Ulta, Kroger, DG & Michaels Make Click-and-Collect Headway
Click-and-collect services were already growing in popularity before the pandemic, but this year slingshot them into use as stores were kept closed and new fulfilment methods were needed. To their credit, retailers rolled out new technology and services faster than many thought possible pre-pandemic.
Now, shoppers are becoming accustomed to click-and-collect conveniences like buy-online-pickup-in-store (BOPIS) and — as any parent with small children in the backseat will tell you — the dream-come-true of curbside pickup.
Retailers are beginning to see the value in doubling stores a fulfillment centers for e-commerce orders. Heading into the holidays, retailers expanded the services and added features like curbside customer alert notifications, updated signage, and dedicated parking. On Black Friday, +62% more retailers messaged click-collect-services like BOPIS and curbside in offers YoY, according to RetailMeNot findings.
Below, RIS takes a look at the latest click-and-collect headway made from four top retailers:
- Ulta Beauty introduced curbside pickup on April 19, 2020. The retailer recently launched a curbside customer alert notification, refreshed curbside signage and established dedicated Ulta Beauty parking spaces at select stores. It also expanded its store locator functionality to include greater visibility to store-specific service offerings and separate store and curbside hours.
- E-commerce growth slowed relative to the second quarter, but e-commerce operations delivered a comp increase of 90% for Q3 2020, CFO Scott Settersten said. BOPIS totaled about 16% of e-commerce sales, approximately double the penetration in the third quarter last year.
- “Although, e-commerce will likely continue to be a headwind to overall EBIT margins, we are improving e-commerce profitability as we increase utilization of BOPIS, leverage size and scale with growth and get closer to our guests through the expansion of our supply chain network and we see additional opportunities to mitigate rate impacts in the future,” Settersten said.
- Kroger’s early investments in contactless fulfillment — including more than 2,200 pickup locations and over 2,450 delivery locations — has enabled it reach 98% of its customers with in-store shopping, pickup, delivery and ship-to-home modalities.
- As part of this, it’s building out a flexible network of fulfillment options and working with key solutions providers.
- It’s reduced the cost to fulfill a pickup order in store by double digits compared to the same period last year, while significantly reducing customer wait times. This has helped keep the Restock Kroger cost-saving initiative on track to reach its targeted $1 billion of savings this year.
The Michaels Companies
- Customers can now receive text alerts when their BOPIS orders are ready for pickup. When opting for curbside pickup, they can notify stores with their arrival via a text from the parking lot.
- Michaels has added a BOPIS option to its app and improved signage to make it easier for customers to pickup orders at stores. Additionally a new online express checkout option allows customers to purchase their basket in just four clicks.
- Since its introduction, curbside has the highest net promoter score of all of Michaels’ online channels.
- E-commerce revenue grew 128% in Q3 2020 to $115 million and represented nearly 10% of third quarter revenue. A significant portion of Michaels’ e-commerce sales are fulfilled through BOPIS, curbside pickup and same-day delivery, so the retailer enjoys strong profitability, CEO Ashley Buchanan said.
- The retailer expanded DG Pickup, its BOPIS service, to nearly 17,000 stores during the quarter, which is nearly across its entire fleet. Just over 2,500 stores offered it at the end of Q2.
- Dollar General also plans to expand its DG GO app — which enables shoppers to scan items using their mobile phones, find coupons and discounts, and pay in-app — to more stores.
- It’s also bringing self-checkout to more stores. During the quarter, it accelerated the rollout of self-checkout to more than 900 stores, compared with about 400 stores at the end of Q2, and it will expand this moving forward.