat in a slow drive-through pharmacy line) is ensuring the time the customer spends waiting is less than the time it would take them in-store to purchase the same items. With complex orders, this becomes more challenging. Logistics of order processing and the ability to forecast traffic flow become critical to success.

Retailers exploring this option might learn something from Disney and think about how to manage time waiting in line as part of the shopping experience. By transforming wait time, retailers can effectively eliminate this from the shopper’s perceived time to complete the transaction and increase drive-through satisfaction.

Ultimately, there will be shoppers who value the in-store experience and others who simply want the fastest route to purchase regardless of the experience.

Ben Ball
Guest
11 years 1 month ago

A possible solution to the issues raised with drive-through is to resurrect one of the popular concepts of the last decade — trip management. This Unilever-spawned idea points to a potential path for success in positioning a drive-through retail outlet against specific shopping trips.

Li McClelland
Guest
Li McClelland
11 years 1 month ago

I don’t get it. I would think grocers would be the last merchants in line to promote drive-throughs. Isn’t the point of displays, tastings, and the end cap strategy to get people to buy things they didn’t have on their list? Aren’t the near-register items (mags, gum, candy, snacks, etc.) there to get customers to add on to their order while standing in line? Aren’t seasonal items there expressly so people will buy “the cute”?

Bill Hanifin
Guest
11 years 1 month ago

Adding to the comments above, drive-thrus will be challenged (i.e. won’t work) when complex orders are involved and time in line extends to make it less convenient than going inside.

I could see a grocery going “Peapod” and using the drive-thru to deliver groceries that were previously ordered online. That would serve up efficiency and make the tactic viable for grocers.

Finally, I wonder if, in seeking innovation, we marketers don’t outsmart ourselves occasionally. Don’t we want consumers to come in store to browse, take note of special offers, and make an impulse buy on their way to check out? These opportunities are lost as we encourage more people to the drive-thru.

Nathaniel Fry
Guest
Nathaniel Fry
11 years 1 month ago

Drive-thru’s have proven to be a benefit to Walgreens customers resulting in them being a standard part of the Walgreens prototype. As Walgreens expands into prepared foods, the drive-thru will be a great enabler.

Walmart has included a drive-thru as part of their new store prototype (Bloomington, MN). They have signing indicating that it is for Pharmacy and Shop Online/Pick Up at Store.

There is a dramatic increase in the percentage of shoppers who shop online and pick up in store (Best Buy recently reported that 40% of its customers do so currently – an increase over last year).

With Walgreens and Walmart deploying drive-thrus and customer trends continuing in a direction where drive-thrus are increasingly relevant and convenient, one might expect that retail drive-thrus will continue to grow.

Anne Bieler
Guest
Anne Bieler
11 years 1 month ago

This seems to be more channel shifting. More retailers are going for on-site pick up – makes sense to expand the concept to drive-through and pick-up last minute items.

The idea is to keep loyal shoppers coming back to the store. Some days, there is too much going on but you need grocery staples, so saving an hour or so every week has real value for busy parents. Loyalty data can provide significant direction on how to stock and sell for best benefit. Make the store fun; shopper focused; a place to try new things and get good value – and shoppers will come and shop, pick-up and drive-through.

Craig Sundstrom
Guest
11 years 1 month ago

As some have noted, this concept has been around for a long time (longer in fact than many of them probably realize, as one can find pictures of a Model T or Maxwell or some such 1920’s car sitting in drive-thru grocery during that era) so why should we expect it to suddenly blossom? I don’t find the cliches that “the rules have changed” or “people are just SO rushed these days” very convincing. Get outta yer car folks. The (small) walk will do all of us good!!

Doug Fleener
Guest
11 years 1 month ago

It seems like a natural extension of the buy online and pick it up at the store. I could see a Best Buy or even a RadioShack offering this. (Oh wait, didn’t we decided earlier this week they’ll be one and the same?)

The add-ons would happen online when the purchase is being made. If this creates sales that would otherwise be lost to someone like Amazon, it might make sense.

Al McClain
Guest
Al McClain
11 years 1 month ago

I don’t think we’ll see drive-thru’s become a big part of mainstream retail anytime in the near future, for a host of reasons. But, one thing that has gone unmentioned is that this goes completely against the recent push to get people in the U.S. up off their couches and moving again. One reads every so often that people are supposed to take the furthest away parking spot and actually walk a ways to the store that they are visiting but I don’t think I’ve ever seen that happen.

Doron Levy
Guest
Doron Levy
11 years 1 month ago

While the drive-through may seem like a way to boost sales for a certain segment of customer, I still think the whole point of being a retailer is getting them into the store and shopping. Shoppers Drug Mart has been experimenting with drive-through prescription service and I have to ask, WHY? You just invalidated the value of all the fixtures, merchandise in the store and manpower to set it up and keep it going. For fast food, where you are talking about 10-20 items, drive-throughs make sense. For mass merchandise retail, I just don’t get it.

