Are grocers downplaying curbside pickup at their own expense?
A university study finds grocers overly relying on in-store pickup “for the sake of quick, low-cost roll-out” during the pandemic. As a result, many are not maximizing the sales opportunity from providing enhanced curbside and freestanding locker options.
The research from the University of North Carolina-Chapel Hill and Tilburg University found fulfillment convenience offers three different benefits for shoppers:
- Access convenience: the reduction of time to travel to and from a click-and-collect location and the time spent there;
- Collection convenience: the reduction of physical effort to collect the order;
- Adjustment convenience: the ease with which shoppers can adjust their online orders by adding, returning or replacing items.
The three click-and-collect options — in-store, curbside and standalone pickup solutions, such as lockers — “address fundamentally different shopper needs in terms of fulfillment convenience.”
For access-convenience-oriented benefits, both in-store and standalone are best suited for time saving. Researchers wrote in a release, “The time-efficient pickup of stand-alones stimulates these shoppers to spend more at the retailer online. In-store pickup, in turn, leads to positive spillovers to the retailer’s brick-and-mortar stores and, hence, an increase in total spending.”
Collection-convenience-oriented benefits appeal to large-basket shoppers buying more bulky items. Standalone pickup was found to work best for this purchasing segment as a time and effort saver, resulting in the higher total spend at the grocer.
Adjustment-convenience-oriented benefits appeal to larger households who shop more for perishables and buy more on impulse. Standalone and curbside yielded the highest total retailer sales in these markets. Researchers wrote, “While in-store leads shoppers in these markets to spend more online, it also cannibalizes their brick-and-mortar purchases. Even worse, it may even decrease total spending at the retailer and should therefore be avoided.”
The study concluded that click-and-collect needs to be better assessed on a market-by-market basis. Els Gijsbrechts, a co-author, wrote in a statement, “The pursuit of speed without knowing which type is best in terms of demand may lead to the demise of the format.”
- Why big-box chains’ embrace of in-store click-and-collect leaves money on the table – Science Daily
- Why big-box chains’ embrace of in-store click-and collect leaves money on the table – Eurekalert
- Navigating the Last Mile: The Demand Effects of Click-and-Collect Order Fulfillment – Journal of Marketing
DISCUSSION QUESTIONS: Are grocers short changing opportunities around curbside pickup and standalone lockers? Do you think decisions are being made primarily based on overhead costs or are other factors given equal weight?