It’s no surprise to hear that retailers’ online sales are surging through the coronavirus pandemic. But would you guess that for some of the biggest winners, it’s their physical stores that gave those sales a boost?
Even as consumers grapple with stay-at-home orders and their own fears of contagion, a surprisingly large number are willing to pick up their digital orders at a store. Target Corp said sales through its curbside drive-up option — shoppers order online, pick up at a store — increased 1,000% in April compared to a year earlier. More than 2 million customers tested out the drive-up feature for the first time, the big-box retailer said, and the volume was so strong that there were more orders collected that way in the first quarter than in all
Sales through Lowes.com were up 80% in the three months ended on May 1, and more than half of those online orders were picked up in a store, the home-improvement retailer said.
Walmart Inc and Home Depot Inc observed the same trends. “It’s time we stop referring to our Supercentre pickup and delivery capability as online grocery because it’s becoming much more,” Walmart CEO Doug McMillon said on the company’s earnings call.
There are a couple of takeaways from this. First, it seems that for all the hand-wringing over the lasting impact to physical retail real estate from the pandemic, stores still have a role
to play, when used appropriately. As skyrocketing
demand snarled logistics networks and caused huge delays in deliveries, customers were willing to be flexible to get the items they needed. Practically speaking, there’s not a huge difference risk-wise between retrieving a box from your front porch and picking one up from the curb of a store. Having that option may have helped the likes of Target, Walmart, Home Depot and Lowe’s capture sales from customers who were stumped by sold-out notices at online-only retailers or who previously did most of their shopping at a physical location.
Notably, Walmart cited customers aged 50 years and older as a
demographic that saw significant growth. Meanwhile, Women’s Wear Daily has reported that Amazon.com Inc is exploring a potential deal with bankrupt retailer
JC Penney Co. It’s not exactly clear what the Internet giant’s intention would be, but one possibility is that it could be a bid to add more options for online-order distribution such as curbside pickup.
The nature of square footage may have to evolve; Target talked about the need to add more parking spots and storage space. And this model isn’t going to work for all retailers; those that didn’t have an effective digital strategy beforehand may be caught irreversibly flat-footed. Lowe’s Cos CEO Marvin Ellison sounded audibly relieved that his company had invested in improving its e-commerce capabilities when it did.