Dawn and I have used Wal*Mart’s grocery pickup service for about 2-years. We go online and reserve a pickup time, compile the grocery list, make the payment online, then show up at the reserved time and somebody puts the groceries in our car’s trunk. It’s easy to do and we avoid the endless walk up and down aisles, the general irritation of being in a crowd, and standing in a long line. It also saves time and, since we’re shopping from a list and avoiding impulse purchases, saves money.
But: How does Wal*Mart benefit by doing this? It took me a while to figure it out.
-
Improved inventory control and ordering. The more people who shop online, the better their understanding of what they need to have in stock. That means less waste in a business with notoriously low margins.
-
Shorter lines in the store, meaning fewer cashiers drawing payroll.
-
Fewer people in the store means more pleasant shopping for those who come inside.
-
Greater customer loyalty; why would I go to Food Lion and stand in line?
-
Fewer bad checks.
Wal*Mart has benefited from social isolating; suddenly, it’s hard to reserve a time for grocery pickup, because there is a sharp increase in demand. But because they began offering the service 2-years ago, they have worked the kinks out and know how to do it; the problem they have is scale, not how.
So far as I can tell, most of the other retailers around here are totally lost and hurting. We placed an order online with Ace Hardware for pickup later in the day, and they completely blew it; I wonder if they have ever filled an online order.
So the problem confronting a lot of merchants is not merely that they’re closed or open for only sharply abbreviated hours. Because a lot of people are going to continue with online grocery shopping even after the coronavirus matter ends, it means that at least some (Food Lion, say) customers aren’t going to come back at all; they’re going to stick with the convenience of grocery pickup at Wal*Mart. The nature of grocery shopping, and a lot of other retail, is going to permanently change.
Clearly, retailers that began early and worked-out the bugs are going to enjoy a huge advantage over the next months, and those who haven’t adjusted to the new paradigm are going to be badly wounded if not killed outright.