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Is curbside pickup a better solution for online grocery?

Written by RetailWire Staff

Harris Teeter hopes its new $99/year subscription service will drive more customers to use its Express Lanes online shopping service. Just four hours' notice produces handpicked grocery orders ready for curbside collection.

The mid-Atlantic grocer will continue to offer a $4.95 per order option as well as a $16.95 monthly option. The service, first offered in 2000, is now available in 150 of its more than 200 locations.

Food retailers continue to expand and experiment with curbside pickup:

  • Shop & Stop and Giant Food, through their partner, Peapod, began rolling out curbside delivery last year and offer the service for no charge with varying minimum orders (although some orders are picked at a depot rather than the store where they're collected);
  • Hannaford continues to expand its Hannaford To Go curbside service, which charges $5.00 per order (free for orders over $125);
  • Wegmans in February began testing curbside service at its store in Pittsford, NY, charging $10 per order;
  • In its continuing test of Walmart to Go, Walmart in the Denver area this January began offering a complimentary local curbside pickup option for general merchandise and some groceries.

One encouraging sign for curbside delivery, according to TechCrunch, is Walmart's finding that 55 percent of shoppers prefer an in-store pickup option over home delivery because they are able to grab a few things they missed with their online order.

Still, the majority of supermarket chains, including Harris Teeter's new parent, Kroger, don't appear to offer any curbside delivery. HomeShop, from Kroger's King Soopers, has done home deliveries for $10 in Denver for many years but the chain doesn't think the economics justify expansion. Publix abandoned a test of a curbside service in early 2012.

So is it better to stay at home waiting or to collect orders while out? What is each choice worth?

Harris Teeter's $99 curbside is cheaper than AmazonFresh ($299/year) for same or next day home delivery. But Instacart's $99/year provides two hour, scheduled deliveries free for a $35 minimum spend. The service makes use of Personal Shoppers who visit a range of local stores (including Whole Foods, Trader Joe's, Costco and Safeway). Walmart charges only $5 to $7 for home delivery with Walmart to Go.

Etailing Solutions' December 2013 study of reasons why shoppers do or don't buy their groceries online was covered by Internet Retailer. Of 151 participants who could access Peapod, FreshDirect or ShopRite, 53 percent said they would shop more often if delivery cost less. At the time of the study, FreshDirect's fee was $5.99 with a $30 order minimum; Shoprite.com's fee was $19.95 for home delivery, or $5.95 for store pickup.

Geographic areas covered by these companies sometimes overlap, providing more choice, but often don't. Meanwhile, the consumer's dilemma remains unchanged: how to achieve convenience cost effectively.

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