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5 Benefits of Curbside Pickup for Online Grocery

The primary benefits of curbside pickup include increased profit margins and customer loyalty. Read on to learn more about how a seamless curbside pickup program can be game-changing for your online grocery business.

Online grocery sales reached $7.1B for May 2022, according to the Brick Meets Click/Mercatus Grocery Shopping Survey conducted May 28-29, 2022. Nearly half of all sales are fulfilled through pickup, almost as much as delivery and ship-to-home combined. Clearly, one of the many benefits of curbside pickup for regional grocers is the ability to tap into overwhelming consumer demand. 

For consumers, curbside pickup is the best of both worlds. It allows them to place their orders online and save time they would normally spend shopping in stores while saving on hefty delivery and convenience charges. Curbside pickup also enables them to collect their orders at their own convenience by choosing a slot that works best for them. 

With COVID restrictions easing up and health concerns no longer guiding purchase decisions, online grocery shoppers were able to leverage (and later embrace) the comfort and flexibility that comes with curbside pickup. 

In another post, we looked at the secrets of online grocery pickup program success. There we explained the hows. Here, we look at the whys — some of the many different ways that a well-executed grocery pickup program can enhance the success of your retail grocery business. These include increased customer retention, increased online profitability, control over data, digital ad revenue, and program scalability.

To fully realize all of these benefits, one quality is essential: ownership. While a third-party delivery provider can be an economical way for you to offer home delivery, when it comes to curbside pickup, you really need to own your program to achieve the best possible outcomes. 

As you begin planning for 2023, it may be time to revisit your click-and-collect curbside pickup program to ensure you’re reaping all of these benefits.

Find out the steps you can take to help your grocery pickup program succeed.

1. Attract and retain online grocery customers

Customer preference continues to lean towards curbside pickup rather than delivery, and for good reason. For shoppers, it’s more convenient, and less expensive (increasingly important as inflation persists), and it satisfies preferences for low-contact shopping services.

One of the key upsides of curbside pickup, for you, is the ability to attract and retain customers by meeting these needs. But shoppers are also trying out many different shopping options, which means they often bring high expectations set by one brand to their experience at another. 

When you control your curbside pickup program, you have insight into every stage of the process to ensure a positive experience that meets increasingly high shopper expectations and generates high levels of customer satisfaction that lead to long-term loyalty. From the availability of pickup windows to the time to fulfill the order, to the quality of the pick and order handoff—all of these elements are part of a fast and seamless pickup experience, and all help determine customer satisfaction levels. Encourage loyalty with record-low wait times at curbside pickup of 2 minutes or less. Learn how with Mercatus Enhanced Fulfillment.

curbside grocery pickup order pick

2. Boost profitability from your online grocery store

Outsourcing all fulfillment to a delivery-provider marketplace may reduce the burden for your team. But this convenience comes at a cost: service fee payouts that eat into your revenue. Delivery-provider marketplaces can walk away with as much as 14% of an order, leaving you with a slim 5% gross margin, before operating expenses. (From Mercatus, “Are Delivery-Provider Marketplaces Good for Grocery Retailers?”)

Instead, you can boost profitability by driving shoppers to your own eCommerce site. A grocery pickup service enables you to fulfill a greater number of orders per hour than a delivery program. 

It’s worth noting that the average order value for pick up in 2021 was 23% higher than for delivery (Brick Meets Click, eGrocery Performance Benchmarking 2021, Part 1: Topline Findings, January 2022). Plus, many online shoppers are willing to pay more for items than in-store shoppers. Managing your own grocery pickup program allows you to operate at a lower cost than delivery while enjoying larger baskets. That makes pickup a much more sustainable option than delivery over the long term.

3. Gain complete control over your customer data

Another important benefit of curbside pickup is control over your data. When you outsource your curbside grocery pickup program, not only is the shopper experience in the delivery-provider marketplace’s hands, but so is the data — including the customers’ personal and transactional data, and the data pertaining to the program overall. By owning your curbside pickup program and all the information that accumulates, you have much more control and therefore a higher likelihood of success. 

Because you can measure program KPIs, for example, you can track success and continually improve your program. 

You also gain the flexibility to adapt to market changes. For example, throughout the COVID-19 situation, those grocers who were able to quickly adapt their processes to meet sudden increases in demand saw their curbside pickup programs grow. You also have a greater ability to refine inventory selection to more closely align with evolving online customer demands.

And, with full and ready access to customer data, you can communicate directly with your shoppers so you can cross-sell and upsell to them. Customer data also gives you the fuel you need to launch a powerful personalization program that can build both loyalty and bigger baskets. Discover how AisleOne on the Mercatus platform helps you build bigger baskets.

4. Collect digital advertising revenue

When you have customer data that you’ve collected through your owned pickup program, you also have the potential to recognize another important financial benefit — the ability to collect revenue from a digital advertising program

CPG companies have been spending an estimated $11 billion a year on online advertising. Grocers who rely exclusively on delivery-provider marketplaces for their online orders may miss out on their share of the revenue from digital ads. When you operate your owned pickup program and work with a partner like Mercatus, you can enjoy an easy revenue source, with no work on your part. Mercatus Digital Advertising uses the data you’re already collecting and links you with CPG companies that want to advertise to your customers. Targeted native digital advertising presents seamless, holistic ads to your customers, boosting basket size and providing you with ad revenues. (Read more about how effective Mercatus Digital Advertising can be.)

5. Scale your curbside pickup operations with enhanced flexibility 

By owning your pickup program, you can optimize the entire process to keep up when overall demand increases (such as those that occurred during lengthy pandemic restrictions), as well as short-term peaks (such as long weekends and special occasions). 

If your stores are receiving an influx of orders, you can increase order capacity without needing to adjust staffing. With optimized picking technology, for example, you can map out efficient pick paths, so that employees can pick multiple orders per hour and increase the order fulfillment rate. This kind of flexibility helps prevent customer drop-off due to a lack of available windows and increases efficiency and therefore profitability. 

With the right curbside pickup program partner, you have access to these and numerous other technologies and solutions that enable you to scale up your program as it grows. (Learn more about technologies that support scalability.)

Leverage the benefits of curbside pickup and future-proof your online grocery business

When you invest in an efficient curbside pickup program, you’re investing in creating an experience that will satisfy shoppers, build long-term loyalty, and increase your margins. This is an investment that will continue to reward you for years to come, especially since online grocery shoppers are increasingly opting for curbside pickup as their preferred fulfillment method. To deliver on their expectations, you need a robust platform you can trust with fulfillment integrations that allow you to manage each stage efficiently and scale your operations with growing demand. 

Fast-growing grocers partner with Mercatus Enhanced Fulfillment to create a frictionless curbside pickup program that promises reduced operational costs, increased profit margins, happier shoppers, and a bigger loyal customer base. Mercatus Fulfilment is designed to empower you to take control of your online shopping experiences and track and manage all orders from one single place. From optimized basket sourcing to seamless handoff, Mercatus enables you to go beyond customers’ expectations and deliver enhanced convenience via your curbside pickup program. 

Learn how you can enjoy greater success and profitability by enhancing your curbside pickup program. Download our free eBook, The Keys to Success with Online Grocery Fulfillment.

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Headshot of Sylvain Perrier

Sylvain Perrier is President and Chief Operating Officer at Mercatus. He has more than fifteen years’ executive-level experience in retail technology, and has dedicated his career to driving the success of grocery retailers with pragmatic, easy-to-use technology.