Owning your curbside grocery pickup program can lead to increased profit margins and customer loyalty. Discover four ways to get started.
Curbside grocery pickup (click and collect) has emerged as a clear winner in the evolution of retail grocery in our post-pandemic world. Since 2020, grocery pickup in the US has been gaining share of wallet over ship-to-home and delivery services, now capturing nearly 50% of online grocery sales.
This past year, Target saw a record-high 20% jump in sales to $94 billion, with online order pickup and delivery accounting for 18% of total sales. Their secret to success? Owning their curbside pickup experience.
As you look for ways to build new wins for your grocery retail business in 2021, it may be time to revisit your click and collect program.
In an earlier post, we looked at five key elements for a successful grocery pickup program. But there’s an overarching component that we didn’t touch on, one that is the single-most important factor in determining success: ownership. Many grocers need to use a third-party delivery provider as an economical way to offer home delivery. But when it comes to curbside grocery pickup services, ownership brings many benefits.
By investing in ownership, you win in four key ways: increased profitability, more control, shopper loyalty and program scalability.
1. Boost program profitability
Outsourcing all fulfillment to delivery-provider marketplaces reduces lift for your team. But this convenience comes at a cost: service fee payouts that eat into your revenue.
Instead, you can boost profitability by driving shoppers to your own eCommerce site and optimizing your fulfillment program in-house. If your stores are receiving an influx of orders per day, there are some ways that you can fill more orders each hour with the same staffing.
For example, are you using the more time-consuming single-order pick method, where one picker shops an entire order? With optimized picking technology, you can map out efficient pick paths, so that employees can pick multiple orders per hour and increase order fulfillment rate.
2. Take control
When you outsource your curbside grocery pickup program, the shopper experience is in the delivery-provider marketplace’s hands. This means everything from order substitutions to order issues is handled by a third party, leaving you unable to monitor or step in if needed.
One of the most important things to control is the customer experience, to ensure every aspect is consistent with your brand. When you own your program, you can determine who fulfills orders on your team and ensure they’re trained to your standards of service. And, because you also own all shopper data, you can measure and track success and continually improve your program. When outsourcing your program, you lose the benefits of full data access and the insights along with it.
With this control also comes flexibility and the ability to adapt to market changes. As we’ve seen with COVID-19, those who were able to quickly adapt their processes to meet sudden increases in demand have seen their curbside grocery pickup program grow.
Find out more about how taking control can help your grocery pickup program succeed.
3. Improve customer loyalty
Customers have used the pandemic as an opportunity to try out different online shopping experiences. Our 2020 research with Incisiv discovered that, of the 43% who had shopped online over the previous six months, only 26% shopped from their preferred brick-and-mortar grocer. It’s even easier for shoppers to try out new grocers when they visit a marketplace site. Research has shown that when consumers shop through a marketplace site, their loyalty is with the marketplace, not the vendors.
But when you own your eCommerce program, you build and nurture customer loyalty to your brand by offering a top-notch online shopping experience. One way of doing that is by ensuring a fast and seamless order handoff at pickup. This leaves your new and returning shoppers happy, leading to repeat orders going forward.
Convert loyal shoppers with record-low wait times at pickup of 2 minutes or less. Learn how with Mercatus Enhanced Fulfillment.
4. Scale your curbside grocery pickup program
Offering shoppers the fulfillment time slots they want is another key success factor, yet this is an area that could often be improved. Brick Meets Click’s David Bishop notes that time slot availability is especially critical when shoppers are comparing it with delivery options, where third parties are offering options as early as same-day.
By owning your pickup program, you can optimize the entire process to ensure a satisfying shopper experience, from order assembly to substitutions to order handoff at curbside. Tweaks in these areas will help you keep up with increased demand overall, as well as peaks such as long weekends and special occasions.
Canadian online grocer Voilà by Sobeys is a great example of an owned eCommerce program that has been able to successfully and profitably scale to meet the rapidly increased demands of the pandemic. Their automated robotic warehouse provides an incredibly efficient picking process, timed at about 5 minutes to both pick and pack an entire order. This has allowed the company to accommodate a 315% jump in e-Commerce sales, and is paving the way for its expansion of delivery and pickup offerings.
Invest in your success
When you invest in owning your pickup program, you’re investing in creating an experience that will satisfy shoppers, increase margin and build long-term loyalty. That’s an investment that will continue to reward you for years to come.
Learn how you can enjoy greater success and profitability by enhancing your pickup program. Download our free eBook, How to Build a Successful Grocery Pickup Program.