Divergent Delivery Apps Now Offering Click and Collect
Last month (May 2019), Google made news with its latest announcement: you can now order food for pick-up or delivery without an app. That means that as you're scrolling through Google Search, looking up directions on Google Maps, or bossing around your Google Assistant, you can also order your next meal – then either go pick it up, or wait for it to appear on your doorstep.
This is the latest in a rapidly cresting wave of non-grocers getting in on food delivery, and more recently, click-and-collect. Though the trend came to restaurants first with companies like Seamless/Grubhub and Uber Eats, grocery delivery from non-grocers isn't far behind.
On one hand, this isn't a surprise. Consumers love the convenience of online shopping, and more and more are placing grocery and meal orders directly from their smartphone. But what does seem puzzling is the fact that delivery apps are jumping on the click-and-collect trend. Isn't the point of a delivery app that it, well, delivers?
The numbers around click-and-collect explain its appeal. In the U.K., where click-and-collect is already several times more popular than in the U.S. (5% of all sales compared to the U.S.'s 1.5%), it's predicted to fulfill 10% of all sales by 2025, with in-store purchases declining to 60%. In the U.S. the overall click-and-collect market is predicted to be worth $35 billion by the end of 2020. By then, it's projected to account for one third of Walmart's digital sales; the megastore is currently expanding its curbside pick-up service to over 3,000 more locations (with it already in place in a little over 2,000).
With numbers like that, it's no surprise that non-grocers want in. And for delivery apps, who already have the infrastructure to fulfill online orders, plus an existing relationship with grocers, the jump to click-and-collect isn't a big one.
Non-grocer channels offering click-and-collect
Just before Google's big announcement, Uber Eats launched Pick-Up, an extension of Uber's delivery service that allows consumers to order restaurant meals for take-out via their app. Deliveroo, a home delivery meal service based in London, announced a similar new feature in February; last week, they followed up with a second headline: they've received a $575 million investment from Amazon (ostensibly as a shift away from their failed meal delivery service, Amazon Restaurants). Amazon has offered click-and-collect at Whole Foods since 2018, via its Prime Now service (i.e, for Amazon Prime members).
Instacart, the San-Francisco-based company who made "grocery delivery" a household phrase, has also made the jump to click-and-collect. Aptly called Instacart Pickup, the new feature, announced in November 2018, allows shoppers in select U.S. cities to order online and pick-up in-store at grocers such as Publix, Aldi, Sprouts Farmers Market, Food Lion, Tops, Wegmans, Schnuck Markets, and Price Chopper. Six months after launching, Instacart called Pick-Up a success and has already doubled its reach, seeing larger basket sizes as well as "increased digital adoption for retailers."
The state of click-and-collect in grocery
Walmart is currently in first place in the race to offer click-and-collect. Their free pick-up service is the largest in the country, and it's a frontrunner in the developing technology. For instance, their app allows customers to park in a dedicated parking spot and use the app to notify an employee, who would then bring out their order. Shoppers can also pre-order ready-made meals for pick-up (another step in the trend pitting grocers against restaurants).
Offering a user-friendly click-and-collect service has enormous potential for profit – not only because it provides current shoppers with another fulfillment option, but because it can widen your target market. It’s also less difficult to implement than a delivery model, and much cheaper to operate.
According to Cowen and Company, between 40-60% of Walmart's curbside pick-up sales are from new customers. GroceryDive notes that 65% of Walmart's click-and-collect shoppers are also Amazon Prime members – meaning that the service might have the benefit of luring Amazon shoppers to Walmart.
Challenges of click-and-collect to grocers
Despite the benefits, though, click-and-collect can be difficult for grocers to implement on their own. It's labor-intensive, requiring dedicated personnel to fulfill orders and, at some stores, ferry them out to the parking lot. It requires dedicated space in-store. And, it requires the back-end technology to run a sophisticated online marketplace with multiple fulfillment options.
So what can grocers do?
Up your eCommerce game now. Offer click-and-collect (this is "mandatory," according to Baralliance), as well as other features that will set you apart from the competition, such as home delivery, Endless Aisles, and Meal Planning. These will not only make your current customers happy, but will also attract some away from your competitors.
Pay attention to consumer trends, and pivot your business accordingly. Consumer behavior is changing rapidly in response to developing technology, and that means that grocers must be keenly aware of changes in trends. To get the most up-to-date news in eGrocery, subscribe to this blog below.
As non-grocers join the fight for click-and-collect market share, it's important to remember that established grocers have a strong foundation to stand on – your brick-and-mortar store, the customer experience you provide, and your unique brand. By capitalizing on those as you transition to online, your business can compete against the delivery apps of the world.
In order to do that, many grocers are turning to third-party companies to provide a mobile-first, end-to-end software solution. Such a service can help your business overcome the challenges and reap the benefits of click-and-collect, while also offering other eGrocery solutions that will keep your business competitive.
For a free demo on how locai can partner with your grocery business to create and intelligent, top-of-the-line eCommerce platform, click here.