As delivery options proliferate, retailers hope to add convenience, avoid confusion
CHICAGO — The questions shoppers faced at the checkout counter used to be as simple as “cash or credit?” and “paper or plastic?”
Today — especially online — it’s a little more complicated. Are you making a one-time purchase, or would you like to subscribe and get a discount? Do you want to pick up your items at the store and avoid paying for shipping? If so, will you come inside for your bags or download an app that will summon an employee to your car?
Perhaps you’d rather have them shipped to a package pickup station or your home. Would you prefer same-day delivery? Next-day or two-day shipping? A drop-off by aerial drone?
While it might seem like shopping now requires a flow chart, the retailers that have proven most prolific in giving customers new ways to buy online say it’s what their shoppers demand.
“Guests have expectations about convenience and speed, and we need to be able to meet those expectations,” said John Mulligan, Target’s chief operating officer.
Chicago will be the first major city to have four of Target’s newest order fulfilment services — in addition to existing choices like next-day or two-day delivery and subscriptions — when Drive Up, the retailer’s curbside pickup service, comes to city stores in early July.
The additions also include two versions of same-day home delivery: one for groceries and other items ordered through the Shipt app, and another for items customers buy in a store but can’t or don’t want to carry home. Target Restock, which provides next-day home delivery on thousands of household items, has been in stores nationwide since May.
There has been an “explosion of different forms” of online order fulfilment, said Ken Cassar, principal analyst at Slice Intelligence, an e-commerce research company. That’s despite the fact that offering more options generally means more work for the retailer.
Amazon is setting the agenda and forcing other retailers to keep up, said Brian Kilcourse, managing partner at Retail Systems Research.
Earlier this year, Amazon said more than 100 million shoppers subscribed to its Prime membership, which offers free two-day shipping and other perks. With Amazon’s full range of options, members can get orders in two hours or less, or they can wait six days and get a reward or discount, depending on the item purchased.
Shoppers can place orders online, subscribe to receive regular shipments or click an itemspecific button — real or virtual — to automatically place an order. Customers who don’t want packages left on their doorstep can send them to a pickup locker or store or buy a smart lock so Amazon can deliver to their home or car.
Competitors have responded by lowering the minimum purchase amount to qualify for free shipping and speeding up delivery times, according to Slice’s data, gathered from consumers’ email receipts.
Some, like Target and Walmart, have been working to develop new shopping and delivery options of their own. Walmart has tested a system that allows shoppers to scan items with an app as they shop and pay without visiting the cash register. The system already is available in Sam’s Club stores. More than 500 new Pickup Towers, where customers can retrieve online orders, will be in Walmart stores this year, the company said in April.
While Amazon has been a leader, Target isn’t blindly following. “Our focus is doing things we think we can do very well,” Mulligan said.
That means taking advantage of its network of stores and paying attention to details that make for a better experience, like minimizing the time shoppers spend waiting for curbside pickup.
Drive Up orders arrive on employees’ hand-held devices with a loud honk to keep them from getting lost amid other alerts. Target also asks customers to provide the colour and type of car they drive so employees can more easily figure out which order goes in which trunk.
At stores that already have the Drive Up service, an order is typically delivered within two minutes of the car’s arrival, Mulligan said.
The “culture of service” was also part of the reason Target opted to acquire same-day home delivery company Shipt last year, he said. Customers shopping in the app can leave notes by each item for an in-store buyer, like whether they prefer their bananas green or ripe and brownspeckled, and they can choose to have their shopper send a text message before making a substitution if an item is out of stock, said Shipt’s Kit Naramore.
Consumers like convenience, but they also like consistency, meaning there is a risk if keeping track of the various purchasing and delivery options, fees and types of items covered becomes more hassle than it’s worth, said Kilcourse, of Retail Systems Research.
“It has to be easier to use than ignore,” he said. “Consumers are short of two things: money and time. If you force them to figure out some decision tree to get to a
program, they’ll abandon it quickly.”
A customer buying groceries on Amazon, for instance, might use Amazon Fresh, which delivers fresh groceries and other products as soon as same-day; Prime Now, which delivers a range of items in two hours or less; or Prime Pantry, which delivers household essentials.
“Just like there are different grocery options in the physical world — from convenience stores to supermarkets to club stores — we have built several online services that satisfy different shopping occasions,” Amazon spokesperson Lynsey Kehrli wrote in an email.
Kehrli said customers generally gravitate to the service — or combination of services — that best fits their needs.
For now, most online orders are shipped from a distribution centre to the customer’s home, said Cassar of Slice Intelligence. But when it comes to products like packaged food and household cleaning products, online orders filled from local stores — whether picked up by a consumer or delivered by a service like Instacart — are growing faster, he said.
“Collectively, I think retailers are going in the right directions by offering more and more options,” he said.
If there is a limit to the range of choices consumers want to see, Mulligan doesn’t think we’ve hit it yet.
But he said the company is working on how to explain its range of services and which work best in which situations.
“Part of it is not making it all on the guest to understand it, but having our technology try to understand what’s happening and which is the right service,” Mulligan said.
It’s not something Target can do today, but “that’s a challenge for us.”
New services also add complexity for the retailers. Target slowed down its push to let customers pick up online orders in stores a couple of years ago after realizing it needed to improve store technology and processes to get the quality of service it wanted, Mulligan said.
But once it had that underlying system in place, “what comes next is the easy part,” he said.
The various additions mean some employees spend more time filling online orders than staffing registers, but Emmett Smith, team lead at Target’s West Loop store, said the adjustment hasn’t been difficult.
Employees use the same handheld devices to pick up items for orders shipped from the store, whether they deliver them to the pickup counter, a customer’s trunk or box to be shipped. Shipt buyers check out like any other customer. Stores also aren’t responsible for figuring out which local courier should deliver an in-store purchase to a shopper’s home — Grand Junction, a company Target acquired last year, handles that.
“It’s not asking more of the team,” Smith said.
Most retailers will likely keep testing ideas, but eventually they’ll focus on improving and expanding a couple that catch on with consumers, Kilcourse said.
Mulligan said Target is happy with its existing options. For now, it’s focused on continuing to roll out services like Drive Up and Shipt nationwide. Future expansion might be less about finding new delivery options than finding new uses for the ones Target already has, like promoting Restock as a way to get household essentials to a college student’s dorm room during move-in weekend.