Target, meanwhile, reported 212% growth in same-day pickup and delivery orders during the quarter that ended Jan. 30. Drive-up orders, where an employee brings items to the customer’s car, grew more than 500%, Target said.
Demand for same-day programs is highest when they’re free, like curbside pickup, but much lower when consumers have to pay, said Sucharita Kodali, a retail analyst at Forrester.
Only about 4% of U.S. consumers who purchased online groceries within the past month said they’d used a same-day delivery service, according to a March survey by Forrester.
Kodali said she expects growth rates for pickup and same-day delivery services to be only slightly higher than they were before the pandemic as consumers go back to more typical shopping behaviors. Particularly at retailers with lots of bricks-and-mortar stores, a traditional shopping trip can be less of a hassle than ordering online and waiting for a pickup or delivery window, she said.
Meanwhile, even with delivery fees, it’s tough for retailers to make money on two-hour home delivery, she said.
“The only type of company I’ve seen offer it at scale and make money doing it is in the pizza delivery space,” she said.
Fast same-day delivery is more expensive for Walgreens than having shoppers pick up purchases at stores, but the company is betting it will help Walgreens keep convenience-focused customers who might otherwise have gone to a competitor, and get them to shop at Walgreens more often, Kruse said. The company’s roughly 9,000 U.S. stores put it in a position to get items to customers quickly, she said.