Is curbside pickup-only grocery a viable business model?
The startup Fresh Street has opened Chicago’s first curbside pickup-only grocery store with a promise to save time and money for shoppers.
“My family and I have experienced the frustrations and inconveniences that plague current online grocery options,” said Mike Sayles, CEO of Fresh Street, in a statement.
The first location, measuring 10,000-square-foot on the border of North Park, West Ridge and Lincolnwood, carries over 4,000 SKUs, including national and local brands. Orders are available for pickup within 30 minutes.
Focusing solely on pickup removes the scheduling challenges that come with delivery and avoid online grocery’s often higher prices. For grocers using Instacart or Shipt, the cost may include higher markups, plus delivery and service fees.
Curbside-only also offers at least some of the convenience of online shopping.
“Our core demographic is families who are really busy,” Mr. Sayles told Block Club Chicago. “You get to a point where grocery shopping is less an experience and more of a chore.”
The platform has a “no substitution” rule to drive efficiencies, although management says it’s “very rare” that an ordered item is out of stock due to the model’s real-time visibility. The location has six designated parking spots — about double that of the typical brick-and-mortar grocery store in the area — with an initial capacity to serve about 2,000 weekly customers.
“We’re focused on faster turnaround times, better availability, getting people in and out of their parking spot quicker — we should be able to do that in under a minute,” Mr. Sayles told the Chicago Tribune.
Many households discovered pickup over the pandemic with eMarketer estimating 35 percent of U.S. digital grocery sales last year were click and collect. A Mercatus survey from last year found 31 percent of U.S. grocery shoppers favoring curbside pickup, ahead of delivery, at 24 percent, but behind in-store, 44 percent.
EMarketer’s recently-released “US Click-and-Collect Forecast 2022” report, however, determined overall curbside pickup growth was “well below” expectations. Emarketer wrote, “The era in which click-and-collect options were dramatically shifting the dynamics of both ecommerce and in-store shopping appears to have ended.”
- Fresh Street launches online grocery platform focused on affordable convenience – Fresh Street
- Fresh Street, A Curbside Pickup-Only Grocery Store, Opens Next Week In North Park – Block Club Chicago
- Chicago online grocery startup launching curbside-only service out of former Lincoln Village clothing store – Chicago Tribune
- US Digital Grocery Forecast 2021 – eMarketer
- Mercatus Survey Reveals 75% of Online Grocery Orders To Be Fulfilled at Grocery Stores – Mercatus
- US Click-and-Collect Forecast 2022 – eMarketer
- US click-and-collect sales growth slowed in 2021; will rebound in 2022 – eMarketer
- 5 ways retailers are innovating curbside pickup – National Retail Federation
- How “Buy Online, Pick Up In-Store” Gives Retailers an Edge – Harvard Business Review
DISCUSSION QUESTIONS: Will a curbside pickup-only grocery store be appealing to large numbers of consumers? What will likely be key to Fresh Street’s success from an execution standpoint?