Photo: Best Buy
Retailers are going to curbside and delivery. Will they stay that way?
What a few weeks ago were perks that were growing in popularity have quickly become the only way many brick-and-mortar retailers and restaurants can do business. Curbside pickup and delivery are allowing some to stay in business without putting customers and employees at risk for COVID-19 or violating increasingly common state-level lockdown orders. This is proving true for retailers beyond grocers and restaurants, as well.
On Sunday, Best Buy announced that its stores would now operate for curbside pickup only, according to CNBC. Customers are also able to order products online and have them delivered directly to their homes. Best Buy has experienced a spike in demand for tech products used to conduct business from home, due to a large segment of the job force now doing so indefinitely. The chain has also suspended in-home consultations and repair services.
Dick’s Sporting Goods, discount shoe chain DSW and video game retailer GameStop have all likewise shifted to operating in a pickup and delivery-only capacity, according to an article on Android Central. This is in addition to a variety of mass retailers and grocers, which have been increasing their pickup and delivery fulfillment capabilities in recent years.
For some retailers, the move represents a quick and dramatic strategic pivot against the rapidly evolving coronavirus situation.
GameStop, for instance, closed all of its stores and moved to pick-up and delivery-only after drawing the ire of the public last week for attempting to position itself as “essential retail” exempt from government shutdown orders.
The shift from major retail chains follows in the steps grocers have taken. Although allowed to stay open, as they are considered “essential retail,” many have expanded curbside pickup and delivery to promote the social distancing viewed as critical for reeling in the pandemic.
- Best Buy shifts stores to curbside pickup only as demand surges for home office equipment – CNBC
- These retailers are offering curbside pickup in the U.S. – Android Central
- Online shopping and deliveries to continue despite lockdown of “non-essential” UK shops – The Sun
- GameStop closes all stores – CNN
- Will GameStop lose more than it wins keeping stores open during the coronavirus outbreak? – RetailWire
- How can indie restaurants survive the coronavirus? – RetailWire
- Should retail close? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Will retailers and restaurants that have moved to curbside pickup and delivery-only be able to effectively weather the coronavirus pandemic? Do you think those that are newly piloting these offerings will maintain them after the coronavirus pandemic is over?
Poll
BrainTrust
Richard J. George, Ph.D.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Brent Biddulph
Industry Marketing Lead, Retail & CPG
Right now curbside pickup and delivery are the only option for many retailers and restaurants. And it is the only option for small brick-and-mortar retailers who are scrambling to create an internet presence that allows them to sell online. This is the new norm, at least for now, but I am not reassured that it will sustain many businesses long term.
Best Buy and other chains are doing the best they can to minimize the impact of closed stores and curbside pickup and home delivery are their best bets. It won’t offset the huge losses to revenue, but it helps. If social distancing and stay-at-home mandates become more strict, stores may not be able to have employees to provide these services.
Post COVID-19, many consumers that have used curbside at general retail, grocery and restaurants, may find that they like it and it could become a new habit. From an online grocery perspective, this will be the catalyst that dramatically increases the adoption rate.
I believe this is part of the new normal. Many businesses are adapting. Some are having easy time with curbside and delivery, some not — but it is still a learning experience for them and at the end of the day, they have to provide customer service even though these offerings may be outside their wheelhouse…
I think curbside pickup and delivery for some segments will never return to their pre-pandemic levels as consumers realize how convenient this service really is. Grocery shopping has always lagged other segments in its e-commerce penetration and that has changed. The real risk here is independent restaurants. Most don’t have deep pockets and they need to pivot quickly to stay in business. Many states and communities that depend on the tourist trade have been decimated by the surge of people heading back to their home cities, states and countries. The longer this nightmare lasts the fewer independents we will have when the dust settles.
