Never Mind the Delivery, More Online Consumers are Turning to Store Pickup

livemint.com:

When Kinneret Shick Ohana, a 36-year-old mother of five in South Florida, recently ran out of pasta and hot dogs, she didn’t go shopping at a grocery store or even order the food to be delivered. She placed an online order, then drove to her local Walmart a few hours later to collect it at the curb. It’s a routine Shick Ohana, who works from home as a social-media influencer, has gotten used to, even as the market for online order delivery has boomed since the pandemic.

“It saves a lot of time and it saves a lot of money too," Shick Ohana said, because she avoids delivery charges as well as impulse purchases at the store. The line between e-commerce sales and in-person shopping is blurring as more shoppers place orders online and then go pick up their goods rather than wait for a delivery van to reach their home. Retailers have added the service known as buy-online, pickup-in-store partly to restrain the fulfillment costs that can cut into profit margins.

Store workers pick and pack the orders and either bring them out to customers’ cars or set them in a designated pickup area, rather than go through the more complicated logistics of connecting warehouses to parcel carriers. For retailers including Walmart, Target, Macy’s and others, it is an extension of their attempts to use their physical stores as kinds of virtual fulfillment centers, a strategy that has grown out of the surge in online shopping during the Covid-19 pandemic and the strain it exerted on companies’ distribution operations. Costs associated with home delivery are equivalent to 10% to 15% of an e-commerce brand’s sales, versus 2% to 3% when a truck delivers goods to stores, according to Deutsche Bank Research.