Mark Burr
Guest
11 years 1 month ago
What’s preventing drive-thru’s at retail today? The barriers are: efficiency, execution, selection, demographics, site limitations and more. The solutions aren’t so simple. In the end, as mentioned, they won’t be for everyone. Even if they are for some, they may not be an offering at every site. Will food retailers be able to deliver an experience in a drive-thru? Maybe, but not anything close to the possibilities of entering the store. Further, the fresh areas (Meat, Produce, Bakery, Deli, Seafood, etc.) still remain ‘selection’ offerings where the consumer is much more satisfied selecting their own product. Reaching the levels of satisfaction to achieve success in these areas will always be a challenge. Will the consumer driven by the perception of convenience of a drive-thru be marginally satisfied enough with the four apples (steak, pork chops, muffins, or you name the items) a runner picks? Or, will they always maintain some level of disappointment to the extent that the factor of convenience no longer leverages their disappointment? And is it all isn’t executed at the speed… Read more »
Michael L. Howatt
Guest
Michael L. Howatt
11 years 1 month ago

I think it’s time we all got into the 21st Century and look at WHO drive-thru’s will benefit in the future. People in their teens and twenty’s now do EVERYTHING on their phones. So it makes sense that when they are out they would e-mail or text their local store with the goods they want and then just pick them up later. I need a battery, a light bulb, some carrots – just punch it into the phone and go pick it up. Yes, some of the “touchy-feely” categories will still need to be shopped in person, but those will be few and far between 20 years from now.

Mark Johnson
Guest
Mark Johnson
11 years 1 month ago

I used to work at a chain of grocery stores that had call-ahead grocery shopping and drive up, pick up. It was revolutionary at the time, but it went by the wayside.

Tom Edwards
Guest
Tom Edwards
11 years 1 month ago

“Drive-through” would be best described as “pick-up.” The drive-through can handle simple orders on demand while pick-up has been more successful in the broader food menu. Outback and the ubiquitous Chinese take-out are examples. Phone, fax or Internet orders may generate volume for pick-up at grocery and some hard-line stores but the retailer will lose the impulse buying created by the visit.

Lisa Pearcey
Guest
Lisa Pearcey
11 years 1 month ago
Hi all. Interesting piece! Whilst you are specifically discussing America, as I always try to keep ahead of the game, I am interested to learn that Walmart is planning to trial this concept. I would agree that the whole point of shoppers coming into the store would be with clever marketing and POS to entice the customer to buy more. Much will depend on the anticipated level of service and range of products to the customer to be able to make it operationally and financially viable. I totally get the idea of pick-up pre on-line orders, however such a concept in the UK may not appeal to the customer, who is quite happy to either purchase on-line and have groceries delivered or prefers to head into the store themselves to be selective and ‘eye’ before they ‘buy’! Drive-thrus are prominent in the UK from a Fast Food perspective and in fact Starbucks is now rolling out drive-thru developments in the UK with a licensee who is a national PFS operator (Eurogarages). As with any market,… Read more »
Dave Wendland
Guest
11 years 1 month ago

I agree with several comments already voiced that retail operators probably have bigger fish to fry. The concept of using the “drive-up” as a pick-up only option and creating a more robust click-and-mortar experience may be a good option. To make this successful, however, the online experience MUST generate impulse sales and companion item recommendations. If it doesn’t do that then market basket size will decrease, not increase, and sales will suffer.

Richard McClure
Guest
Richard McClure
11 years 1 month ago

I think the drive-through will re-invent the c-store category.

Consider the young mom driving with children in car seats. She hasn’t frequented c-stores because of the hassle of getting the kids in and out of car seats to enter the store. But she will frequent c-stores now because of the drive-through feature. Chute Gerdeman recently completed the redesign of the Swiss Farms chain. It’s really enhanced the CONVENIENCE aspect of this retail category.

Aakash Pahwa
Guest
Aakash Pahwa
11 years 1 month ago
Interesting conversation — talking about convenience for the customer and efficiency for retailer. Order online, fulfill from store and have customers drive through. Imagine a drive-through dry cleaner. I recently saw one in action in a small town. The car (customer) drives up to a large window – rather a sliding glass door. The runner walks up to the car with a small pad and a pen in hand, asks the customer’s name and number of clothes, writes up a slip, hands it over to the customer and brings the clothes back in the shop. Now that’s customer service! Fast forward to an urban population zone with techno savvy customers and retailers. How different is grocery delivery going to be? Encourage customers to open the trunk of their vehicle as they drive up to the pick-up point. The runner can load the grocery bags right up in the vehicle. Throw in a handheld (for store associate to confirm delivery), a basic web app (for customer’s smartphone to check status of when clothes are ready for… Read more »
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