Why is Target Dropping Curbside Pickup?

In their never-ending quest to make the store shopping experience as seamless and painless as possible, an increasing number of retailers are offering variants of curbside pickup.



This simply means consumers can order goods online and then have the items delivered to their car as they wait, usually within five to 10 minutes. Some retailers accept payment ahead of time, while others execute the transaction on the spot with a mobile POS device.



Whatever the specifics, curbside pickup programs let consumers obtain the convenience of immediate, store-level access to goods without having to actually enter the store. It would seem to be the ultimate in combining the best of the brick-and-mortar and digital experiences.



Yet Target is ending its pilot of curbside pickup, in conjunction with the third-party Curbside service, at more than 100 stores. Why would Target decide to end its foray into a service that major chains including Walmart, CVS and BJ’s Wholesale Club are still actively exploring? The retailer isn’t saying much, but here are a few thoughts.



First, while curbside pickup is convenient for consumers, it is not as beneficial to retailers. Successfully executing curbside pickup may require dedicating areas of the parking lot and/or store entrance, which could disrupt the flow of traffic to and from the store. It also requires store associates to go outside and complete transactions. Each individual trip to a customer’s vehicle may only take a minute or two, but those minutes can add up if the service is popular.



Also keep in mind one of the advantages of buy online pickup in store (BOPIS) programs offer is that they draw digital customers into the store. This opens a whole new world of possibilities for ancillary sales, impulse buys, personalized offers, etc., that curbside pickup does not. Keep in mind Target offers a separate BOPIS program it is maintaining.



Another potential drawback of Target’s curbside pickup program is that it involved a third-party partner. While third-party specialists can offer a great deal of expertise and simplify the management of programs like curbside pickup, they inevitably eat into profits.



If Target is already making decent income from its proprietary BOPIS program, it may have decided that giving up a share of curbside dollars isn’t worth it. The company may have even seen the Curbside partnership as cannibalizing its BOPIS sales.



I will also take the opportunity to eat a little crow with a final observation. Back in 2013, I criticized Target for what I saw as flawed execution of its Cartwheel mobile app. Cartwheel lets customers collect and redeem digital and social coupons in-store, using their mobile phones. Boy was I wrong. Cartwheel has been an unqualified success, with more than $500 million worth of coupons redeemed to date.



Cartwheel is another digital means for Target to bring customers into the store and build a positive omnichannel shopping experience. The retailer may well have decided it would rather devote more time and resources to Cartwheel, and also not potentially blunt its impact with a curbside offering.



The industry should keep a close eye on curbside pilots in the coming months, especially those involving a third-party partner. The real question is whether the curbside pickup model is uniquely unsuited to Target, or if it has deeper fundamental flaws.