Morning Brew - ☕️ Grab bag

The must-have for today’s customers? Curbside pickup.
Morning Brew November 05, 2021

Retail Brew

Square

Welcome back. Well, this is going to be good. AMC’s very own popcorn is coming to a supermarket (and mall kiosk) near you next year. Will that be an acceptable snack to sneak into theaters?

In today’s edition:

  • Curbside pickup is here to stay
  • Bed Bath & Beyond will get a marketplace
  • Crocs and ThredUp pair up

—Julia Gray, Katishi Maake, Jeena Sharma

STORES

Pick me up

Curbside pickup packages

Francis Scialabba

Curbside pickup dates back (at least) to 1920s department stores and personal shoppers, but, like many present-day conveniences, the service didn’t become modernized until the 2000s with the rise of the internet. In 2019, retailers like Walmart and Target had been experimenting with designated curbside pickup parking spaces. But the need for contact-free speed really picked up in 2020 because of Covid.

Supermarket chains were among the first to employ pandemic-era curbside pickup options as customers sought groceries and household essentials without the risk of shopping in-store. The term “contactless” gained popularity in step.

“That’s what started the renaissance of curbside pickup,” Jonathan Zhang, a marketing professor at Colorado State University, told Retail Brew. “Things seem to be under control with the pandemic…[but] it’s here to stay. Behaviors have evolved.”

  • 62% of online shoppers in the US now expect retailers to offer the service, according to a May survey by shipping software provider ShipStation.
  • Click-and-collect sales, meanwhile, skyrocketed to $72.5 billion in 2020—more than double that of 2019—and aren’t predicted to stop growing any time soon, per eMarketer.

“The ability to offer curbside pickup is key to a customer experience for the modern-day shopper,” added Salesforce’s Michelle Grant, senior manager of strategy and insights.

“Consumers have become addicted to convenience in all aspects of their life. And this is the most convenient way of fulfillment for those who have a car, which is a lot of Americans.”

Let’s go

Retailers are more than willing to meet shoppers where they want to be. As of August 2020, nearly 44% of the top 245 retailers offer curbside pickup, up from 6.9% at the end of 2019.

The reason isn’t solely because consumers see curbside as a cheap and fast fulfillment option.

“From the retailer’s perspective, the benefit is even bigger,” Zhang explained. It’s cost-effective, compared to paying for a delivery service, and enables easy returns.

  • It also allows the company to serve more customers and “increases the efficiency of the store...without expanding the physical real estate.”

Not so fast: Curbside may be less costly and labor intensive than home delivery, but retailers are making other sacrifices. Customers don’t get the same “treasure hunt” experience picking up a product versus buying it in a store, explained Tyler Higgins, retail practice lead and managing director at AArete. This will be the challenge moving forward.

“At the beginning of the pandemic [curbside] was heavily predicated on safety. Now, retailers are trying to explore how curbside delivery can be a component of an overall customer experience strategy,” Higgins told us. Because one thing is for sure: It isn’t going anywhere.

Click here to read more on how curbside has become a must-have for both consumers and retailers.—JG

        

E-COMM

Third-wheeling

A Bed Bath & Beyond storefront

Flickr

You get a marketplace, you get a marketplace, and *you* get a marketplace.

Bed Bath & Beyond is the latest retailer to announce it will add third-party brands to its online platform.

  • The move comes as part of BBBY’s three-year transformation strategy, which has included introducing new private labels and testing shop-in-shop partnerships.
  • Bed Bath & Beyond also said this week it would partner with Kroger to sell home and baby products on the grocer’s website and in stores next year.

Digital dash: Online marketplaces have become an increasingly popular strategy for companies not named Amazon (count Express and Hudson’s Bay as examples) simply because of the growth opportunity, explained Mohit Mohal, managing director with Alvarez & Marsal’s Consumer & Retail Group.

About two-thirds of consumer e-comm spending worldwide is done on marketplaces, according to Forrester.

  • The pandemic has pushed even more online shoppers to these platforms.

Mohal said there are three main incentives that make online marketplaces attractive for retailers: The large selection of items, the convenience for the consumer, and the competitive pricing.

“This is the new normal. You’re going to have a bunch of dominant marketplaces, which will have the eyeballs or the traffic coming to them,” Mohal told us. “They have a wide assortment. I can buy anything and everything [that] I need at competitive pricing. And then my basket size is big. I don’t have to pay for shipping.”—KM

        

TOGETHER WITH SQUARE

The Future of Retail Is in Sight

Square’s Future of Retail & Shopping Report is here, and you don’t even need to consult your empath to verify its insights.