Sales are sales and anything a retailer can do to remain relevant with the consumer during these difficult times helps. The increased use of curbside and delivery service could cause a big consumer shopping shift for grocery retailers and restaurants into the future. Many consumers are trying these options for the first time and if they get great service and quality products in their packages, they may stick with these shopping options in the future. For the other “non-essential” retailers, curbside pickup may not last long as more states shut down. It will be tough for Best Buy and Dick’s to claim any sort of “essential status” and this means their employees can’t get to work to provide curbside options.
Consumer necessity followed by some demand for distraction items is the real driver of consumer purchases now. Curbside delivery is but one aspect to make that happen, but with sales down across the board, curbside pickup isn’t going to attract worried shoppers that have reevaluated what matters to them. Grocery and staple items will get the most benefit from this practice. Beyond that, outside factors (there are many) will drive consumer behavior, not store operations or marketing.
In some cases, curbside pickup was forced on retailers by the circumstances. Now that they are practicing it under duress, they will find that they can streamline the process and keep the practice to their advantage and to the delight of their customers. For those drivers that have difficulty backing out of parking spaces, there will be free, remedial driving lessons.
There is anecdotal evidence from China that consumer habits are likely to change in the long term as a result of the current situation. Executives are concerned about needing to change their go-to-market strategy.
As consumers, once we have tried something and like it we tend to want to keep it and these types of fulfillment will suit some so while there may not be the need for such scale there will be a desire to retain them.
Curbside and delivery were gaining momentum even before the pandemic. Now, many more consumers are utilizing it and becoming accustomed to the service so they are likely to continue to use it going forward. Adopting it as an ongoing strategy will offer retailers an advantage, assuming they can offer a frictionless experience to their customers.
BOPIS along with curbside delivery was emerging as a convenient fulfillment option for retailers and service providers. In our current situation, this is the best and safest option for retailers, restaurants and service providers to keep their businesses open while keeping their employees and customers safe. While this is our new normal, we should expect BOPIS curbside pickup and other customer-driven fulfillment options to remain a revenue-driving service when we get to the other side of this pandemic.
Short-term changes in behavior lead to long-term changes in behavior. We are adopting many lifestyle changes with the intrusion of COVID-19. Some will stick. I believe this is one of them.
Whatever transitional changes were going to take place in retail over the next decade will be greatly accelerated.
What’s the alternative, not being open at all? Curbside pickup could become the new normal when this pandemic is behind us. My colleague, Dr. John Stanton, reminds me to “look at the 2008 recession: Strapped for cash, many Americans started buying private label goods — and didn’t stop, even after their financial situations got better. By and large, customers tend to get stuck in particular buying habits and often won’t change unless something big happens to push them out of their inertia.”
The consumer behavior change became permanent with private label. However, while organic sales dropped in 2008 precipitously, they quickly rebounded when times got better. I believe curbside pickup will perform more like private label did in 2008 versus the temporary dip experienced by organics during the same time period.
I just posted a new article on Forbes on precisely this topic: “Curbside Enthusiasm: Retailers Adapt In A Time Of Crisis.”
Retailers and restaurants are likely to keep some of these drive-up practices when the pandemic is gone. However, people like going to restaurants to enjoy the ambience, the personal contact and the fresh and hot food. For retailers, shoppers often want personal advice and help on products for sale and will want to come in the store. But also, BOPIS orders will accelerate and will be table stakes for retailers in the future.
On the downside, if restaurants and retailers were to keep all of the current practices, they would not need to hire back many of their employees. I don’t see that happening even though some of the current practices will be kept for a segment of their customers.
For FMCG retailers that had already implemented curbside pickup as a part of their business model, they are undoubtedly ahead of the curve here and will likely see a boost to this option going forward. For GMA and QSR retailers, it has been amazing to see how fast they have been able to adapt to a 100 percent curbside model.
Either way, it may be more broadly viewed as a competitive strength for those traditional retailers able to execute and sustain, while Amazon’s fulfillment capabilities have essentially collapsed during COVID-19.
