The hybrid marketplace offers tangible and potent options for customers who desire instant gratification from local retail outlets.
There’s a famous “Seinfeld” bit where he is standing at a car rental counter and the rental agent has just told him that they don’t have a car for him, even though he has a reservation. “The problem is,” quips the comedian, “that you know how to take the reservation. You just don’t know how to hold the reservation. And that’s really the most important part of the reservation.”
The new hybrid shopping model potentially holds the same room for bungling orders as illustrated by the “Seinfeld” reservation sketch. But with some planning and forethought the new model is full of opportunity for businesses to embrace.
As the pandemic shutdowns struck in March 2020, many businesses found themselves flat-footed with nothing to do but shut their doors. Businesses that had already embraced selling to customers — both in-store and online — could still count on revenue from their online stores. But most models called for revenue to flow through their doors as well as their portals.
The easing of the pandemic did little to change the minds of customers queasy about the lurking dangers of the invisible foe. Remember how customers felt nine months into the pandemic? A December 2020 survey by in-store experience platform Raydiant found that when asked if a successful vaccine would make them shop in-person more, respondents said no (28%) or that they didn’t know (22%). The survey results, if accurate, could mean that half of the entire market might not fully return to in-person shopping.
However, that was now more than two years ago with no official vaccine rollout. Things have changed, clearly. As my colleague Scott Clark reported last November, How Has Pandemic Thinking Affected VoC?, 64% of shoppers interviewed by product-review company Bazaarvoice said that the new hybrid model was their primary way of shopping and had been for the past six months.
A New Hybrid Market Emerges
The pandemic simply gave birth to a new kind of marketplace. As stores and businesses started to reopen, a new kind of commerce kicked up its heels, a hybrid model where customers placed an order online and then drove to the store to collect their purchases, either by entering the store (in-store pickup) or by having them delivered to their car (curbside pickup).
Outdoor retailer REI was one such company that saw opportunity in curbside retail. Company leaders felt more people were turning to nature for their physical and mental well-being, and the company wanted to be there to serve them. In May 2020, just two months after closure mandates, CEO Eric Artz announced that half of REI’s 179 stores would offer curbside pickup.
REI spokesperson Megan Behrbaum said that the curbside transition required many changes beyond necessary modifications to their technology. “We had to train retail teams and work with landlords and local health officials at every location,” she said.
It was worth all the effort, though, because REI is still offering curbside pickup and has even expanded it to almost all of its stores.
UK-based Vodafone with over 15,000 stores globally revealed in its Fit for the Future Report that 75% of businesses said their customers expect to be able to interact with them anytime and anywhere via digital devices.
The hybrid model is a best-of-both-worlds model for consumers as well as businesses. Consumers get the convenience of online shopping and the instant gratification of getting the purchased merchandise within hours instead of overnight. Plus, the new hybrid model most often avoids shipping charges and delays and foils the work of porch pirates. Businesses are glad to serve the new hybrid customer base as it keeps the cash flowing and gets foot traffic at least close to their doors.
But, what changes did businesses have to make to cater to this new model? It depended on the business and how connected its systems already were. For all of them, it was a combination of technology interfacing with human processes.
Lauren Tillman, director of omnichannel operations for home décor superstore At Home, had a lot to consider for the chain’s 250 stores in 40 states. The company rolled out curbside pickup at a few test locations first to ensure that the process was in place and documented. “The biggest hurdle was ensuring that all the technical components were functioning properly and that the customer experience was intuitive and easy to use,” she said.
One technical hurdle At Home faced was building notification functionality to support curbside pickup into its order management system (OMS). At Home found that its OMS platform, Manhattan Active Omni, had already built the functionality as part of the base code, so the IT team was able to quickly deploy notifications. From there, the company built pages on its site to identify where the customer was parked in the parking lot.
While the use of curbside has declined somewhat as the pandemic has eased, At Home has continued to offer the service.
Related Article: How to Create Better Hybrid Retail Customer Experiences
From Purchase to Pickup: A Tale of Two Hybrid Paths
Let’s walk through a typical hybrid marketplace purchase to see what special elements need to be deployed and considered.
