Home Depot buy-online-pick-up-in-store area

Five ways to compete with Amazon’s delivery — fourth in a series

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Say what you will about Amazon — it delivers.

One-hour, two-hour, two-day, Prime, drones, Dash. You name it. How do other retailers go head-to-head with that

They don’t.

“That’s where Amazon has the huge edge over all these retailers, their logistics network. It’s massive and continually being updated. And they’re pouring money into it,” says Yory Wurmser, an eMarketer retail analyst who focuses on digital media and marketing.

But all is not lost. Not by a long shot. The better plan for retailers not named Amazon is to get creative with delivery and fulfillment. When you think about it, it’s relatively early in the game of getting online orders to customers. New models seem to emerge everyday — buy online, pickup in store; buy in store, delivery to home; ship from store; curbside pick up; bundle goods from a single location and save money on delivery.

This is all really just getting started.

“I don’t believe that we’re inevitably headed toward this future where we all have cardboard boxes stacking up at our front doors. It’s dystopian,” says Jaron Waldman, founder of Curbside, a Palo Alto, Calif., company that builds systems for retail pickup and delivery. “Shoppers are moving online, but that doesn’t mean that Amazon is the only winner in all that.”

Of course retailers competing with Amazon have to stay on top of their games when it comes to getting orders to customers quickly and cheaply. But they don’t necessarily have to match Amazon’s strategy of massive and many warehouses and mind-bending speed and automation.

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Retailers need to think differently about delivery

Both Wurmser and Waldman say the trick for retailers is to think different, as the old Apple ads used to say.

“The way they’re going to compete is to find really innovative ways to partner with other delivery companies to optimize where things are being sent from,” Wurmser says. “They have a store network.”

In other words, who needs massive warehouses when you have many little ones, in the form of stores, in and around neighborhoods throughout the country?

“I see a future where we will have stores where stores effectively need to double as fulfillment centers and evolve,” Waldman says. “The dominant pattern in the United States is people commute. Retailers have the locations, which are located along the streets on which we work and we live.”

So, does that mean retailers should deliver from their stores? Have customers order ahead and come in and pick up their goods? Be ready to run orders out to a customer’s car after they’ve ordered ahead?

Yes, experts say.

In fact, the creative fulfillment strategy best positioned to help retailers thrive in the world of Amazon is going to sound familiar to those who have been bombarded with the “omnichannel” message for years.

“Meet the customer where they want to be met,” says Waldman, whose Curbside runs orders out to consumers’ cars at CVS and dozens of other retailers. “I’m a big believer in that.”

Most retailers have spent decades building out a network of physical stores “right where people live” — and that can be a big advantage, he says.

“Now that you have store traffic clearly dropping quarter after quarter, it’s really, really important to connect those stores to online experiences,” Waldman says.

Harish Abbott, CEO of Symphony Commerce, a commerce and fulfillment platform, sees plenty of sense in that approach and using stores as e-commerce distribution centers.

Home Depot buy-online-pick-up-in-store area

“Maybe retailers that have large offline footprints have a tremendous advantage using them as supply centers to meet demand,” he says. “It’s about converting them and using them, not only for people to come in to shop, but also to serve the demand that is nearby, cost-effectively and fast.”

No doubt many retailers are working on creative fulfillment schemes and even more are talking about it. But Waldman wonders whether they are moving fast enough.

“Stores need to do more,” he says. “Fundamentally, the idea that you can live in the old world, where all the shoppers are walking in, finding what they need on the aisle, waiting in the checkout lines, taking it out, getting back in their cars and taking it home — that’s not reality.”

Delivery partners can be the way home

Wurmser says there are a number of ways to make that physical store/online shopping connection. There is traditional online ordering. You click and wait for the package to show up. This is where small stores can turn to partners, such as Uber or Postmates.

“Instead of rideshare,” he says, “have a package-sharing-type-thing.”

Curbside is trying that very idea, using UberRush and PostMates, Waldman says.

Then, of course, there is order online, pickup in store — known as BOPIS or BOPUS. The early reviews have been harsh, as retailers work to organize stores and train employees to work in buildings that are part retail outlet, part fulfillment center.

Wurmser, himself, says he once waited 15 minutes at a store for a package he ordered online. Waldman knows the drill and says it is definitely something retailers need to get nailed down if they’re going to offer buy-online-pickup-in-store as a viable alternative.

Jaron Waldman

Jaron Waldman

Too frequently, he says, it goes like this: You order ahead and go to the store. You wait in the customer service line. You get to the counter and the associate doesn’t know who you are or why you’re there. You explain. The associate goes to get your order.

“By that time,” Waldman says, “you could have gone to the shelf and gotten it yourself.”

Instead, with Curbside, he says, “we can notify an employee in the store that the customer is coming in to get their stuff.”

So, doing it right takes work — sure in the store, but online, too. Think of the creative forms of delivery as an in-store, online hybrid. Websites, and especially mobile sites and apps, will need to provide a high-quality experience for consumers who won’t tolerate clunky search or bulky payment systems when they’re on a mission to find something fast on a small screen, using a tiny keyboard.

Retailers need to be ready to communicate clearly and quickly with consumers to let them know how the process works. For curbside, where do they park? How long will they wait? For in-store, where do they go to pick up their order? Do they need a confirmation email?

And using stores as flexible fulfillment centers will require a new way of thinking for retail management. Are there certain types of products that consumers will want to have delivered and others they’re more likely to pickup in store? Are there categories of goods that shoppers are willing to wait a little longer for when it comes to delivery?

“I think you’re going to see curbside delivery take off for things like grocery, for things like drug store, for even big-box-type experiences,” Wurmser says.

He says driving up to the store on the way home from work has many of the advantages of ordering something from Amazon and forgetting about it until it arrives.

“If you could do something similar, where you do your grocery shopping, or you do your drug store shopping, or even if you do your back-to-school shopping and have it all there ready to pickup, I think that’s something that can compete with Amazon.”

Waldman, who of course is in the curbside pickup business, says the service can provide a powerful customer experience — one not available at Amazon. If he’s right, coming up with creative fulfillment options might be a way to build loyalty and encourage repeat visits.

“You get that moment of delight when someone comes out of the store and hands it to you through the window. There is that human connection,” he says. “Actually touching, feeling and seeing the goods — that is important. The immediacy, too. You’ll know before you place the order, when it’s going to be ready.”

No doubt, it’s different from finding a box on the stoop when you get home from work. And for some people, some times, it might be exactly the way to go.

Photo of Waldman courtesy of Curbside. Other photos by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.