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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: 1097128

Reported Deaths: 17438
CountyCasesDeaths
Marion1437882222
Lake712531225
Allen65537867
Hamilton50147482
St. Joseph48760639
Elkhart39461538
Vanderburgh34221495
Tippecanoe30237271
Johnson27179463
Hendricks25845379
Porter25014381
Madison20656444
Clark19898275
Vigo18764308
LaPorte16857260
Delaware16425291
Howard16408311
Monroe16379217
Kosciusko13936163
Hancock12841185
Bartholomew12686188
Warrick11995189
Wayne11879265
Floyd11869225
Grant11701235
Morgan10252188
Boone9675120
Noble9069121
Henry9002165
Marshall8907146
Dearborn881799
Dubois8710139
Shelby8054128
Cass8014127
Lawrence7922182
DeKalb7591106
Huntington7448108
Jackson743893
Gibson7002118
Montgomery6910123
Harrison685296
Knox6827113
Steuben654186
Miami6477107
Whitley642260
Putnam631982
Clinton618976
Wabash6060108
Jasper601791
Jefferson5689103
Ripley549192
Adams532381
Daviess5003116
Scott480378
Wells471799
White468767
Greene461799
Clay457462
Decatur4529109
Jennings439666
Fayette435694
LaGrange419290
Posey403244
Washington384154
Randolph3818107
Fountain368362
Spencer355846
Fulton355572
Starke348772
Owen346276
Sullivan344954
Orange324470
Jay318650
Rush298332
Carroll289438
Franklin286744
Perry283253
Vermillion280458
Tipton247365
Parke246330
Pike244144
Blackford218044
Pulaski205658
Newton179052
Brown171850
Crawford167929
Benton163217
Martin150819
Switzerland145112
Warren132216
Union117816
Ohio91413
Unassigned0585

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1683472

Reported Deaths: 26483
CountyCasesDeaths
Franklin1766331826
Cuyahoga1641462636
Hamilton1122641528
Montgomery794721387
Summit702171199
Lucas618431017
Butler55878803
Stark525841170
Lorain41058639
Warren35404412
Mahoning35095769
Lake31445493
Clermont30711362
Delaware26682182
Trumbull26664611
Licking26200335
Medina25291351
Fairfield24173287
Greene24051369
Clark21653387
Portage20709280
Richland20587336
Wood19626246
Allen18542320
Miami17031348
Columbiana16502331
Muskingum16416206
Wayne15432304
Tuscarawas14086357
Marion13054194
Erie12423198
Ashtabula12314225
Scioto12235182
Pickaway12070151
Ross11487223
Hancock11256173
Geauga10666174
Lawrence10504171
Belmont10259231
Huron9588155
Jefferson9462225
Union939175
Sandusky9068166
Seneca8692156
Knox8618169
Washington8613156
Athens827396
Darke8270179
Ashland7840147
Auglaize7741115
Shelby7337132
Defiance7210114
Crawford7082150
Brown7052115
Fulton7016111
Logan6857108
Mercer681697
Guernsey680283
Highland6615117
Madison641389
Clinton6388106
Williams628798
Preble6171139
Putnam6089120
Jackson572396
Champaign568286
Perry558879
Coshocton5552103
Ottawa553599
Morrow506464
Fayette483170
Hardin477899
Gallia462978
Pike459076
Van Wert454691
Adams4514109
Henry424976
Hocking401493
Holmes3939137
Wyandot367973
Carroll351578
Paulding319349
Meigs302457
Monroe231860
Noble216447
Morgan210138
Harrison205152
Vinton183937
Unassigned05
Fort Wayne
Clear
42° wxIcon
Hi: 50° Lo: 34°
Feels Like: 36°
Angola
Partly Cloudy
41° wxIcon
Hi: 47° Lo: 31°
Feels Like: 36°
Huntington
Partly Cloudy
40° wxIcon
Hi: 48° Lo: 34°
Feels Like: 36°
Decatur
Clear
42° wxIcon
Hi: 50° Lo: 35°
Feels Like: 36°
Van Wert
Clear
43° wxIcon
Hi: 49° Lo: 35°
Feels Like: 38°
The warming trend is expected to continue through Thursday before cooler air returns to the Midwest.
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