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What Led Target To Eliminate Curbside Pickup Offering?

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After a two-year “pilot” run, Target is nixing its partnership with the Curbside pickup app in mid-June. While retailers such as Nordstrom and Roche Bros. are working to expand curbside pickup offerings, Target will focus its efforts on the delivery and execution of retail fundamentals instead.

The question here is, why did Target make the decision to eliminate curbside pickup for customers, especially after the retailer had expanded the service to 121 stores from 21 stores in November 2015? One theory is that curbside pickup eliminates the opportunity for impulse sales in-store, which might be a significant source of sales for a big-box retailer such as Target. However, the retailer gave no indication about its decision, saying only that it had learned a lot from the pilot program.

The rise of on-demand delivery services such as Postmates, which delivers lunch, groceries, office supplies and everything in between, Uber-style, right to the user’s door, may also be a reason behind Target’s decision. Retailers such as American Apparel, Walgreens and Trader Joe’s have already partnered with Postmates’ new subscription delivery service.

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According to a statement, Target plans to devote its resources “towards enhancing its core of digital-stores offerings such as Cartwheel, Order Pickup and shopping online from stores.”

The Curbside partnership began in 10 stores throughout the San Francisco Bay area in 2014 as one of Target’s more significant omnichannel inventory strategies. Prior to that, Target had introduced buy online, pickup in-store, which resulted in a 30% increase in digital sales in Q2 2014.

Curbside may have lost a partner in Target, but the company still counts retailers such as CVS, Best Buy and Sephora as clients. According to the company, retailers using the app see an average of 30% new customers, with 61% of customers making repeat purchases. 

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