How A Drive-Thru Could Turn Showrooming Into Roadkill
Todd Michaud spent years leading retail technology teams for Dunkin' Donuts and Baskin-Robbins and today serves as the VP of IT for a billion-dollar franchise restaurant company. He also runs Power Thinking Media, which helps restaurants and retailers with social and mobile challenges.
The whole concept of showrooming bothers me. I keep thinking about how retailers need to turn their retail locations into a strategic asset, rather than a burden. There is no reason retail organizations cannot duplicate (or even improve upon) the online purchase experience of their E-tailer counterparts. If traditional retailers really want to win the war against their online counterparts, I think they need to shift the battlefield from price to convenience. And nothing says "convenience" like "drive-thru," am I right?
Leveraging brick-and-mortar stores to deliver items ordered online fast and conveniently is the biggest advantage traditional retailers have over their online competition. And yet legacy software decisions and siloed business structures are preventing most retailers from leveraging these assets. Drive-thru retailing is not new. Sure there are examples of where grocery store chains have tried this and failed. But buying fruits and vegetables picked out by someone else is a tough gap to cover. And yes, Sears tried this approach a few years ago with a drive-thru-only location that wasn't the breakthrough the chain had hoped.
But hear me out. It wasn't until just recently that I felt this concept was really ready for prime time. There is a convergence of technologies that will drive the success of the next ventures in retail drive-thru: merged-channel retailing (any product via any channel), smartphone adoption by customers and the growth of mobile transactions, the ease of online transaction processing (one-click ordering), and the application of software tools for pick/pack (from the warehouse) and task management.
The fact is, I buy a lot of things from Amazon. I have three young kids, and it's a hassle to drag them through my favorite places to shop without at least one having some sort of meltdown. On the other hand, Amazon makes it frictionless to buy something. The only problem is that I have to wait two days to get it, which really sucks.
After picking up the kids from school one day when my wife was out of town, I tried to come up with a plan for dinner. Although I am not exactly a whiz in the kitchen, I also dreaded the idea of managing all three kids in a restaurant on my own (one man does not a zone defense make). I decided to use my phone to order pizzas from California Pizza Kitchen and get them delivered to curbside, so I wouldn't have to unbuckle the little angels when we picked up our food.
It struck me there are plenty of other retail opportunities just like this one. How, if I could order products online or via mobile and pick them up in "real-time," then it would dramatically increase the likelihood of my shopping there simply because of the "kid barrier" that it removes.Once retailers figure out the problem of ordering online and picking up in-store, their absolute next priority needs to be figuring out how to build a drive-thru. I should be able to purchase items and pick them up the same day without having to wake up my sleeping one-year-old in the car. For me, it solves the "shop now, get it now" craving that most of us have. And for retailers, it turns their retail outlets into a competitive advantage over online retailers. It also heavily plays toward men, who in many cases would rather skip the entire "shopping" experience.
Look, I'm not trying to oversimplify the complexity of solving merged-channel issues. For many retailers, this solution means a significant overhaul in technology, supply chain and core business processes. It is something that is certainly not done overnight and, in many cases, probably requires millions of dollars in software overhauls. But I am saying that solving those issues turns the table on Amazon and other online retailers. I can imagine the pricetags that read: "Have it today for $100 or have it in 2 days for $97."
Instead of brick-and-mortar retailers complaining about sales-tax disadvantages, online retailers will start complaining about shipping disadvantages. (Amazon is already using couriers for some deliveries. Would anyone be surprised if it bought one of the major shipping companies? Or what if Amazon purchased a big-box retailer simply to gut the stores and use them as outlets for its own wares?)
But what about all of those lost sales from purchases not made by people wandering the aisles and seeing those killer merchandizing displays? Maybe we should ask some of the gas station jobbers how their worlds changed with the introduction of pay-at-the-pump?
I remember when gas stations first started to put in credit-card readers at the pump and thinking, "How many people are really that lazy that they won't walk inside the store?" I thought it was a silly idea. Now, all these years later, in those rare occasions when I am stuck at some backwoods location that doesn't offer pay-at-the-pump, I find myself wondering how people in the area get by or how that station stays in business.
The reality is those gas stations found themselves in a battle to compete on convenience and had no option but to follow suit. The soccer moms (or dads) were not going to even have a chance to see those wonderful merchandizing displays if they went down the street to pay at the pump.
And just like restaurant chains that adopted the drive-thru model, it didn't mean the end of people's in-restaurant visits. In many ways, it is an extension of the "take-out" model, just with an easier transaction for the consumer. In most cases, a restaurant with a drive-thru would have a higher customer count than a similar sized restaurant in a similar location. The assumption is that the drive-thru enabled the restaurant to capture additional customers.Okay. Let's say you tackle, and solve, your merged-channel issues (as a few already have). The next challenge is how to package the orders for pickup. Unlike curb-side pick up at a restaurant, which is fairly easy to implement (have the server walk food to the car instead of a table), retail orders might be larger (both in number of items and size of packages) and require trips to both the back-room and several parts of the store.
First, retailers can take a page out of restaurant online/mobile ordering solutions that enable the location to specify the minimum amount of time required before picking up the solution. This can be based upon the items purchased (a refrigerator might take a long time to get ready), the time of day (how many people on staff to fulfill the order) and the already existing queue (if there are already five orders in queue, push this one out a bit). And just like some restaurants have "drive-thru only" hours late at night, I think it would be feasible for retailers to specify drive-thru times for availability.
Second, the good news is that when it comes to managing the resources used to package these orders for drive-thru pickup, retailers likely already have something pretty close to what is needed in their warehouses. This would be very similar to picking and packing an E-Commerce order, using the retail outlet locations instead of warehouse storage areas and store associates instead of forklift drivers. It wouldn't be a long walk to leverage the same technology to optimize how to deploy labor in this model.
Many retailers are also using task management software to manage large-scale deployments throughout the retail environment. These tools could be easily configured to manage the deployment of labor for pick/pack tasks.
Finally, there would obviously be structural issues with the drive-thru scenario itself. Depending on the type of retailer, it may make sense to have a pass-thru section similar to the "brew-thru" liquor stores or a park-and-wait option like many Sears locations have today. You could even go as far as to ask customers what type of car they have, so you could look up the storage space of that vehicle to determine the best way to prepack the items for pick up. Or how about offering a "no wait" guarantee, where you take reservations for pick-up times that the "on-demand" folks don't have access to?
Although the drive-thru model might not be a fit for every concept (just like in the restaurant space), there is something to be said for using technology to turn those retail locations back into an advantage when it comes to the shopping experience.
What do you think? If you disagree (or even, heaven forbid, agree), please comment below or send me a private message. Or check out the Twitter discussion on @todd_michaud.