Curbside Pickup Will Play a ‘Premiere Role’ in the Future of Retail, Analysts Say

It’s hard to compete with the convenience of e-commerce, but for omnichannel retailers with large fleets of physical stores, curbside pickup offers many of the same advantages.

Walmart shoppers can now pick up their orders without leaving their cars at more than 2,000 locations nationwide, a number that the company aims to increase to more than 3,000 by year-end. Earlier this month, Target announced a rollout of its Drive Up program to more than 1,100 stores, with plans to expand to other cities throughout the country later this year.

And while these chains may be ahead of the pack on curbside pickup, thanks to their deep pockets and large brick-and-mortar footprints, other retailers will likely follow suit: in a new report, the investment banking firm Cowen forecasts that the channel will drive $30 to $35 billion in sales by 2020, and at least 25 percent of Americans will have tried it. (As of February 2019, 13 percent of Walmart shoppers and 10 percent of Target shoppers had tried the service, according to the firm’s research.)

“Curbside has incredibly high satisfaction scores as the service saves shoppers time, eliminates the need to enter stores and eliminates the friction of searching aisles for products, as well as standing in lines to check out,” lead analyst Oliver Chen wrote in the report. For retailers looking to compete with Amazon and other e-commerce heavyweights, allowing shoppers to drive by and pick up an order on their way home is a promising option, bypassing shipping wait times, delivery windows and, in some cases, extra costs.

The service has a similar appeal to buy-online-pickup-in-store (BOPIS), which was up 47 percent during the 2018 holiday season over the year prior, according to data from Adobe, with retailers like Kohl’s, Macy’s and Old Navy touting their click-and-collect programs. Several shoe brands and department stores have already experimented with curbside pickup: Nordstrom offers the service as an exclusive for members of its Nordy Club loyalty program, while employees at Nike’s tech-centric Los Angeles concept store, Nike Live, will bring orders to shoppers’ cars while they wait.

Chen writes that the rise of curbside shopping will drive change and innovation in physical stores: retailers will be encouraged to cut down on superfluous brands and styles, invest further in robotics for picking and packing and eventually launch automated pickup stations. Companies that can afford to build the infrastructure for the service will also reap the benefits in terms of data collection.

“The curbside shopping experience is ripe for practical personalization given prior order interaction data, feedback programs, broadline selection and prescriptive shopping possibilities,” writes Chen.

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