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Pickup Model
The pick-up model is one where customers collect their order from a store and should only be used to complement a Home Delivery. A pick-up only operation can initially appear attractive to the retailer. The main reason for this is that it removes the need to operate a vehicle fleet which is perceived as costly and time consuming. However, there are a number of problems with a pick-up only service, which are mainly centered on the likely customer behavior with this service.
Many customers will expect a delivery option from an eGrocery service and those who prefer pick-up will typically all seek to do so on their way home from work. This creates either long queues or capacity restrictions that limit the growth of the business as well as customer satisfaction. It also means that the return on capital employed is poor as the whole day is geared to one main Pick-up slot (5pm to 7pm).
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Left: a Pick-Up area for eGrocer Superquinn in Ireland. | Pick-Up ONLY limitations
• Reduces customer service options, and lets down customer expectations
• Reduces capacity and therefore limits growth potential
• Increases the number of stores needed to operate e-Grocery shopping
• Potential bottlenecks at pick-up time
• Under-utilizes resources
• Limits geographical reach, as you can deliver further than the average customer is prepared to travel to you and therefore reduces customer potential
• Increase initial capital expenditure as collection facility needs to be added to the store that includes storage capability for the 3 types of goods
• Difficult to defend against delivery competitors
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