Through generations and countless iterations of retailing formats, one constant has remained in the buying habits of the American consumer: they want it now.
And never was that proven more dramatically than this past holiday shopping season.
Instant gratification is the holy grail of the conspicuous consumption that has driven the retailing business almost since its modern inception more than a century ago. From the classic self-service supermarket to the most modern Amazon Go store, the ability for customers to get their purchases quickly and effortlessly – frictionless in today’s speak – has been the cornerstone of successful retailers. Conversely, those selling concepts that removed instant gratification from the equation have had their struggles. Look back at the old catalog showroom model that crashed and burned largely because of the convoluted purchasing process.
This dynamic has also been the Achilles’ Heel of the most radical new format in retailing history: e-commerce. From its initial three-to-five working days to second-day delivery to overnight to even limited two-hour service, online sellers have constantly fine-tuned the time it takes to get a purchase into a consumer’s hands. But it’s still not been enough, which is why one of the biggest takeaways from Christmas 2019 — and perhaps the most significant retailing story of 2019 — will be the trend towards speed of fulfillment.
Why Fast Fulfillment is the Key for 2019
We’ve already begun to see this happening in the marketplace but the results of this past Christmas season will most certainly speed up the process. Watch for these developments over the next 12 months:
- It may have one of the most awkward acronyms in American business today, but there is nothing stilted about the impact of BOPIS: the buy-online, pick-up in store process is having its retailing year. Adobe Analytics says BOPIS purchases increased 47 percent in the period from November 1 through mid-December, and 2018 research reports indicated that nearly half of all retailers offered the service. A new study says 90 percent will have it within two years. Retailers like Best Buy and Lowes are already getting major portions of their online sales picked up in their stores.
- Amazon is said to be looking at a significant expansion of its physical Whole Foods operation, no doubt to advance its quick delivery capabilities that it is taking on directly rather than through former third-party Instacart. Of extra significance is that these new stores will reportedly be larger than existing Whole Foods locations, better able to serve as pick-up locations for Amazon purchases.
- Walmart and Target went to considerable lengths over the back half of 2018 to boost their rapid fulfillment services. Walmart TV commercials played up their BOPIS capabilities in groceries while Target’s purchase of delivery service SHIPT a year ago is increasingly becoming a cornerstone of its e-commerce strategy. It is now available in all major markets for the discounter versus just 70 a year ago.
- Clearly, the direct-to-consumer segment found out the hard way they needed physical spaces as both showrooms and purchasing points. This is why startups – from Warby Parker to Casper – have all committed themselves to real-store networks.
- Other physical retailers from Best Buy to IKEA are all working to increase their fast fulfillment services as they increasingly see it as their key point of differentiation from mostly pure-play onliners like Amazon.
- ” And the need to have pick-up points is why we’re no doubt going to see other e-commerce startups, from Wayfair to Everlane to Glossier, move from the testing stage to the full-fledged roll-outs of physical locations.
In 2019, all of these developments are going to accelerate and amalgamate for one very simple reason, perhaps best said by Hubert Joly, CEO of Best Buy – one of the physical retailers that was predicted to be put out of business by e-commerce. “Stores,” he said in a recent interview, “are a wonderful asset.”