During the coronavirus crisis, the curbside replaces the store for some retailers
Retailers are sending employees outside as customers make heavy use of curbside pickup options. Some retailers are forgoing in-store foot traffic entirely.
As the novel coronavirus—the virus that causes COVID-19 disease—continues to spread and more states and cities impose shelter-in-place directives, some retailers are sending employees out to the curbside or parking lot to accommodate their social distancing shoppers.
Curbside pickup and home-delivery only
With many merchants are closing stores, retailers have turned to curbside pickup and home-delivery options. In some cases, store-based retailers are forgoing in-store foot traffic entirely, making store interiors off-limits to shoppers—essentially turning them into pickup points for online orders brought to customers’ cars. Some retailers, like The Container Store and Nordstrom Inc., are already setup to handle curbside orders from a people, process and technology standpoint. Other retailers, like fabric retailer Joann, decided to launch curbside in response to the coronavirus, and are determining the operational tactics on the fly.
Online business looking good in coronavirus crisis
The Michaels Cos. (No. 249 in the 2019 Digital Commerce 360 Top 1000), an arts and crafts retailer that already offered a
buy online pick up at store (BOPIS) option, launched curbside pickup this month.
The retailer had a “significant uptrend” in its online business, both for delivery to home and for BOPIS, CEO Mark Cosby told analysts March 17 according to a Seeking Alpha transcript. In the fourth quarter, which ended Feb. 1, BOPIS accounted for 45% of Michaels’ online sales, Cosby said during the conference call. As of March 24, the Michaels website warned shoppers that orders placed for home delivery could be delayed due to high demand.
Similarly, fabric retailer Joann (No. 394) recently launched curbside pickup at all of its 860 stores to accommodate shoppers wanting to social distance. Some stores are allowing shoppers to come in and make face masks and covers, gowns and other items to donate to U.S. hospitals. Joann will provide and donate 100% of the supplies needed for these projects for those who come in to make them, the company says.
Once the COVID-19 crisis ends, a lot of customers currently using BOPIS will probably appreciate the convenience of that option and stick with it, says Brendan Witcher, principal analyst at Forrester Research Inc. But he expects some retailers to back off encouraging curbside pickup because it’s more costly to operate and decreases foot traffic inside stores.
Forrester’s research shows 30% to 40% of shoppers who go into a store to pick up an online order end up buying additional items, Witcher says.
While governments continue to order shoppers to stay at home, however, retailers see curbside BOPIS as a way to keep serving customers in a safe way.
Best Buy starts curbside-only service
Electronics and office supply retailer Best Buy Co. Inc., which already offered curbside pickup, moved on Sunday to a curbside-only service for all its 977 U.S. stores on an interim basis. Best Buy’s curbside-only policy applies to more than orders made online. If a customer was unable to place an online order and the product is in stock in the store, employees can go into the store to claim the item for the customer and sell it to them curbside, Best Buy (No. 13) says.
Best Buy customers can continue to order online for home deliveries. However, large products such as appliances will be delivered “where permitted and under strict safety guidelines with everything left outside near the customer’s door.” Best Buy has suspended all in-home installation and repair services. It is conducting in-home consultations virtually, Best Buy says.
Best Buy’s move to a pickup-only model for its stores follows that of home goods giant IKEA Retail U.S., which announced March 16 it would temporarily close all 50 U.S. stores for in-store shopping. Selected stores remain open to handle at-store pickup, IKEA says. Home delivery also remains available.
IKEA (No. 37) also announced temporary closures in other countries hit by COVID-19. Those countries include Austria, Belgium, Canada, Czech Republic, Denmark, Germany, Italy, France, the Netherlands, Poland, Slovakia, Spain and Switzerland. With the spread of the coronavirus reportedly slowing down in China, IKEA is gradually reopening stores in China, the company says. A spokeswoman declined to comment.
Not everyone’s online business is doing great
Nordstrom (No. 18), a department store chain, announced a two-week closure of its stores starting on March 17. But the retailer has continued to sell online —including online order pickup and curbside services at its 116 full-line stores and digital styling. That shutdown period expires before many state shelter-in-place orders end. The company declined to discuss its online sales during the shutdown. In a March 16 statement, Nordstrom said: “While February sales were in-line with expectations, the company experienced a broad-based deceleration in customer demand over the past couple of weeks, particularly in markets most affected by the virus.”
Another retailer moving to a curbside-only model is video game retailer GameStop (No. 46). Beginning on March 22, GameStop began offering a contactless delivery service called [email protected] at all U.S. store locations where state and local laws allowed. Shoppers have the option to place an online order for pickup at their local stores. Once their orders are ready, the shoppers then call the store once they’re waiting outside. A store employee then brings the order out to where the customer is waiting.
The duration of store closures will almost certainly be extended in some places, in compliance with shelter-in-place orders in 17 states. In California, the order went into effect March 19 and will stay in place “until further notice.” In Illinois, the state stay-at-home directive ends April 7. Delaware’s order ends May 15 or until the “public health threat is eliminated.”
In an email, Nordstrom said it is closely monitoring directives from state and local authorities and will make adjustments to its store-closure schedule to comply with those directives.
The ecommerce industry is still hiring during the coronavirus crisis
While some retailers are closing stores, online retailers and those offering essential services, such as grocery stores, are hiring hundreds of thousands of people to help keep up with the demand:
- Amazon.com Inc. (No. 1) warned customers March 2 about backlogged orders because demand outstripped its delivery capacity. Amazon later said it would hire 100,000 people—and give U.S. workers a $2-an-hour raise to meet crushing demand from customers placing online orders for household essentials rather than going to stores.
- Walmart Inc. (N0.3), a mass merchant that is also America’s largest grocer, recently announced plans to hire 150,000 new employees—and these include full-time, part-time and temporary positions in distribution centers and fulfillment centers.
- Albertsons Cos. (no. 204), a grocery retailer, announced March 23 it would work with 17 companies to provide part-time jobs to their employees who have been furloughed or had their working hours cut. A spokeswoman confirmed that company’s business is up—both in-store and online—but declined to be specific.
- Grocery store operator Hy-Vee Inc. is hiring an unspecified number of additional temporary, part-time hourly employees to help fill multiple positions. Jobs will be in stores across its eight-state region as well as its distribution centers located in Chariton, Iowa, and Cherokee, Iowa, the company announced March 20.
- The Publix supermarket chain (No. 637) announced March 20 it plans to hire “thousands of associates” by the end of March to fill positions in its stores and distribution centers.
“Operationally, ecommerce wasn’t prepared for this,” Witcher says. That’s especially true in the grocery sector, which has largely not made investments in robust ecommerce platforms. The result, he says, has been backlogged orders.
The COVID-19 crisis has created a lot more online shoppers, Witcher says. But as more people in the U.S. lose their jobs, it’s not clear that this will lead to higher overall ecommerce sales. He says evidence shows that online transactions have soared, but order values have not, as consumers focus on buying necessities instead of making discretionary purchases or buying big-ticket items like major appliances and luxury goods. People worried about losing their jobs are “not going to be out buying soccer balls and massages,” he says.Favorite