Walmart and Nordstrom Pilot Pickup-only Prototypes.
It has been a rough year for physical retail stores, to say the least. In 2019, there have already been 7,567 store closings, almost 2,000 more than all of 2018 combined. But as the focus of shopping has been increasingly shifting online, a new trend has skyrocketed to the forefront: the buy online, pickup in the store (BOPIS) model.
Retailers like Walmart and Target have found a lot of success with this model, and it continues to spread to other retailers like wildfire. According to an article in Retail Touchpoints, BOPIS orders account for 11% of eCommerce sales in 2019, nearly tripling from just 4% in 2017. Experts are now projecting BOPIS will account for some $35 billion in sales annually by 2020.
Now, Walmart and Nordstrom are taking BOPIS a step further by dropping the “store” from the equation.
Earlier this month, Walmart began piloting a pickup-only store just outside of Chicago in Lincolnwood, IL, in a space converted from an old Dominick’s grocery store. Walmart is testing a similar prototype location near their headquarters in Bentonville, Arkansas.
They are calling these prototypes Walmart Pickup Points, and they carry everything you’d find in a typical Walmart. But it’s a new concept for the megaretailer – a Walmart with no actual retail space.
Employees at the Walmart Pickup Point work alongside automated machinery that loads, unloads and sorts the items inside the facility. Customers order online or via the app and then pull into a pickup bay where Walmart employees bring them their orders, but the customers can’t enter the facility itself. According to the Chicago Tribune, all orders must be at least $30, and there will be a flat $4.95 charge for pickup starting September 15th.
The 42,000 square foot location also serves as a strategically-located hub for Walmart’s rapidly growing delivery service, being just outside of Chicago. There is a $7.95-$9.95 fee for deliveries, based on the time of day.
Nordstrom began piloting a similar program in 2017 with Nordstrom Local. The retailer has three locations in Los Angeles and is planning on opening two more in New York City in September. These special locations offer online order pickup, returns and tailoring/alterations.
Nordstrom Local has benefits both the retailer and the customer. The locations are much smaller than the department stores, which results in big savings in high-rent locations like LA and New York. They also allow the customers to travel shorter distances to retrieve their merchandise and avoid the possible annoyances of sales associates and checkout lines. Both the retailer and the customer enjoy savings associated with home delivery, and the customer gets their items faster. It’s a win-win for all parties.
The company has been rewarded handsomely, so far, for their innovation. According to Nordstrom, customers who visit Nordstrom Local spend two-and-a-half times more on average than regular Nordstrom customers. They also tend to be younger and more frequent shoppers than non-Local customers. These are clearly very promising signs for the future of the program.
Retailers will, no doubt, be watching closely Nordstrom expands Nordstrom Local to the Big Apple and Walmart looks to get their Pickup Point program off the ground. If they are successful, we may be looking at a powerful emerging trend to combat the sky-high rent prices and low foot traffic issues that are plaguing physical retail stores.
What do you think about these BOPIS-only locations? Will we see more retailers adopt this kind of approach in the future? In which categories do you predict BOPIS will grow the most in the next 5 years? We’d love to hear what you think. Sound off on social media now and join the conversation.