Square partnered with Wakefield Research to see how 500 retail managers and 1,000 consumers are moving ahead in the retail world, from revamped physical spaces to seamless online shopping capabilities. Here’s a peek:

  • 74% of retailers plan on using real-time inventory technology this year
  • 84% of retailers who sell online either already sell on social media, or plan to, this year 

To help retailers define and own their success today and tomorrow, Square’s Future of Retail & Shopping Report shares trend analyses, insight from retail experts, and the tools to put these pivotal ideas in motion. 

Get the report here.

RESALE

No tears

ThredUp bags

Francis Scialabba

Crocs has collabed with Balenciaga, Justin Bieber, and even KFC. Now, it’s partnering with ThredUp on a resale program.

  • Customers across the US can send in their pre-owned stuff via ThredUp—no, the initiative isn’t limited to Crocs—and receive a shopping credit from the shoe company in return.

Breaking it down: The program is part of Crocs’ push to become a net-zero company by 2030.

“Our footwear is incredibly durable, which means we have a unique opportunity, through partnership and other avenues, to keep Crocs shoes on feet and out of landfills,” Adam Michaels, the company’s chief digital officer, told Retail Brew.

  • “Educating consumers about reuse and offering them a simple and rewarding way to give their old Crocs a new life is a priority for us.”

+1: The brand also recently introduced a new bio-based Croslite material into its footwear, which aims to cut the carbon footprint of each pair of Crocs in half by 2030.

Zoom out: Plenty of retailers are now looking to resale as a way to boost their sustainability efforts as younger shoppers demand—and embrace—it.

“Even five years ago, even three years ago...the conversation has changed,” Pooja Sethi, ThredUp’s SVP and general manager of Resale-as-a-Service, said to us. “The conversation has changed from: ‘Why should I get into resale?’ to ‘How can I get into resale?’”

  • Madewell and Adidas are among those that have partnered with ThredUp this year. Net-a-Porter, meanwhile, plans to pilot a luxury resale service.—JS
        

WHAT ELSE IS BREWING

  • The retail sector added 35,000 jobs in October.
  • Kroger says the press release claiming the grocer would accept bitcoin is fake news.
  • Saks is building out its livestream operation for the holidays.
  • Francesca’s is rolling out Franki, its tween offshoot, as its own brand with a separate website and pop-ups.
  • Nintendo can’t meet holiday demand for its Switch due to the chip shortage.

SPONSORED BY KUSTOMER

Kustomer

New expectations for the customer experience. Don’t worry, it’s exciting—and we’ve found exactly which tools can help you deliver ~exceptional~ CX. Kustomer’s Retail CX Toolkit breaks down what these new consumer expectations are and how real-life brands are delivering. You’ll hear from the director of CX at Glossier, learn how Abercrombie & Fitch leverages tech to personalize service, and explore all the proof points in consumer research data. Unlock the entire toolkit here.

SWAPPING SKUS

Today’s top retail reads.

Statement piece: John C Kay, the engineer of Uniqlo’s art partnerships, explains what makes a successful collaboration. “We just want to make sure that people get an original idea, an authentic idea.” (Hypebeast)

Below the belt: Peloton says it wants to fight systemic racism. Yet Black employees at the company say they’re not being paid their fair share. (Insider)

Coffee meets IPO: A heaping of coffee brands are going public. A hot market is one reason why. (Modern Retail)

Dropping knowledge is what we do: Check out our Home for the Holidays hub from Retail Brew, sponsored by Square. It’s packed with articles we wrote to help retailers head into the holidays with confidence.*

*This is sponsored advertising content.

FRIEND OR FAUX?

Three of the stories below are real...and one is most definitely not. Can you spot the fake?

  1. Baskin-Robbins is bringing back its (in)famous turkey-shaped ice cream for Thanksgiving.
  2. Reese’s new Super King package is over a foot long.
  3. Yeti dropped a new thermos that can keep hot drinks at 120°F for up to a week.
  4. Burger King and Robinhood have teamed up to give away crypto.

Keep reading for the answer.

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FRIEND OR FAUX? ANSWER

Sorry, sorry. Yeti hasn’t come in that hot yet.

Written by Julia Gray, Katishi Maake, and Jeena Sharma

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