A few months ago, I posted about Chronodrive, a French retailer that allows customers to order groceries on-line then pick them up from a warehouse. Now the Chicago Tribune reports that some major retailers are experimenting with similar concepts here in the Midwest (Retailers testing out the drive-through lane, Mar 30). The firms include Sears Holding, Meijer, and Walmart — so we are talking about some serious retailing muscle.
According to the article, this is not the first time a Midwest retailer has toyed with drive though service. Montgomery Ward took a shot at this a few decades ago:
Retail expert Will Ander, also a partner at McMillan Doolittle, said general merchants have tried and failed in the past to figure out how to incorporate a drive-through. Ander was part of a team of merchants studying drive-through prospects at Montgomery Ward in the 1980s and 1990s. It didn’t work because there were too many products.
“The real challenge is, how do you fill a complex order?” Ander said. “You can’t have (clerks) running all over the store.”
So the main challenge is operational. How do you make sure that orders are ready when you say they are. The three chains trying this have taken three different approaches.
Sears has one MyGofer store in Joliet. They have followed the Chronodrive model and serve only drive through customers at this location. So the store is more accurately described as warehouse and it is optimized for picking orders. Meijer’s has two Grocery Express locations in Illinois. (They also have one in Ohio and another in Michigan.) They have carved out a specialized area within existing stores:
Meijer built a separate alcove with refrigerators, cash registers and sliding glass doors overlooking a small parking lot and dedicated up to six clerks to staff it.
To put that in perspective, Chronodrive is supposed to run an entire location with just 12 people. Presumably, Meijer’s drive though business can share guys on the receiving dock with the in-store business. I have to suspect, however, that Sears’ approach has to be more cost-effective over the long haul assuming that you can get enough business.
Walmart’s approach is a little different. They restrict what can be ordered for pick up at its Mount Prospect store. Looking at Walmart’s website, this service is very different from what MyGofer and Meijer is offering. In particular, they don’t do perishables and this is primarily — from the customer’s perspective — a way to avoid shipping costs for web orders. (REI’s website has a similar offer.) This was initially launched over the Christmas shopping season. And it is not clear why going to Walmart the week before Christmas would count as an increase in convenience. (To quote a commentator on Marketplace “It’s like sending things to Mecca during the Hajj.”)
So I find this an intriguing service. It is something I would try if there were a location near my house. It will be interesting to see which model wins. As I said above, the warehouse model has got to be more cost-effective and firms like Costco have shown that customers will travel some distance for a deal. Meijer’s model, on the other hand, has got a lower start-up cost and would be more appropriate if there is a limited general appeal to the model. The biggest challenge in rolling out Meijer’s model may well be available store and parking lot space in current locations.