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Will curbside retail be a viable strategy post-Covid?

Click and collect was a well-established channel prior to the Covid-19 pandemic and proved popular with a subset of regular consumers. The past 18 months have seen rapid channel growth with an average of 100-per-cent increased channel volume through that period for brands on the Localz platform. 

Although many retail locations have reopened for in-person shopping, at least for periods of time between lockdowns, experts believe that the emerging preference toward e-commerce retail solutions, especially hybrid solutions like click and collect, is here to stay.

Curbside retail is a subcategory of the click & collect model – sometimes called “Bopis” (buy online, pick-up in store). Both curbside and click & collect allow shoppers to make purchases online, then pick up orders at a store. Curbside collection gained popularity as a “contactless collection” option during the pandemic because it offers a way for both employees and customers to abide by social distancing guidelines and avoid periods of face to face contact.

And curbside shopping has been lucrative: Retailers in Australia and around the world that implemented the option during Covid largely thrived. In the US, for example, Target reported curbside sales growth of over 700 per cent in Q4 2020, and Best Buy saw more than $2 billion in revenue from curbside or in-store pickup in Q2 2020

Many consumers are now growing accustomed to the added control they have over when and how they receive their purchases – and the likelihood is that they won’t want to relinquish that control once things fully return to normal. 

Curbside collection gives consumers choice and control 

Curbside collection isn’t just a way for shoppers to minimise unwanted exposure to crowds. It can also help overcome the shortcomings of buying online, especially as related to cost, choice, and time. Curbside collection is often free or cheaper than delivery fees, making it an attractive option for customers. 

Curbside collection allows buyers to choose factors like location and timing as part of their purchase. Products can be picked up later in the day or, if stock is unavailable, delivered to the home with advanced last-mile fulfilment. When a purchase doesn’t meet expectations, consumers can select from a number of locations to execute a free return on their terms.

CommBank reports that choice is extremely or somewhat important to over two-thirds of consumers. People want a purchase that balances the ease of e-commerce with the instant gratification of brick-and-mortar shopping. Click and collect meets this requirement.

Experts believe that curbside retail is here to stay

“I think consumers discovered this newfound convenience and they will actually stick to curbside, which has massive implications, as you can imagine, for retail,” predicts Sajal Kohli, a senior partner at McKinsey.

It’s clear from the revenue boosts many companies saw last year that curbside retail can be a competitive edge over rivals who don’t offer the convenience.

Dick’s Sporting Goods, for one, experienced a record Q2 2020, with 75 per cent of online orders fulfilled by stores, and even after it reopened stores last June, curbside continued to thrive. CEO Ed Stack expects the segment to grow beyond the pandemic.

Similarly, after Best Buy shifted to a curbside-only model in March 2020, it saw online sales jump 242 per cent in Q2. Although Best Buy reopened stores last June, CEO Corie Barry reported that curbside would actually be enhanced to provide more functionality and convenience for customers.

Woolworths has seen its direct-to-boot offering become a permanent and expanding feature of its supermarkets advising that they will be expanding capacity from an average of two lanes to eight lanes per store

Across Australia and New Zealand, Localz has seen the average proportion of click & collect orders fulfilled via curbside maintained at between 63-65 per cent in regions where lockdowns have been eased and stores opened pointing to a clear and sustained consumer preference.

The bottom line: In today’s world, customers are selecting channels that will provide them with stock certainty, convenience and control. Curbside meets these needs and can be a profitable and efficient channel for retailers too which points to its ongoing growth in a post-covid world. 

About the author: Tim Andrew is co-founder and CEO of Localz.

Main image: @tone-ttm via Twenty20.