A Target store in Culver City, California.
Mark Ralston | AFP | Getty Images
It was a Christmas for procrastinators.
Target CEO Brian Cornell said one of the biggest trends he spotted this holiday season was the fact that more shoppers were “comfortable shopping later in the season.” Overall U.S. retail sales were also stronger in December, thanks to more people putting off their shopping.
With that, more consumers turned to stores to pick up their last-minute online purchases instead of waiting on packages to arrive in the mail.
On Dec. 24, for example, Cornell said Target prepared nearly five times the number of products for curbside pickup of e-commerce orders compared with a year ago. Overall, Target’s holiday sales underwhelmed. But the company said purchases from customers opting to use either a buy online pick up in store option, curbside pickup or same-day delivery this November and December were up more than 50%.
What Target spotted speaks to a bigger trend in retail that is still in its infancy: The rise of people buying items online and choosing to pick them up at a bricks-and-mortar store.
As digital sales in the U.S. are surging, companies are looking for ways to make those orders more profitable. One way is to reduce what retailers need to spend on shipping and transportation. Even Walmart‘s e-commerce business is still losing money. If a retailer can convince a customer to drive to the store to retrieve what he or she bought online, that order becomes more profitable.
Overall online sales this holiday season were up 14.6%, slightly better than expected, according to the National Retail Federation.
This holiday season, “how our customers shopped changed pretty dramatically,” Nordstrom co-president Erik Nordstrom said at NRF’s annual Big Show in New York earlier this week.
“We saw a significant step change in that activity … and so to be able to engage customers across these different touch points changed a lot,” he went on, mentioning more shoppers buying goods online and picking them up at Nordstrom stores.
Nordstrom, like Target, is seen as an early adopter of this service.
It has been opening more of its pint-sized Local stores, which don’t actually hold any inventory but instead are meant to serve as hubs in cities like New York and Los Angeles for customers to pick up digital orders and make returns.
Meanwhile, for consumers, buying online and picking up in stores can be viewed as a sustainable choice, as more people are thinking green when they shop.
“You are potentially saving … 500 air miles or more … if you are going into a store and picking these [orders] up,” Mark Mathews, NRF’s vice president of Research Development and Industry Analysis, said at the Big Show earlier this week. “And I think the onus is on retailers to help you know that if you are buying online and coming in the store, you are potentially … making a small, small contribution to helping save our climate.”
“This is a win-win for retailers,” Matthews added. “Because we know that if you’re going into the store to pick something up, you might well be buying something else.”
A report ahead of the holiday season by The NPD Group had said that 25% of online shoppers planned to use their smartphones during the holidays to shop. And those people are more likely than those who use other devices, like a laptop, to buy online and pick up in a store, the study said.