How to Implement a Successful Pickup Program in the Era of Free Delivery

The Delivery Race Isn’t A Competition For Grocers

Free and faster delivery from Walmart, Amazon, and Instacart has permanently reset what shoppers expect from online grocery.

For many regional grocers, the instinct is to try to match it.

But trying to compete on the same terms—faster windows, lower fees, broader coverage—trades profitability and service quality for volume. 

The unit economics don’t work, the customer experience suffers, and the structural advantages that have always defined regional grocery start to erode.

Lee Lambeth, COO of Mercatus, has spent more than three decades inside grocery operations. He makes the case for a different strategy: lean into pickup where regional grocers have real, defensible advantages over the larger retailers and marketplaces raising delivery expectations across the industry.

The Strategy That Actually Works

That different strategy starts by reframing what pickup is.

Instead of simply a fulfillment method, pickup is a customer experience that puts everything regional grocers do well directly in front of the shopper.

There are four specific dimensions where the advantage of regional grocers runs in the opposite direction of what big-player delivery can consistently provide.

Accuracy

Trained store staff hand-selecting produce, checking expiration dates, and packing orders with care. Speed-optimized picks compromise on all three.

Communication

Real back-and-forth on substitutions and out-of-stocks, so customers shape their order instead of just receiving it. Fast, fulfillment-first delivery, by design, removes that exchange.

Personalization

Concierge-level service built through repetition. The same pickers learning the same customers’ preferences week after week is a form of recognition that a rotating delivery fleet can’t replicate.

Connectivity

All three combine into a relationship between the store and the customer that delivery actively erodes.

Speed and price are temporary advantages. Trust, service quality, and customer ownership are lasting differentiators. Pickup is where they get built.

Why Pickup Programs Aren’t More Profitable

Knowing pickup is the right play isn’t the same as executing it.

The gap between a pickup program that creates loyalty and one that creates complaints is wider than most regional grocers expect.

That’s because pickup sounds simple from the outside: Take the order, pick it, hand it off. 

But in practice, every stage hides operational complexity that determines whether the program runs profitably or burns through margin:

• Substitution and out-of-stock policies have to be clear enough that pickers across every store execute them the same way. 
• Multi-order picking has to prevent commingling of product across totes — easy to say, hard to do during a 6 a.m. shift with five orders in motion. 
• Staging and de-staging has to be accurate enough that customers never get home and discover missing items. 
• And the handoff has to consistently land inside the two-minute window shoppers expect, or the experience that was supposed to build loyalty destroys it instead.

Each one is solvable. None of them solve themselves. 

This is where technology stops being a feature list and starts being the operational backbone.

The Role Technology Plays

DXPro is built to remove each of these failure points:

• The pick app generates optimized pick paths based on each store’s product locations, reducing labor time per order and increasing capacity without adding headcount. 
• Recommendation models give pickers data-backed substitution options so accuracy doesn’t depend on individual judgment.
• Scan-based staging and de-staging ensures the full order makes it to the customer. 
• Built-in geolocation alerts staff the moment a customer enters the pickup area, eliminating the wait times that destroy repeat usage.

None of this is glamorous, but all of it compounds into the operational consistency that turns pickup from a service offering into a competitive moat that opens up the strategic upside most regional grocers leave on the table.

The upside of that moat is what regional grocers can put inside it. 

The Perimeter Is Where The Margin Lives

The perimeter — bakery, deli, catering, prepared meals, seasonal produce — is where regional grocers’ highest-margin categories live, and where their differentiation from mass retailers is sharpest. 

A box of Cheerios is a box of Cheerios. A custom cake from your bakery isn’t. 

DXPro supports these departments through widgets that highlight specific offerings and mini shops that create separate checkout experiences for items with longer lead times. 

A customer can complete their weekly grocery order for same-day pickup while also ordering a fruit platter for an event that weekend, all in one session.

This is what pickup-as-a-strategy actually looks like. The fulfillment channel becomes the entry point into the categories where regional grocers compete strongest.

Three Numbers That Tell the Story

To measure if it’s actually working or not, grocers can look to three specific operational signals:

1. Fill Rate 

What percentage of ordered items are actually fulfilled? Low fill rates point to substitution policy gaps or pickers not checking secondary product locations.

2. Items Picked per Minute

The speed signal, but always evaluated alongside accuracy. Outliers in either direction flag retraining opportunities.

3. On-time Order Rate 

Was the order picked, staged, and ready by the customer’s scheduled time? Even a one-minute delay counts as late.

These three numbers, tracked consistently, give grocers directional clarity on where their operation is performing and where it needs attention.

Get The Full Playbook

But this is just scratching the surface of the strategic case for pickup. 

The complete operational playbook lives in our fulfillment guide, where you’ll find:

• Unit economics
• Fulfillment source decisions
• Picking method tradeoffs
• The technology stack required to scale
• 9 metrics that separate profitable programs from expensive ones
• The phased rollout that gets regional grocers to enterprise scale within four to six months

Start building a pickup program that pays you back with our guide today.