The COVID-19 pandemic has reshaped our reality. This is especially true in retail, where an entirely new set of rules seemed to go into effect in March and April. Looking back to 2019 and early 2020, the wheels were turning on several trends. For some, the coronavirus pumped the breaks. For others, it punched the accelerator. Hard.
E-commerce and online grocery orders in particular have soared during this period. Underlying those, we’ve seen a number of trends beginning to emerge that could play a big role in the future of retail. Here are 3 trends that stood out:
- Diversity in E-commerce
E-commerce has evolved substantially beyond the click-it and ship-it phase of its youth. In August of last year, we blogged about the rapidly rising buy online, pick-up in store (BOPIS) or curbside pickup model. Just a month before the pandemic took hold across the U.S., Walmart ran their first ever Superbowl ad, shining a bright spotlight on their growing curbside pickup service. Fast forward a couple of months and as the new shopping conditions of COVID-19 set in, BOPIS went from a rising trend to a new normal quickly.Uncertain and inconsistent shipping from eCommerce retailers, even Amazon, drove many to reach to curbside pickup from their local big box stores and grocers. This propelled massive jumps in eComm sales numbers. For Walmart, comp sales were up 10% in Q1, with eCommerce soaring by 74%.In April, Target saw an additional $1.1 billion in sales growth relative to 2019, with over $950 million of that attributed to eComm sales for BOPIS and home delivery. According to CEO Brian Cornell, on an average day in April, Target was fulfilling more online orders than they were on Cyber Monday 2019.Ecommerce shoppers are working with a triangle of expectations, with speed, price and convenience at the points. Curbside pickup allows them to get their items with the greatest speed, while avoiding delivery fees with only a minor cost to convenience. - Delivery Partnerships
Looking back at 2019, the one big question on every retailer’s mind, “How are we going to compete with Amazon?” While they are still the biggest fish in the pond, we’ve seen the market respond when they announced their plans to take Amazon Prime delivery from two days down to one last April.
Restaurant closures and the hesitancy of consumers to shop in brick & mortar environments unless it is absolutely necessary have put third party delivery partners on the front lines. Instacart, Shipt, UberEats, GrubHub, Doordash and Postmates have all become household names as shoppers try to get the specific foods, groceries and retail items they want in hand faster.
So, what’s the takeaway here? Gig delivery is surging. To take a Snapshot, in March, Instacart had roughly 200,000 shoppers by April, they were looking to grow to 750,000. Crowd sourcing shopping and last mile logistics may very well be the answer for the field of midsize retailers to compete with Amazon across several categories.
- Increased Automation and Self Service
If pandemics and pandemic prevention are part of a “new normal,” minimizing the opportunity for contagion will be a priority. The world was already trending toward autonomous machinery replacing low-skilled labor, and this current situation just adds more fuel to the fire.For e-commerce and online grocery, automated fulfillment centers like those Kroger has been building in partnership with Ocado limit the possibility of workplace-centered outbreaks and contaminations while reducing long term labor costs. These fulfillment centers use a sophisticated network of machines to pack orders for delivery (or potentially pickup).
In the brick and mortar environment, minimally staffed stores like Amazon Go stores and cashier-less checkout will also likely have a rocket strapped to their back, as minimizing risk slots in nicely alongside their improved efficiency and reduced costs.
Earlier this month, Retail Dive reported Walmart was experimenting with a new model in their Fayetteville, AR Supercenter where they were swapping out all of their traditional checkout lanes for 34 customer operated self-checkout stations. In this experiment, employees would act as hosts, floating between lanes and assisting customers where necessary. Walmart hopes this non-traditional approach will feel less transactional and more personalized.
