Consumers Are in Love With Curbside Pickup

Retailers are going all in on the service, but some are tacking on fees to justify the added labor.

August 30, 2022

ALEXANDRIA, Va.—Curbside pickup is here to stay, reports the Washington Post. A recent study found that 33% of adults younger than 50 who got into the habit of curbside pickup during the pandemic plan to continue.

“Retailers have started to see it as a competitive advantage,” Katherine Cullen, senior director of industry and consumer insights at the National Retail Federation, told the Post. “They know it’s something shoppers like … and it addresses the reality that there’s not really a distinction in consumers’ minds anymore between online or in-store.”

Because consumers are shifting their spending to need-based purchases, such as food and gas, retailers are attempting to win over the consumer through a positive shopping experience, including offering multiple shopping options, such as curbside pickup and buy online, pick up in-store (BOPIS).

“I think consumer habits and behavior are changing so rapidly that there isn’t sort of one thing that is consistent across the board,” Conor Flynn, CEO of Kimco Realty, a real estate investment firm, told the Post. “It’s almost like how you shop for groceries today—there’s no consistency. People go to like three different grocery stores for three different things. And I think the same goes for how people shop—whether it’s online, or in-store, or curbside, or buy online—they sort of want the menu of options that works and whatever works for them that day.”

However, because in-store shopping is returning, retailers must justify the added labor from curbside pickup and BOPIS, so some have started to charge fees for curbside pickup. Most major retailers don’t charge a fee if customers meet a minimum order amount, but Sam’s Club recently added a $4 charge for customers who do not have Sam’s Club Plus, the club’s premium membership.

“As in-store shopping meaningfully returns, retailers now have to start comparing the cost of curbside fulfillment using additional labor to in-store purchases,” Chad Lusk, a retail consultant at Alvarez and Marsal, told the Post, adding that Sam’s Club’s move could be used “as a way to [incentivize] consumers fully back into stores.”

However, while club stores may add on fees, Bob Hoyler, a retail consultant with Euromonitor International told the Post grocery stores wouldn’t be able to tack on fees without customers reacting negatively, especially those that use grocery apps like Instacart and Shipt, which already add on fees and have higher prices.

Grocery stores are physically adapting to the curbside trend by investing in microfulfillment centers and automated facilities separate from the store, according to Lusk.

Cullen told the Post that microfulfillment centers work great in urban areas, but they are not the norm in rural areas, where omnichannel shopping options work the best.

These omnichannel options are just beginning, according to Flynn, and he told the Post that he believes they’re “going to evolve, but it is very clear that it’s working and a lot of customers love it.”