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The Purchase. It all starts off pretty normally. A user comes to the website and selects an item they want to purchase. But, that’s where things start to get hairy. If they want to pick up their purchase at the store — either through delivery to their car or in-store pickup — the website has to allow them to select their local store and its inventory. Many big-box stores like Target already had in-store pickup baked into their websites, which gave them an advantage. Businesses that had not yet fully integrated their inventory management systems with their websites had a tougher and potentially more expensive row to hoe to be able to meet this new demand. The bottom line is the ability to display inventory availability accurately on retail websites is a must-have ecommerce feature for the hybrid shopping experience.
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Order Routing. The order placed online needs to be routed to the correct location. Companies that had deployed ecommerce might have set up a centralized order processing facility. Changing this routing may or may not be simple. However, companies that have a firewall between their online and in-store entities may also need to clear some internal political hurdles. If a product is ordered online but delivered via brick-and-mortar, who gets credit for that sale?
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Local Fulfillment Processes for Curbside. When the order arrives at the customer’s local store, the need for a fulfillment process kicks in. This is a fancy way of saying companies need to assign employees to pick products from inventory, keep track of the merchandise until the customers arrive, and, like a drive-through waiter from bygone days, deliver it to their cars. These are not trivial matters for big risk-averse companies that face huge losses to fraud every year. According to PwC’s annual report of Crime and Fraud (2020) nearly half of reported incidents of fraud were committed by insiders. It’s easy to see why employees running out the door with merchandise could be considered a red flag. A secure location within the store that conforms to whatever security policies exist needs to be assigned as a holding cell for merchandise. Depending on the value of the merchandise and the policies of the store, this will likely require its own supervision.
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Messaging and Expectation-Setting. Customers have high expectations of the stores they use and messaging is a key element to set those expectations. Once the order is placed, a message must be sent to the customer to let them know when they can expect their order to be ready. Then, once the order is ready, another message must be sent saying their order is ready for pickup. These two messages align closely with the online-ordering paradigm and any business already offering in-store pickup probably has these in place. But the hybrid marketplace has another communication that needs to work flawlessly. It’s fundamentally different from the first two and it takes place at the next phase in the process.
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Customer Arrives for Pickup. For curbside, once customers have arrived to collect their merchandise, they need to know how to let the store know they are waiting outside. This is an incoming message at a crucial stage in the customer experience. These messages need to be monitored vigilantly and acted upon quickly. One way stores can set this up is to provide a link within one of the earlier-sent messages for the customer to click when they arrive for pickup. And once the link is clicked, it’s time for action. Additionally, when customers arrive to collect their purchases, on-site signage needs to direct them to parking spots that have been similarly labeled and reserved for their convenience. Such signage should look professionally produced for the best customer perception. The system should also be flexible and allow customers to change their minds and decide to pickup in-store rather than through curbside delivery. In-store pickup while slightly simpler should also embrace the same messaging and quick responses and delivery as well as professional signage.
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How’d We Do? Once the purchases are successfully delivered to the customer, smart retailers should build stronger relationships by deploying a post-purchase survey message to collect data and optimize the process.
It’s important to keep in mind that all of this has occurred within a matter of hours, or less, so the system has to work smoothly and efficiently.
Related Article: 1 Trip to the Mall, 2 Hybrid Customer Experiences
Where Does Hybrid Go From Here?
Some retailers have tried to recoup some of the expense of the system by charging customers a fee for curbside pickup. Reporting for RetailWire.com, Tom Ryan points to about a dozen retailers, mostly grocery stores, with policies in place to charge a curbside fee.
Speaking on the podcast “Retail Transformation Show,” Nikki Baird, vice president of strategy for retail technology company Aptos, said that she does not see these transactions going away. Instead, she sees a lot of interest from clients in turning that quick customer experience into more benefits for the store.
“It’s a balance between making it too easy for customers and making it an opportunity to engage with that customer and drive additional benefits, either brand benefits from the experience or add-on sales.” she said on the podcast.
Amazon jarred the retail world in 2005 with the birth of Prime’s free, two-day delivery. They have increased pressure on brick-and-mortar stores since then, offering overnight and even same-day delivery in certain markets and for certain products.
The hybrid marketplace offers a very tangible and potent option for customers who desire instant gratification but prefer local retail outlets over Amazon. What’s more, investing in the technologies and human resources to make hybrid succeed is one way that retail stores can dig themselves out of the pandemic slump and position themselves to more aptly compete and provide customers with the kind of retail experiences they crave.
And with diligence and effort, the businesses that embrace the new hybrid opportunities won’t be re-enacting the Seinfeld reservation scenario when they take orders and deliver what customers want with skill and efficiency.
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