Drive Through Pickup is Kick Ass — I told you so! Its my Patent. Can I get some royalty?! ;-)
Ever since Amazon barged into the perfectly synchronized theme party of big-box retailers enjoying all the love of American customers up untill the late 90's, Amazon played its cards with the best suite and pulled the rug under some of the well established players in the retail game such as — Sears, Kohls, Circuit City (once upon a time), JCPenny and many more. However, there were quite a few big and smart ones to roll up the sleeves and leverage their core strengths to notch up the fight against Amazon.
It looks like I am saying often times these days, but Oogway — of Kung Fu Panda fame says:
“ There is no such thing as coincidence!”
Earlier last week Target (TGT) reported upbeat quarterly earning and one of primary factors highlighted during the earning call, was its strategic shift in leveraging its stores as “Drive Through Pick up Points”
“When it’s delivered by our stores … those look a lot more like store economics,” the Target CEO explained
Thats a good insight.. isn’t it?
A little more than a decade ago, one of the “mega projects” I had worked on at Amazon — was actually launching the Target E-Commerce website on Amazon’s core E-commerce platform. In 2007–08, Amazon thought it was “good business” to commodotize and “sell the e-commerce platform as a enterprise product “— much like SAP or Oracle — to other not-so-tech-savy (at that time) retail players out there. Target, Marks & Spencer's and few others retail giants (that were arguably much bigger than Amazon at that time) were among those “early-adopters” of “Amazon’s Enterprise Software Playbook / Strategy”
I couldn’t even imagine to think of that strategy — Enterprise Software — given the monumental tech leveraged position Amazon has now in the market precisely due to its supremacy in building robust, scalable and superior e-commerce platform — the whole gamut — that set Amazon apart in many ways from rest of the pact!
But as Jeff Bezos always says — Amazon never shy’s away from experiments and so they tried this mega experiment as well, only to quickly fold it up and shelve it for good by 2010–11.
A decade ago, Target was not serious about Technology or perhaps E-Commerce or maybe both. But then Kudos to Target leadership team for having invested heavily in technology, online / mobile shopping experience and “the whole sha-bang”
How is this helping Target? Quoting from the press-release
80% of its Q3 growth was the result of same-day fulfillment options, including order pickup, Drive Up, and Shipt (its delivery service). Target shoppers have flocked to these options. Order pickup had the slowest growth, up 50% year over year, while Shipt orders doubled. Drive Up, Target’s highest-rated service, delivered growth of more than 500%. Customers have the option of shopping online or via the Target app, with most orders ready for pickup within an hour.
Two of those same-day fulfillment options — in-store pickup and Drive Up — are also helping draw more customers into Target’s stores. The company reported comparable-store sales that grew 4.5% year over year. While 1.7% of that growth was from digital sales, the remaining 2.8% was the result of growth from in-store sales. The combination of both in-store and digital channels increased total traffic by 3.1%.
These glorious metrics do not come out of thin air! This is hard work and meticulous investment into leveraging technology to improve customer experience!
Now lets see what spooked Walmart’s gains in the last few quarters
As you know Walmart is THE 800 pound Gorilla in the retail industry from diapers to electronics to guacamole! It doesn’t get bigger than this!
For nearly 20 years now, Walmart, the world’s largest retailer, has struggled to pull its online act together while rival Amazon.com seized nearly half of the U.S. online shopping market.
Most recently Walmart posted better than expected earnings and revenues and digging deeper in to the report, it is not easy to miss that one of the biggest payoff’s has been their investment into technology and specifically seamless integration of online purchase with in-store pickup.
Walmart strategy has been to dig deeper into their core strengths in Grocery and Consumables categories in which Amazon has not been able to make too much headway. This has taken time but has paid off for Walmart in the last few quarters.
With Amazon’s acquisition of Whole Foods and Cashless Amazon Go Stores — there is no surprise that Amazon is targeting to monopolies the last retails category segments out there. Its good that Walmart is woken up deep slumber and giving a good fight. We’d have to see how this pans out.
There is yet another old daddy Big Box Retailer who have survived Amazon’s onslaught — Best Buy. Best buy’s last quarter blew past expectation and the stocks went on to surge to their 52 week highs. What is the trick up the sleeves for Big Box retailer selling consumer electronics — surprise, surprise — its buy-online-drive-through-in-store-pick-up phenomenon — again!
Great! Everything seems fine. So Ok now why am I saying all of this then?
Three things:
- As the title of this blog says — “Its my freaking Patent!!” and I am super excited and thrilled that the patent / idea that I filed in 2011, and which was finally accepted in 2016 by USPTO — is now a key driver of growth for some big honchos out there! ain’t that cool! :-)
- I strongly believe that buy-online-drive-through-in-store-pickup is going to be the Paradigm shift in the buying patterns of consumers in the next half-decade. I believe so for a variety of reasons ranging from — being responsible, environment conscious citizens of the earth, to cutting on shipping cost, to “nobody has any freaking time to roam around berserk in Big Box Stores searching for peanut butter jelly in one end of the store to grabbing razors in the other end of store!”
- While all this might jolly things up , this was a patent / concept / idea thought of within Amazon back in 2011 (one more time — by me!) , which is sort of being implemented now in 2019 by others! So Amazon is like way ahead in the game of inventing and re-inventing and effectively “changing” consumer buying patterns. Amazon is well positioned to lead the way in retail, commerce, e-commerce for the next decade+
Sweet Dreams Everyone! :-)
