In April 2020, only 6.6% of U.S. retail chains offered curbside pickup. As of February 2021, 50.7% of them did. It's just one example of the fastest digital transformation we’ve ever experienced. But where do we go from here?
Before March 2020, there was online retail or in-person retail—the two realms rarely crossed the invisible lines dividing them.
How things have changed.
In April 2020, only 6.6% of U.S. retail chains offered curbside pickup. As of February 2021, 50.7% of them did. It's just one example of the fastest digital transformation we’ve ever experienced. But where do we go from here?
Independent retailers need to seize this moment of change to drive pandemic investments home. That means continually improving digital integrations that unite online and in-person customer experiences, as well as refining curbside and eCommerce services.
Retailers that had no, or limited, online shopping capabilities managed through skyrocketing demand for it—and customers are loving it. An analysis by Digital Commerce 360 shows consumers spent 44% more online last year than in 2019, and online sales jumped from 15.8% in 2019 to 21.3%.
"Everybody already knew how to shop on Amazon," says Sam Kirkland, strategic relationship manager with Epicor. What was different over the last year is that people began developing online relationships with the businesses in their communities, ones they normally visited in person, Kirkland explains. Building and garden centers, hardware stores, pet stores—suddenly, he says, all these businesses had more reach with websites that expanded the customer experience.
For many retailers selling online for the first time, the pandemic was a learning curve. Establishing great service levels across every touchpoint is the new path forward. Moving forward, online and in-store shopping—along with evolving customer demands—will continue to transform how brick and click melds. What we already learned is that consumers want consistent, integrated experiences across digital and in-person experiences, from big retailers to small ones. Establishing great service levels across every touchpoint is the new path forward.
But if you're an independent retailer, stretching your resources to align with expanded consumer expectations could be challenging. But focusing on three specific customer demand areas may have the most business impact.
Mastering the unification of online and physical retail experiences is essential for retailers, and real-time inventory management is key to helping achieve it.
“I think if a business wants to offer eCommerce—and a component of that is curbside or in-store pickup—it has to be integrated with inventory management,” Kirkland emphasizes. Otherwise, you run the risk of burning out your staff or labor budget.”
If you don't have a way to track what you're selling online in real-time, customers could also potentially buy items that aren't actually available. It's a surefire way to undo customer loyalty efforts. It also eats into profits with extra work for associates if refunds or rain checks are needed. That can damage your bottom line and reputation as a retailer.
Protecting your profits and building better customer relationships really relies on brick-and-click integrations. Kevin Hingley, director of sales at Epicor, suggests in-store sales can evolve to emulate online experiences without huge tech investments. "If I have an employee who's walking around the store with a tablet in their hand, they can be a mobile point of sale," he says. "They can help a customer while they're in the aisle, versus sending them to the register." Hingley also notes that having mobile associates may even allow you to adjust redundancy in staffing. Taking this approach, however, makes live inventory management even more critical.
Having an online store used to primarily appeal to a small segment of shoppers, Kirkland says: "We had this blended problem in retail of the past that younger shoppers wanted online. But retailers wondered whether to make significant changes when there was less demand."
Now there's no question. A major shift happened. "We've landed on between 40–65% who now probably want some type of online shopping experience," Kirkland says.
Make sure your business has an online store that isn't just a default convenience, but also an active path to customer loyalty. Creating that takes conscious, intentional effort. Strategies include:
Together, these strategies help you strike a most sustainable balance between the online and in-store aspects of your business.
At the beginning of the pandemic, retailers felt they had to get every item into their online inventory to save their business. With retailers opening back up to full capacity, there's less pressure to put everything online, says Kirkland. That means retailers can use this moment to develop a strategic vision for their brick-and-click operations.
"It's a mistake to put too many SKUs online," Kirkland points out. "Retailers need high-volume, high-margin items on their website. That's because by the time small margin items are loaded into an online store—and later, delivered curbside or packed for shipment—the associated costs for labor and packing material gobble up most of the margin."
"I truly believe that the minimum every retail business needs is product visibility," Hingley specifies. "I don't want to go to three stores to find something. I really only want to go to one store." Here again, real-time inventory comes into play. Even if you don't have every single SKU online, telling customers online what's available in-store is also a courtesy that builds goodwill.
When many businesses began selling online for the first time in 2020, it was out of financial necessity. As the economy continues to bounce back, retailers can think more strategically and creatively about how to build and refine the services that defined 2020. Curbside pickup is one of them.
Moving forward, you can think about limiting curbside to only certain, higher-margin items. Or, like delivery, customers might need to spend a minimum to get this service. Similar to IKEA's $5+ click-and-collect model, you can consider charging a fee for curbside, or offer small discounts for in-store shopping.
These are possible evolutions to help sustainably scale your curbside service as demand continues to thrive, particularly in certain industries. During the pandemic, for instance, garden centers saw huge influxes of business. In the peer-reviewed Agribusiness journal, researchers found that "plant and landscape product sales increased by $1.5 billion in January–July 2020 compared to January–July 2019."
That was hugely motivated by online shopping and curbside pickup, the journal reports—and continued online service, even after the pandemic ends, will continue to be profitable for lawn and garden retailers.
Solid ERP capabilities help retailers increase the sophistication of their delivery options and helps streamline fulfillment. As Nevada-based Moana Nursery shared, its ERP solution was essential to its success: "In only two weeks we launched an eCommerce site that generated over 370 orders and $33,000 of additional sales in just 14 days since go-live. It far exceeded any expectations that we had."
Integrated customer experiences, a strategy-focused evolution of curbside, and building smarter visions for eCommerce are central pillars of smart retailing in 2021. Building your business's capacity for all three can improve your resilience and set you up with a greater foundation for future growth.