Retail's Amazon antidote: Buy online, pickup in store

Brick-and-mortar retailers like Walmart, Target, and Best Buy found an advantage over Amazon this holiday: Store pickups on online orders.Offering cus...

Posted: Dec 30, 2018 8:56 AM

Brick-and-mortar retailers like Walmart, Target, and Best Buy found an advantage over Amazon this holiday: Store pickups on online orders.

Offering customers free pickups for digital orders has become a key part of these retailers' strategy to compete against Amazon's rapid and extensive home delivery network. Retailers have blanketed the country with store pickup options in recent years, and those investments paid off during the holidays.

Buy online, pickup-in-store spending increased 47% from November 1 to December 19 compared to a year ago, according to data from Adobe Analytics. Adobe said it was the biggest holiday on record for online pickups.

Customers have been quick to embrace online pickups from stores. Analysts say it appeals to shoppers who want to grab their stuff and go without waiting in checkout lines or interacting with sales workers on the floor.

At Walmart's investor day in October, Chief Customer Officer Janey Whiteside said pickup was attractive to both "a time-pressed mom" heading home after picking her kids up at school and a "convenience-seeking baby boomer on the way home from the golf course."

Picking up mobile or online orders from stores in hours can also be faster than waiting days for home delivery. It works for last-minute holiday shoppers who need to buy a gift in a hurry. Old Navy even partnered with Lyft to offer customers free rides to stores for online pickups last Saturday.

"The issue with delivery is that it can take several days," said Georgianna Oliver, the founder of Package Concierge, a firm that creates in-store lockers for retailers. She said weekly orders have doubled for her company's lockers since last last year.

For retailers, pickup is a better economic model because they can avoid paying expensive shipping fees. Retailers' profit margins have dipped in recent years from fulfilling online orders.

"The realization of the growing costs of e-commerce fulfillment pushed many brands to step it up this past year," said Steve Dennis, a retail consultant and former executive at Sears and Neiman Marcus.

Amazon (AMZN), which lags rivals in the space, just started offering grocery pickup from Whole Foods in August. It's only available in 22 cities. It has also been building out new stores like Amazon Go, Amazon Books, and Amazon-4 Star.

Best Buy (BBY) started offering pickup more than a decade ago. Forty percent of Best Buy's online orders today are picked up at one of its 1,000 US stores. "Stores are a wonderful asset,"CEO Hubert Joly told CNN Business in a recent interview. "People choose to go to the store because in less than an hour you can pick up your stuff."

Customers often select pickup from Best Buy instead of home delivery because they're buying gifts for family members, or they don't want to risk someone stealing an expensive TV off their porch, Joly said.

Walmart (WMT) has raced to add grocery pickup to more than 2,000 stores in four years. It also has added pickup towers for general items to 700 stores over the past two years. By the end of the year, it will be able to reach 70% of the US population with pickup, it said.

Walmart will soon overtake Apple as the third largest online retailer in the country thanks to customers picking up groceries in stores, according to report by research firm eMarketer.

Target (TGT) was late to roll out pickup, but has scaled what it calls "drive-up" to around 1,000 stores. Employees bring customers' orders out to their cars.

Target said that it was helping the company reduce costs. "Given the cost of last mile shipping, we like the economics of drive-up much better," Target Chief Operating Officer John Mulligan told analysts in November.

Despite the growth opportunities, pickup is not easy to operate and presents several obstacles for retailers, including security, inventory control, and staffing. Retailers have to implement procedures that prevent fraud, Oliver said.

Retailers also need to make sure stores don't run out of stock for online orders, and that workers are not overwhelmed with double duty handling pickups and running stores. Walmart, for example, has 25,000 trained personal shoppers to select produce and meat at stores for online orders.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 707111

Reported Deaths: 13216
CountyCasesDeaths
Marion963501718
Lake51613944
Allen39106671
Hamilton34449405
St. Joseph33979539
Elkhart27255432
Vanderburgh22060394
Tippecanoe21765212
Porter17945298
Johnson17507374
Hendricks16786310
Clark12681190
Madison12338337
Vigo12204244
Monroe11443166
LaPorte11118204
Delaware10341184
Howard9652211
Kosciusko9114114
Hancock7964139
Bartholomew7880155
Warrick7681155
Floyd7555176
Wayne6895198
Grant6837171
Boone6541100
Morgan6390138
Dubois6079117
Marshall5779108
Dearborn569876
Cass5683102
Henry5572100
Noble540683
Jackson493069
Shelby478495
Lawrence4338118
Gibson427989
Harrison427670
Clinton418653
Montgomery417786
DeKalb409184
Huntington378680
Whitley377939
Miami372465
Knox365989
Steuben364457
Putnam352560
Jasper350146
Wabash347678
Adams337952
Ripley334568
Jefferson312980
White308154
Daviess289299
Wells286281
Decatur278792
Fayette277162
Greene270685
Posey268533
Scott261053
Clay253244
LaGrange252470
Randolph235280
Washington230731
Spencer227631
Jennings224747
Fountain208445
Sullivan207742
Starke203952
Owen192156
Fulton191439
Jay186029
Carroll185720
Perry180236
Orange177253
Rush170724
Vermillion166043
Franklin165635
Tipton160943
Parke144616
Blackford133831
Pike130234
Pulaski113645
Newton103534
Brown100040
Crawford97614
Benton96713
Martin82615
Warren79615
Switzerland7698
Union69910
Ohio55711
Unassigned0408

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1052099

Reported Deaths: 18991
CountyCasesDeaths
Franklin1221671356
Cuyahoga1070432069
Hamilton781801168
Montgomery50040996
Summit45383909
Lucas40122765
Butler37721570
Stark31437895
Lorain24166473
Warren23885293
Mahoning20905583
Lake20009362
Clermont19441229
Delaware18038130
Licking16124207
Fairfield15708197
Trumbull15585460
Medina14868259
Greene14668236
Clark13634293
Wood12767185
Portage12384196
Allen11328229
Richland11041198
Miami10536214
Muskingum8706127
Wayne8576209
Columbiana8546226
Pickaway8436121
Marion8377135
Tuscarawas8376240
Erie7566154
Hancock6714123
Ross6699146
Geauga6537146
Ashtabula6495165
Scioto6289101
Belmont5626158
Union557647
Lawrence5467102
Jefferson5324147
Huron5307114
Darke5273121
Sandusky5174120
Seneca5124120
Washington5076107
Athens501556
Auglaize475684
Mercer471684
Shelby456090
Knox4387108
Madison422859
Putnam421599
Ashland413188
Fulton409467
Defiance402596
Crawford3872101
Brown386455
Logan372976
Preble370398
Clinton361560
Ottawa356978
Highland347059
Williams326774
Champaign320657
Jackson308451
Guernsey306649
Perry289949
Fayette277848
Morrow275339
Hardin264264
Henry263766
Coshocton259457
Holmes253399
Van Wert239162
Gallia233346
Pike233331
Adams228552
Wyandot227253
Hocking209059
Carroll189247
Paulding168638
Meigs141538
Noble132837
Monroe128841
Morgan106623
Harrison105336
Vinton81514
Unassigned02
Fort Wayne
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Angola
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Small chances for isolated drizzle Saturday night & Sunday. Sunday morning starts cold, with the potential for frost area-wide, but warms up to where we should be this time of year.
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