The latest blend of traditional retailing and online commerce is starting to appear in the Eugene-Springfield area.
Online shopping long has allowed shoppers to order products via the Internet for shipment to their homes in a few days. But some retailers now are offering consumers the choice of ordering items online and picking them up on the same day at local stores.
Fred Meyer, for example, on Nov. 3 started allowing online shoppers to order groceries and pick them up the next day at its store in the Santa Clara area of north Eugene. On Thursday, Fred Meyer modified the service, which it calls “ClickList,” so that shoppers can order things online and pick them up at the store later the same day.
“It’s convenience for our customer,” said Scott Arellano Paudois, the store’s ClickList manager. “It’s all about making their lives easier for them, and making them highly satisfied to come here.”
After Fred Meyer shoppers make their online selections, store employees pull the items from shelves, refrigerators and freezers and keep them in a separate area until they are taken to customers’ cars.
When they place their orders, customers select a time to pick up their items.
Customers park their cars outside the store and, within minutes, a store employee has taken payment and loaded groceries into their vehicles.
The Santa Clara Fred Meyer was the first company store in Lane County to offer the service.
Customers get their first three orders filled for free, but have to pay $4.95 per order thereafter.
Offering the service for a grocery retailer is not cheap.
It costs Fred Meyer about $285,000 to equip each store with the freezers and refrigerators, handheld scanning devices to select items and other equipment, company spokesman Zach Stratton said.
Personnel costs are even more expensive. Each store must hire employees to fill the online orders, he said.
The Santa Clara Fred Meyer, for example has 15 employees, many of them part time, to handle the e-commerce duties.
Other Eugene-Springfield area retailers are embracing the latest change in online shopping, including J.C. Penney, which started same-day ordering and pickup in March.
A few smaller, locally owned merchants beat the big retailers to the punch, such as Eugene Toy & Hobby, which began offering the same-day order and pickup option two years ago.
Online competition
Customer convenience is cited by retailers as the motivation for making online shopping more expedient.
However, some observers say that traditional stores hope their multiple outlets can help them compete against other retailers with similar plans, plus prevent the loss of more market share to the king of online retailing, Amazon.com.
Seattle-based Amazon, with $107 billion in sales in 2015, has stared experimenting with its own stores in select markets, and it’s also opening pickup centers where shoppers can fetch their Web purchases.
In downtown Seattle, Amazon is testing a grocery store where customers can select and buy food through an app, without having to go through a cash register line.
In October, Google announced that Eugene-Springfield area shoppers could use the Google Express website or mobile app to make online purchases of nonperishable items from such retailers as Costco, Kohl’s, Walgreens and Whole Foods Market, and have them shipped to their doors by a delivery service for an annual $95 membership fee or for $4.99 per order.
Dr. Tim Veach
Tim Veach, an associate professor of business at Northwest Christian University, said it’s no surprise that long-established brick-and-mortar stores are attempting to use technology to reach consumers, particularly tech-savvy young adults who spend more as they reach their mid-30s and beyond.
“If someone is of the millennial generation, they see online shopping as a standard format,” he said. “Millennials think this is the way shopping should happen, and they will shop at the store.”
Walmart, the world’s largest retailer, offers same-day online pickup at its stores for general merchandise, and it’s starting to implement the service for grocery sales in certain markets. So far in Oregon, Walmart is offering same-day grocery pickup in Portland and Salem stores.
“It’s increasingly common for the big retail chains to use their stores to differentiate their stores from Amazon,” said Don Davis, the editor-in-chief of Internet Retailer magazine.
Citing an analysis by Morgan Stanley, Davis said online grocery sales this year are expected to increase 157 percent and account for 6 percent of total grocery sales.
Grocery chains, which have been slow to move online, are expanding their e-commerce capabilities, Davis said. More stores are offering in-store pickup or home delivery of online orders, often partnering with delivery services.
With 2015 grocery sales in the United States of about $690 billion, there’s plenty of potential for electronic commerce in the grocery business, according to Internet Retailer.
But it’s unclear if buying groceries online will become as popular as buying other types of merchandise through desktops or mobile devices, Davis said.
“It remains to be seen whether a large number of consumers will make the shift,” he said.
Service expanding
Fred Meyer launched ClickList last year, first rolling out the service in Portland-area stores.
Today, 33 out of 133 Fred Meyer stores allow same-day ordering and pickup, Stratton said. The company’s West 11th outlet will begin offering the service next fall, after a major remodel, he said.
Erick Schmidt, the manager of the J.C. Penney Store in Eugene’s Valley River Center, said this is the first holiday shopping season that J.C. Penney will have buy online/same-day pick-up at all of its stores.
So far, about five customers a day are picking up same-day orders at the Eugene store, he said.
“Think of it as your own personal shopper. You go online to select your items, your method of payment, and we will have your items ready for you to pick up within two to four hours,” he said. “When I think of same-day pickup, it is the convenience of not having to search for the items in the store, and having someone else do the searching for you.”
Eugene Toy & Hobby in downtown Eugene has had an online presence since 1999, starting with a webpage that shared basic information about the store.
In September 2014, the business activated its online store that allows shoppers to buy items and have them delivered to their homes, or they can stop at the store and pick them up later that day.
Co-owner Mark Agerter said the store’s website, which can be used with a smart phone as well as a desktop computer, attracts about 350 different visitors a day.
“The website is being used in a lot of ways that I had not envisioned,” he said.
Some visit the site to see if the store has items in stock, particularly people who live outside Eugene, Agerter said.
Others use the site to check prices, he said. “And youth, they don’t do anything if they can’t do it on their phone,” he said.
The online business is helping Eugene Toy & Hobby compete against big-box merchants and other competitors, Agerter said.
E-commerce is “becoming a rather significant part of our business, and it seems to be growing all the time and allowing us to grow,” he said.
Customer advantages
On a recent afternoon, Brytani Weber of Eugene drove to the Santa Clara Fred Meyer and bought $85 worth of groceries within a few minutes. And she didn’t have to get out of her Honda Pilot, either, which she had parked in one of one of eight spaces reserved for ClickList customers outside the store.
Weber, a mother of three young children, said a friend in New Mexico told her that Walmart provided online ordering and same-day pickup in that state, so she checked to see which grocers in Eugene-Springfield did the same.
“I was excited about it because I have three kids, and it’s hard to do grocery shopping and focus on what I am getting when I am trying to help them and keep track of them,” Weber said.
Fred Meyer declined to say how many customers are shopping online at the store.
“We’ve only been open a month now, and we’ve increased dramatically from the first week,” said Arellano Paudois, the store’s ClickList manager.
Fred Meyer executives don’t think e-commerce will overtake traditional shopping anytime soon, said Stratton, the company spokesman.
“I don’t think this is our way to moving to a strictly digital future,” he said. “It’s basically one more way to add to the convenience of customers, such as the mom with four kids who can swing by, pick up groceries and save an hour shopping. There still will be people coming into the store three times a week.”
Barbara Shoemaker, who was shopping at the Fred Meyer store in Santa Clara, said she won’t select her groceries online. The retired secretary said she enjoys the social aspect of shopping, including talking with clerks at the register.
“I don’t even like the self serve (checkout),” she said. “I like greeting a person. We are getting so mechanical in the world. I’m not a big shopper, but I prefer human contact.”
Source: Shop online: Eugene-Springfield area retailers expand same-day service for online shoppers as published in The Register-Guard Dec. 11 2016.