Consumers Increasingly Do Store Pick Up, with Major Benefits to Retailers

Perhaps the predicted demise of brick and mortar retail was a bit premature.

There’s no doubt there have been some recent tough times for many traditional retailers, with a number of store closures and bankruptcies in the years before and then after the pandemic in 2020. The pandemic forced what was in theory temporary store closing in the early months of the crisis, which certainly contributed to permanent closings later.

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More specifically, 2019 saw a record number (9,302) of permanent store closures in the US. Not surprisingly, 2020 broke that record, with more than 12,000 store shutting the doors.

The numbers are better but still high for 2021. Thus far, there have been more than 3,700 store closures for the year, with some more expected before we hit 2022.

But for many retailers, brick and mortar stores remain the key element of overall omnichannel strategies, a group that notably but not exclusively includes Walmart, which broke news in late 2019 that its stores would serve as the hub of all it was doing, including ecommerce, serving as critical points of fulfillment. (See Walmart Alters Course, to Make Supercenters Core of its Overall Strategy.)

Going to physical stores for customer pick up of ecommerce orders is in fact growing – and rapidly.

According to a recent article in the UK’s Financial Times, in the first half of this year, about 20% of US ecommerce orders for traditional retailers were picked up by customers at physical stores – and that percentage is heading much higher in the 2021 holiday shipping period.

Why?

First, with all the news about potentially delayed deliveries by leading parcel carriers, a growing percentage of consumers see store pick up as more reliable bet.

And some retailers are upping the ante. Office Depot, for example, recently announced store pick-ups would be available within 20 minutes of a customer placing an order on-line. Lowe’s stores now offers locker storage for self pick-up of ecommerce orders at all stores.

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This trend of course has many benefits for retailers. For example, it drives more financial benefits from store assets. In addition, many customers picking up orders add a few additional items to their carts before leaving

Best of all, it eliminates costly last mile delivery, often provided at no charge, by outsourcing the delivery to the customer, significantly improving the profitability of ecommerce business.

“The physical locations will serve as a critical component of digital strategies this holiday,” Rob Garf, general manager of retail at Salesforce, told the Financial times, adding that home delivery from parcel carriers will be more expensive and slower this year, even more so than in 2020.

Also driving store pick up, some retailers cut off free shipping in the weeks before Christmas, and with rising parcel rates many may do so even earlier this year. When consumers see the high cost of delivery, many will opt to pick the order up at store.

Stores have also become key fulfillment points for ecommerce at many retailers such at Duluth Trading Company, taking advantage of closer proximity to the customer and thus lower shipping costs than if the order shipped from a distribution center, and often providing faster delivery as well.

Brick and mortar retailers obviously aren’t out of the woods yet, under the relentless assault from Amazon, but for now at least are playing a growing role in the strategies of almost every chain.

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