Maybe Future of Retail Won’t Be Shipped but Picked Up

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Delivery or pickup? It’s a standard question when ordering a pizza or a Kung Pow Chicken dinner, and it’s becoming a standard question no matter if you’re ordering groceries or a new set of shelves. Even when shipping for online purchases is free—and this is increasingly the case, especially during the holiday shopping season—there are reasons for consumers to prefer pickup over delivery. And retailers have even more reason to like it when shoppers pick their goods up rather than have them shipped.

In the retail world, the biggest no-brainer push for pickup is for goods that are difficult if not impossible to ship — namely groceries. While some food staples are fine for shipping (coffee beans, for instance), most of what you’ll find in the supermarket is too sensitive, too prone to getting moldy or damaged, and/or too awkward, bulky, or heavy for it to make sense to hand over to Fedex, UPS, or the Postal Service.

Peapod, the nation’s biggest online grocer service, launched Peapod Pick-Up in recent weeks in Massachusetts. Shoppers placed their orders via computer, tablet, or smartphone, and later pick up their goods at a Stop & Shop supermarket. Three more Peapod pickup operations are set to open in the near future in the Chicago area.

(MORE: Groceries or Mobile Phone? Plenty of Consumers Spend More on the Latter)

At the beginning, pickup orders can only be placed by customers who live within 10 miles of a pickup location. Shoppers will be given one-hour windows during which they must swing by for their orders. To get shoppers interested, the service will initially be offered free of charge in the Chicago area. Eventually, the cost for a pickup order will be $2.95, which is cheaper than the normal grocery delivery charge of $6.95.

According to the Baltimore Sun, a Charlottesville, Va., company called Relay Foods is also expanding its pickup groceries operations. Online grocery shoppers in Virginia have a choice of 60 pickup sites, including hospitals, school gyms, and the University of Virginia campus. Over the next 18 months or so, the company plans on having 30 to 40 pickup sites in the Baltimore area.

Grocery shoppers are hardly the only consumers interested in pickup options for online purchases. The Amazon Lockers service, in which customers place orders with the online retail giant and pick them up at a locker at 7-Eleven stores, is most attractive to consumers who don’t want to have to stick around their apartments for hours, waiting for their precious merchandise to arrive via UPS. Instead, they order the goods and have them shipped to a locker that can be opened on a touchscreen with a code. Such lockers are already in operation in cities such as New York, San Francisco, and London. The service not only works better for certain shoppers—who can get their stuff faster, and don’t have to worry about anything getting stolen from outside their home—it’d seem to be very promising for Amazon. It’s cheaper, after all, to have multiple items shipped to the same location, rather than having drivers bring each order to individual homes. The service also makes it easier for Amazon to cut down on processing times, helping it compete better with brick-and-mortar retailers, perhaps even with same-day shipping.

(MORE: Top 10 Conspicuously Expensive Purchases)

Speaking of brick-and-mortar retailers, they too have obvious reasons to embrace pickup over shipping. Starting a couple of years ago, stores began offering free in-store pickup for online orders, and by now the service is fairly standard. When customers come into the store to retrieve their online purchases, it not only saves the store on shipping costs, the pickup brings with it the possibility that the shopper will browse the aisles and buy some other stuff on top of what they’re picking up.

Over the summer, the New York Times reported that more than half of the orders placed at Walmart.com are being picked up at a Walmart store, not shipped to the customer’s home or office.

(MORE: What’s in Store: How Mobile Shopping Will Change the Brick-and-Mortar Experience)

The Container Store, meanwhile, has begun offering a drive-thru service, in which online orders can be picked up without the customer ever having to leave her car. “Especially for that mom that’s got kids in the car and is trying to run five errands today,” says a Container Store executive, “this allows her to put us on her list with no additional pressure.” As long as the store is on a shopper’s list, the store should be happy.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

2 comments
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ToddPoshera
ToddPoshera

I don't believe in-store pickup is the future and grocers will have to figure out how to profitably deliver to the customer's door. Time is an increasingly precious commodity and customers will not want to spend it "running errands".  If those food lockers were at your house or apartment complex for a reasonable rental fee, perhaps grocery delivery would then be widly adopted.