There was a time when people thought getting food at McDonald's Corp (MCD) without leaving the car was the height of “what will they think of next?” innovation.
To which Target Corporation (TGT) today replies: hold my beer. Or more accurately: hold my pumpkin spice latte.
The retailer is going all in with its Pick Up and Drive-Up curbside service. Since 2017, Target has been rolling out the service which allows consumers to pick up merchandise they ordered online, including fresh and frozen groceries, and Starbucks coffee, outside of stores.
Target
Shoppers Can Drive Up and Drop Off Returns
But Target recently upped the ante: by the end of this summer, shoppers across the country can drop off returns from their vehicles.
“This is what it means to be a truly omnichannel retailer, giving our guests the flexibility, ease and convenience to shop the way that works best for them and scaling capabilities across every facet of our business,” Target chief operating officer John Mulligan recently told investors. “Online, in-store, Drive-Up, it doesn't matter how they choose to shop with us. We're here to make their Target run better than ever.”
Of course, retailers would prefer you not return anything at all. Returns, especially online orders, are a big pain in the butt for both retailer and customer.
Shoppers have to pack and ship the item back to the retailer or wait an eternity at the customer service desk inside the store.
Retailers see their profit margins shrink because they not only lose the sale but must devote resources to process returns and dealing with fraud.
As e-commerce booms, so have returns, especially apparel. In 2022, returns will account for 16.5% of the $1.29 trillion in total online sales, according to a report from the National Retail Federation. That’s actually a sizable improvement from 2021 when the return rate was nearly 21%.
Returns are inevitable so Target might as well make the best of it, said Carol Spieckerman, president of Spieckerman Retail consulting.
Allowing drive through returns helps boost customer loyalty by making the shopping experience more convenient, she said. Target can also encourage those consumers to buy something else at the store with the credit they receive from returns.
“Not only is this a huge win for our guests who can now do even more at Drive-Up, but it brings more efficiency to our returns process, with more resale opportunities and fewer expenses for mail-in returns,” Mulligan said. “We're combining the strength of our digital self-service returns process with our Drive-Up experience to meet our guests where they are.”
