Curbside pickup is now a must-have for customers (and retailers)

Click-and-collect sales in the US skyrocketed to $72.5 billion in 2020—more than double that of 2019—and aren’t predicted to stop growing any time soon.
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Francis Scialabba

· 6 min read

Curbside pickup dates back (at least) to 1920s department stores and personal shoppers, but, like many present-day conveniences, the service didn’t become modernized until the 2000s with the rise of the internet. In 2019, retailers like Walmart and Target had been experimenting with designated curbside pickup parking spaces. But the need for contact-free speed really picked up in 2020 because of Covid.

For retailers, it was “a way to unlock inventory that was trapped in the revenue...and make a health and safety play,” Salesforce’s Michelle Grant, senior manager of strategy and insights, explained.

Consumers, meanwhile, had no other choice.

Supermarket chains were among the first to employ pandemic-era curbside pickup options as customers sought groceries and household essentials without the risk of shopping in-store. The term “contactless” gained popularity in step.

“That’s what started the renaissance of curbside pickup,” Jonathan Zhang, a marketing professor at Colorado State University, told Retail Brew. “Things seem to be under control with the pandemic…[but] it’s here to stay. Behaviors have evolved.”

Sixty-two percent of online shoppers in the US now expect retailers to offer the service, according to a May survey by shipping software provider ShipStation. Click-and-collect sales skyrocketed to $72.5 billion in 2020—more than double that of 2019—and aren’t predicted to stop growing any time soon, per eMarketer.

“When people make a purchase decision, a lot of things go into that decision—price, quality, availability, but also fulfillment and returns. So the ability to offer curbside pickup is key to a customer experience for the modern-day shopper,” Grant added. “Consumers have become addicted to convenience in all aspects of their life. And this is the most convenient way of fulfillment for those who have a car, which is a lot of Americans.”

Retailers are more than willing to meet shoppers where they want to be. As of August 2020, nearly 44% of the top 245 retailers offer curbside pickup, up from 6.9% at the end of 2019.

  • According to Salesforce’s new Connected Shoppers report, 39% of US retail executives say they introduced curbside pickup during the pandemic. Of that group, 74% said they will keep it post–Covid.

The reason isn’t solely because consumers see curbside as a cheap and fast fulfillment option.

“From the retailer’s perspective, the benefit is even bigger,” Zhang explained. It’s cost-effective, compared to paying for a delivery service, and enables easy returns. It also allows the company to serve more customers and “increases the efficiency of the store...without expanding the physical real estate.”

The convenience factor

Retailers like Ulta Beauty took the pandemic as an opportunity to roll out and scale up curbside operations. Training and scheduling were instrumental to introducing the curb component to the company’s existing BOPIS system, Kecia Steelman, Ulta’s COO, told us back in April when she headed up store ops. Everyone working on the floor is trained to take care of in-store shoppers, but also pull and pick BOPIS orders and help with curbside processes.

“Pickup also provides a good opportunity for a store to have a human being engage with the customer,” Zhang noted. “Personal engagement, however brief, is able to fuel more loyalty than traditional e-commerce with a cardboard box.”

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Phone it in: Dinky parking-lot pickup signs and toll-line numbers also don’t cut it. The curbside customer experience has gone digital, with confirmation emails and text notifications like “Your order is being processed” and “Ready for pick-up.”

That was top of mind for Michaels, which introduced curbside chainwide in a matter of days at the start of Covid. The retailer told us earlier this year that it employed new in-store tech and revamped the front-end experience on the company’s website and app to keep up with expectations.

  • One example: Customers can notify the store when they’ve arrived to pick up their order. “A team member is then notified via an audible chime,” said Richard Armour, SVP of e-commerce.

+1: Grant believes letting shoppers quickly see which products are available in-store is another crucial convenience. “Inventory management [is] one of the key things driving down the time between ordering and the availability for pickup,” she said.

  • Some big-box giants, like Best Buy and Dick's, are offering one-hour curbside for most items.

Thinking beyond the curb

If Covid kicked curbside into high gear, this post-pandemic(ish) holiday season is raising the stakes even higher for retailers.

  • Adobe’s holiday forecast predicts that curbside pickup will make up 40% of all online orders, peaking in the days leading up to Christmas.

Amazon recently said it will let third-party sellers offer curbside pickup via the merchant’s brick-and-mortar stores. Kohl’s is increasing the number of curbside pickup spots and adding “pop-up” pickup locations for the holiday season. Target has been quietly enhancing its curbside offerings as well.

  • The big-box retailer is allocating 18,000+ parking spaces for pickup and other curbside conveniences, including the ability to add more items to drive-up or order pickups after checkout.

Not so fast: Curbside may be less costly and labor intensive than home delivery, but retailers are making other sacrifices. Customers don’t get the same “treasure hunt” experience picking up a product versus buying it in a store, explained Tyler Higgins, retail practice lead and managing director at AArete. Companies also lose the opportunity to stage merchandise. This will be the challenge moving forward.

“At the beginning of the pandemic [curbside] was heavily predicated on safety. Now, retailers are trying to explore how curbside delivery can be a component of an overall customer experience strategy,” Higgins told us. Because one thing is for sure: It isn’t going anywhere.

Salesforce has found that the younger shoppers are, the more likely they are to use curbside as their preferred fulfillment method, with up to 14% of Gen Z claiming it as their favorite option. “This has become an embedded habit with that generation, and it will only become more popular as they grow older and expand their households and have greater car adoption,” Grant said.

Retailers are now tasked with establishing what sets them apart. Higgins predicts retailers will embrace curbside benefits programs, surveys, and other incentives.

“It’s a service that’s very much still immature as an industry-wide offering...It’ll be interesting to see, over the next year, how certain retailers try to position curbside to be a valuable offering while not diminishing the revenue potential that happens naturally with foot traffic in stores.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.