Walgreens is rolling out Web Pickup service to all its Chicago area stores, a move experts say is evidence that the multichannel trend is finally gaining traction in the mass category. And in some locations, it says it will also offer curbside delivery, a strategy pioneered by casual dining chains.
"In the big-ticket category, stores like Sears, Best Buy, and Lowe's have certainly been doing this for a while," Neil Stern, senior partner at McMillanDoolittle, a retail consulting company, tells Marketing Daily. "What's different here is that it shows how this is migrating more and more to the mass market."
While many other retailers are experimenting with multichannel integration -- including Walmart, which announced an expanded version of its "Pick Up Today" service -- Walgreens is the first drug chain to offer such a service for general merchandise, Stern says.
A Walgreens spokesman tells Marketing Daily that it has been testing the service in select Chicago locations, as well as 27 stores in San Jose, Calif., and is now expanding it to all 480 stores in the Chicago region, marking its first full market rollout. So far, the store spokesman says, the top-selling categories for pickup have been baby's and children's items, with baby formula the No. 1 seller.
The Deerfield, Ill.-based retailer, which says that traffic to its Web site has grown 50% in the past two years, seems to be in a strong position to expand the program. "Walgreens has something like 7,000 locations," Stern says. "It sells a lot of food, and is a market leader in milk sales."
Stern says retailers' efforts are also likely to involve more and more experimentation with home delivery of mass items. Both Walmart and Amazon are currently testing home-delivery of groceries, including frozen and perishable items. (Walgreens says the chain is not currently considering home delivery.)
"Retailers have always been efficient at bringing pallets of goods in from their distribution center to the shelves, but what they call that 'last mile,' the way to get one bottle of ketchup into a consumer's home, is what's problematic and expensive," Stern says. "If e-commerce is 7% of retail sales," he says, "something like 0.2 to 0.5% is home delivery. It's still a very small fraction of online sales."