There is a big difference between surviving and thriving. The business model for (only or dramatically more) curbside pickup and delivery will need to be addressed to ensure it is viable for retailers long-term.
While people have short memories, and “the younger generation” may feel invulnerable there will be enough shoppers who will just feel a lot more comfortable with this service — so yes this becomes yet another staple in the omni-shopping experience.
BOPIS is the new normal, no doubt. That and delivery — I mean, YOU deliver.
Killing with convenience was a mandate before the coronavirus took hold and these days, choice and convenience are inextricably linked. Retailers that have recently ramped up curbside pickup should have done so pre-coronavirus. Once the pandemic (hopefully) blows over, they should absolutely keep it rolling in order to remain competitive.
Adversity sparks innovation. For those stores that did not jump headfirst into curbside delivery, this service is proving to be a profitable endeavor. This will become the new normal.
Customer disruptions will begin to return to normalcy after the crisis passes. Adoption rates will fall back to pre-crisis rates, but some of those who’ve tried out the services will stay, especially if the service was a strong experience. Though I would suspect that most retailers have or are scrambling to build the right services at cost to ensure they can continue operating and capture some business during the crisis. This also means that the service experiences will change post-crisis for the better. Retailers who try out BOPIS/curbside will have an advantage with learnings for future growth.
Business will be changed forever. We’ve been pushing BOPIS, which is exactly what is happening now. Customers will go back to business as usual, but BOPIS for retail and restaurants will be part of that “usual.” The concept of delivery went from a convenient option to a necessary way to do business. While we will get back to normalcy, pickup and delivery will become more the norm than ever.
Let’s be real here: retailers aren’t “effectively weathering” the pandemic with curbside pickup, they’re doing any and everything they can, but it’s a small fraction of normal business. And that fact I think will forestall any wide scale movement toward this method of delivery when this episode is over — it’s just not efficient.
Actually I’ll put out a contra-theory: we’ll be so starved for human interaction after this is over we’ll see a surge — albeit temporary — in face-to-face interaction.
Today retailers have rushed to implement curbside pickup as a necessity to continue doing business. Tomorrow, they will evaluate the business model to see how/if they want to continue it. However, consumers tend to self-train when it comes to convenience factors and no doubt many will find this service extremely convenient and insist on it. I suspect most consumers will ask themselves why they should use any other form of BOPIS if they can complete the pickup without even entering the store at all! Maybe BOPIS will become BOPAC — Buy Online Pickup At Curbside.
Right now it is the only option and some restaurants and retailers are using it to generate cash flow to pay rent and keep some employees (the alternative is total furlough and board up the store). Once the business reopens, I am not sure they can be maintained profitably. Remember, at the end of the day, the business need to provide service to consumers profitably. Even if the customer adjusts to the convenience, the business can’t give away margins.
There are too many variables to really answer this question. It depends on the financial situation that the retailers and restaurants were in before the pandemic started and the ultimate length of the pandemic.
Retailers and restaurants that will succeed will have to master these new delivery options and be nimble and creative in developing new product and meal offerings than they had before the crisis. Example: While the grocery stores are out of pasta and pasta sauce, it creates and opportunity for restaurants to offer up meal kits or to sell family size pasta sauce containers.
This crisis will create a crazy amount of new ideas and many of the best ones that made money and served the customers will stay long after the crisis has subsided.
I have to add this comment a day late. Curbside has definitely found a home in retail, but I think not all retail. Those who are in positions to have space right out of their front door are good to go. Those retailers who have parking spaces are challenged by parking space seekers. But the HUGE challenge is for retailers not in the commodity business selling items customers want to see and feel. This will require a huge and consistent presence on their websites.
Yes, most retailers can use curbside and delivery to leverage their position instead of using a mail system, while they change their model to adapt to these new circumstances with this timing. This is a perfect opportunity for this shift, and the ones who use it will become stronger and more resilient.