For many companies, it served as a makeshift solution to what seemed like a temporary problem during the early months of the pandemic. Almost a year in, and that has all changed. Curbside delivery, along with other omnichannel strategies, will certainly have a lasting impact on the shopping journey for the foreseeable future.
The growing popularity of these offerings shows that the future of retail is more than just package delivery; it’s accessibility and convenience. Beyond fulfilling the need for contactless and customized shopping in the pandemic, curbside delivery has met the consumer’s desires at the intersection of innovation and technology.
Companies continue to invest in large-scale data aggregation as the definition of e-commerce changes. Curbside pickup is actually an extension of e-commerce — customers make selections online and pick them up, literally and figuratively, at the side of the curb. Many think of the UPS or FedEx delivery experience as e-commerce, but grocery companies like Kroger are becoming increasingly important e-commerce players as the innovation becomes mainstream.
Data is being collected and used to analyze metrics such as consumer impulse buys and long lines in the grocery store. Companies such as Dollar General are investing heavily in data analytics, with big retail brands like Target perfecting their data to a large degree. The most valuable data lies in the I.T. infrastructure itself, enabling retailers to track real-time and historical customer trends, in-store and online engagements, and the impact of marketing and sales promotions.
According to Nuna, a phone and virtual answering service company that uses artificial intelligence in its operations, there has been a 450% surge in conversational commerce (including calls, texts and Facebook messages) by consumers since the pandemic hit this past spring. This includes a 393% increase in contactless, text-to-order revenue, and 748% increase in curbside order check-ins. Eleven percent of all messages were related to curbside pickup.
Retailers know that every interaction with customers is meaningful and impactful, so these experiences must be optimized and delivered safely to ensure that consumers will return. By using large-scale data, retailers can continue to monitor the trends that define their customer interactions, including behaviors, preferences, and brand engagement, both during and after COVID-19.
Supply-Chain Complications Will Continue
With e-commerce having three times the return rate of normal retail, the reliance on online shopping will continue to create headaches for retailers and consumers alike. Instead of customers having to package and return the goods themselves, risking long waits for the retailer to process their returns, they could drop them off at a store-facing footprint. Retailers that have established curbside pickup have given themselves a continuity of sales solutions that didn’t exist before COVID-19, and will help protect them against shutdowns.
Ultimately, the continued development of fulfillment and micro-fulfillment centers in suburban areas will allow for major cost savings, because companies will be able to quickly assess the quality of returns, and aggregate them back to their distribution centers in shippable quantities. As a rule of thumb, the bigger the shipment, the less expensive it is. If goods are shipped in high volumes, then large-scale delivery services like Amazon could employ less-expensive ground services to more consumers in other markets.
Due to the pandemic, retail and procurement specialists are seeing gradual improvements in omnichannel offerings across major U.S. retailers, but it’s been a tricky process to get to this point. At the beginning of COVID-19, companies like Walmart would typically allow only grocery items to be picked up curbside, but as buying patterns were altered through the pandemic, they now frequently feature their entire store assortments. Curbside delivery, mobile applications, self-service shopping, autonomous checkout, A.I. and robotics technology were already growing in popularity before COVID-19, but all of those trends were accelerated in 2020.
Within the last year, we’ve seen retailers such as Lowe’s and Home Depot begin featuring virtual showrooms, to ease the buying decisions on big-ticket wholesale items like stoves, cabinets, and freezers. The experience has made the buying experience much less stressful due to purchase transparency, and has kept those categories viable in periods of isolation.
Typically, retailers have handled security and safety within their own walls, but what about at curbside? Security and consumer safety with curbside delivery is a new variable that must be considered and improved. Industry leaders need to account for covered parking to help protect consumers and employees against inclement weather. For high-value products like computers, jewelry and shoes, prioritizing the safety of employees and minimizing risk of crime should also be incorporated into the curbside-delivery strategy.
Curbside’s Future Looks Bright
The future of curbside pickup shopping is bright, and is already fulfilling consumer expectations. In the months and years ahead, it will become as common as using a cell phone.
The integration of curbside shopping during the pandemic answered a pressing need from consumers. Adobe Analytics recently found that buy-online, pickup-in-store orders surged 208% in April of 2020 from April 2019. A CommerceHub report found that 59% of consumers are more likely to use curbside pickup following the coronavirus outbreak. Even when the pandemic subsides, 75% of consumers who subscribe to multiple delivery services say they will likely continue opting for curbside delivery.
For many consumers, curbside pickup capability will be deemed as essential as having a safety stock of toilet paper and cleaning supplies. Not having competitive functionality in that area could cut a retailer’s pre-pandemic customer base by 10% to 20% over the long term. That’s an educated estimate, but with e-commerce growth projections reaching 30% to 50%, it seems like a reasonable projection.
To maintain market position and accelerate results, companies should be deploying procurement specialists with real-world experience in the retail sector. They can explain how other organizations have faced similar challenges, and help create procurement systems that meet the needs of the future. At a time when the supply-chain and logistics infrastructure is evolving at a rapid pace, it becomes essential for retailers to strategically manage areas that are critical to their performance. Enhancing procurement could be the most efficient way to keep customers returning.
Johnathan Foster is principal consultant of Proxima.