Shopping Centers Today

NOV 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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40 S C T / N O V E M B E R 2 0 1 8 online orders might be stretched so thin as to hurt customer service at the checkout line or somewhere else in the store. Or else workers could end up struggling to fulfill a rush of click-and-collect orders, leading to delays. Well aware of such challenges, top grocers and discounters are showing remarkable commitment and creativity in their efforts to overcome them, according to McKeska. He cites a raft of tech solutions at Walmart's newly remodeled store in Salem, N.H. At a grand-reopening ceremony there in August, Walmart announced a new system at the store to help with the speed and efficiency of click-and-collect order fulfillment. The so-called Alphabot system will use autonomous mobile carts to gather items from storage in the back of the store, elim- inating the need for employees to perform this manually. "When packaged, refrigerated and frozen items come in from the warehouse, they end up in totes based upon the existing online click-and-collect orders," said McKeska. "All [that] the employees have to do is pick the fresh items, assemble the orders and then take them to the pickup areas." Customers who want to stay in their cars will be able to have orders brought to the canopied parking spaces just outside the 20,000-square-foot expansion in which Alphabot is to be housed, Walmart said in a press release. But the retailer intends to offer in-store pickup at the Salem site as well, by means of pickup towers; employees will load these 16-foot-high, vending-machine-like towers, with the orders placed on Walmart.com. For pickup, customers will simply scan in bar codes sent to their smartphones. At press time Walmart had cited plans to roll out about 700 of the towers by year-end. "The approach that Walmart is testing at this Salem store is impressive," McKeska said. "It will be interesting to see if they roll it out elsewhere. This could presage the format of the future." Other elements include an automated shelf-scanner designed to sound the alert about low stock levels, incorrect prices or missing labels, according to Walmart. A conveyer and scanner system will automatically sort items as they come off the trucks, and workers equipped with cellular devices and Bluetooth printers will do checkout and provide receipts. But is all of this innovation translating into big changes in the way typical shopping centers operate? Not so far, argues Sanford D. Sigal, president and CEO of Woodland Hills, Calif.–based NewMark Merrill Cos., which owns and/or manages 70 retail properties throughout California, Colorado and Illinois. In recent months, the CEO says, more retailers have asked NewMark Merrill to set aside parking spaces for click-and-collect orders. But these spaces — usu- ally two to four at any given property — are rarely filled, at least not for now, Sigal says. "We're not seeing an incredible level of demand," he said. "But that's OK — this is a feature like a drive-through window at a pharmacy, or a swimming pool at a gym: It's an amenity that says, 'Hey, consumers, we're open to reaching you in any number of different ways.' " Rewriting a few lease clauses to allow for parking-lot pickup spaces creates no major headaches for landlords, says Sigal. Indeed, he lauds grocers and discounters for their eagerness to compete with Amazon.com and position themselves for the future. "Unlike other cycles, where big companies missed the ball — and, certainly, in retail we had companies where that happened — they're doing the right thing," Sigal said. "They're being ultra-responsive to what they see as trends." According to Greaner, chances are slim that the majority of customers will always use channels like click-and-collect and online delivery. "I don't believe 100 percent of consum- ers will use click-and-collect, but it will not be 1 percent either," she said. "It's likely that it could settle out between 20 [and] 30 percent, but time will tell. The point is to cap- ture that percentage, whatever it ends up being, by making that convenience available to people." And when it comes to those different channels, click- and-collect certainly offers some advantages for retail- ers, says Conwell. For starters, these programs hinge on shoppers, rather than retailers, shouldering the costs of the so-called last mile of product distribution. "The most expensive piece of that whole delivery chain from ware- house to consumer is that last leg," Conwell said. "So retail- ers have strong motivation to offer an engaging and com- pelling in-store pickup option." Moreover, shoppers like being able to pick up an online order at the store and then return select items on the spot, Conwell says. Not only does this save shoppers' time, but it also lowers retailers' shipping costs, he says. "They don't have to pay for that initial outbound shipping of the item or for the return," said Conwell. "Returns are a mushrooming chal- lenge for the industry, but they can also be an opportunity." Retailers will continue to experiment in a bid to find the most-competitive approaches to click-and-collect. Though demand for the service might not be massive just yet, its popularity is growing rapidly, observers maintain. An increasing number of retailers see a significant share of online sales driving customers to the physical store. "It is fascinating to watch the evolution of this space," Conwell said. "We see more and more innovation on the part of retailers — both grocery and nongrocery — to offer this service and make it easier. They wouldn't be doing it if they didn't see good evidence that consumers want to adopt it." Q All [that] the employees have to do is pick the fresh items, assemble the orders and then take them to the pickup areas

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