Do Customers Really Miss Going To The Store After All?
The New York Times has a new theory about the rapid rise of curbside pickup: Consumers really, really miss going to the store — and picking up curbside gives them a reason to get out there, even if they never make it through the front door.
Americans like getting in their cars and driving to the stores, Cowen retail analyst Oliver Chen told the Times.
“[Curbside pickup] is kind of a hybrid where you’re getting the best of both worlds,” Chen noted.
And a hybrid model that is delivering in terms of filling in the revenue gap the slowdown of physical retail has created. Target reported curbside sales were up 700 percent in Q2, and Best Buy reported a record-breaking $5 billion in online sales revenue, 40 percent of which it reported came care of curbside or in-store pickup. And Walmart currently employs 74,000 workers spread across 30,000 locations tasked specifically with picking groceries and carrying them out to customers cars — up from about 1,000 when the program first launched at a handful of stores five years ago.
And the rise of curbside, the Times report notes, coincided with the rare logistics stumble out of Amazon’s legendarily efficient supply chain — as the great consumer rush to hoarding items like toilet paper, Lysol, hand sanitizer and disinfectant wipes led to delivery delays, accusations of price gouging and counterfeiting, and inventory shortages. This, according to the Times, dented consumer confidence in delivery, creating an opening for big box retailers specifically to repurpose their physical locations for goods pickup by consumers.
Consumers, the news outlet posits, have their doubts about delivery and are looking for a reason to back to the stores, even if they only make it to the curb. Why while we can’t argue that curbside pickup of digital orders hasn’t taken off massively in the last half year, or that consumers clearly like it in a lot of contexts, the data doesn’t seem to support the time conjecture about how consumers feel about getting back to stores, or dimming consumer sentiment on having items delivered directly to their front door.
Quite the opposite, the data indicates that as much as curbside has improved, consumers still like delivery better.
The Demand For Delivery
While it is undeniable that Amazon hit quite a few stumbles in the early days of COVID-19 in terms of inventory, shipping times and responding to an unpredictable situation, as its record-breaking earnings results during Q1 and Q2 handily demonstrated, those struggles were fairly short-lived. Amazon threw its entire Q2 profit at battling COVID-19 which fairly quickly brought many of their early pandemic logistical issues to a heel and sent its sales figures soaring. As of last quarter, Amazon was reporting its revenue and profit had doubled, net sales increased 40 percent to $88.9 billion compared with $63.4 billion in second-quarter 2019 and online grocery sales tripled.
It’s tough to argue that Amazon’s early struggle dimmed consumer enthusiasm for deliveries in general when it doesn’t seem those struggles seriously dented consumer enthusiasm for Amazon itself in specific.
Moreover, when we look at PYMNTS’ most recent data on what consumers rank as their most important preferences for merchant offers, curbside pickup doesn’t top the list. It does rate highly — in terms of capabilities that most consumers rank as important it is the No. 2 spot with 58 percent of consumers calling it out as something they look for. But as important as it is to a majority of consumers, curbside delivery is outdrawn by delivery capability by a fairly sizable margin — 66 percent of consumers rank delivery capability as what they consider critical.
Moreover, when consumers are asked to rank in order what they think is most important, curbside pickup slips to No. 3 in terms of what consumers value. The top spot shifts to online inventory availability, which 22.3 percent of consumers ranks as the most important thing merchants can provide, followed in the second spot by online ordering for delivery, which 19.1 percent of consumers reported as their No. one priority. Online ordering for curbside pickup, on the other hand, got the top vote from 14.8 percent of consumers.
It also does not seem to be the case that delivery capability is winning out merely because it is the service more consumers are used to, or because they are less aware of the curbside pickup capabilities that so many merchants have been compelled to add on to their retail offering in the last half year. According to the PYMNTS survey, 79 percent of consumers report that their merchants have added or improved their digital-first capabilities, with curbside pickup called out in specific by 55 percent of respondents. The majority, at least, are aware that it is an option and are aware that it is being done better than it once was. Nonetheless, they still prefer delivery.
Because, the data also demonstrates, the average consumer misses their old life of physical transactions a bit less than The Times seems to be assuming they do. The number of consumers who report missing the physical store shopping experience has dropped by 20 percent since April, according to PYMNTS’ latest figures.
For from being disillusioned with delivery, it seems consumers are in fact getting more and more attached to it. And while consumers are undeniably keen on curbside pickup, it seems a bit of a stretch to write that off to nostalgia for physical commerce — when the numbers indicate that the longer consumers are away from it, the less they are missing it.