As merchants continue to shift their business models and add contactless experiences to meet the changing demands of the COVID-19 era, ‘click and collect’ or online ‘Order for Pickup’ has not only become widely available but increasingly more popular.
This change in consumer behavior has led to a historic rise in online Order for Pickup orders, with many trying it for the first time. From March through May alone, ‘click and collect’ order volume was up 202%, with almost 30% of all orders being driven by consumers who are new to using Order for Pickup services or “first-timers”.
In this blog, we take a look at data, from Rakuten Intelligence, to help businesses understand who are the first-time online Order for Pickup customers in the COVID-19 era and how the demographics of the ‘click and collect’ customer are evolving so they can plan accordingly.
And for our purposes, we define a “first-time customer” as anyone who had not placed an online Order for Pickup order during the tracked time period, which began January 2018, based on Rakuten Intelligence data. The data is through June 30, 2020.
Usually, merchants can rely on the Holiday season for the biggest influx of new Order for Pickup customers because it offers convenience and time savings to consumers who might need a last-minute purchase or don’t want to deal with the crowds.
However, buying behavior has been altered dramatically since the start of the pandemic with consumers leveraging Order for Pickup not only for convenience but also as a contactless solution that they expect to lower their risk when shopping at a merchant.
In fact, we saw this impact in April 2020, the first full month after the start of shelter-in-place orders, when first-time customers represented 3.5% of all ‘click and collect’ orders, an all-time high, even beating out the typical holiday season peak of first-time customers in December 2019 at 3.4%.
The trend has continued to catch on with consumers as the Order for Pickup cohort in May 2020 reached 31.5% of all online orders, representing a 1.5x increase over February 2020 (20%), and again, beating out the December 2019 Holiday cohort of 29.1%. The Order for Pickup cohort dipped slightly in June 2020 to 27.3%.
New customers cut across all income levels. However, over 64% of first-time Order for Pickup customers come from households with an income of less than $75k while those with an income above $100k make up only 23% of first-time orders. Basically, first-time customers with lower incomes have started using Order for Pickup more heavily than those with higher incomes.
Among first-time Order for Pickup customers, consumers making between $25k-50k were the biggest segment, making up about 29% of dollars, items, and orders.
The data shows the change in behavior has also meant an influx of younger Gen Z (18-24) and older Senior (65+) consumers who have begun to use online Order for Pickup.
Millennials (25-34) drove the most first-time Order for Pickup dollar spend (20.5%) while Seniors (65+) bought the most items per order (23.2%). In addition, Seniors (65+) have started using Order for Pickup just as much as Gen Z (18-24) with each group representing 21% of all online Order for Pickup orders.
First-time customers also heavily skew towards males who are spending almost 2X more than females when ordering. However, the mix is a much different story when looking at all Order for Pickup orders with females (59%) spending much more than males (41%).
The top 6 out of 7 North American cities with the highest percentage of first-time Order for Pickup orders are from the South, East, and Midwest:
It is important for businesses to know who these new first-time customers are because they are not necessarily the same consumer demographic that was ordering for pickup prior to March 2020. Merchants need to take advantage of this opportunity in a cost-effective and growing channel to better understand these “first-timers” and align long-term operating, marketing, and communication strategies to include planning for these consumers.
With the most complete view of the online consumer, Rakuten Intelligence is relied upon by more than 200 brands, retailers, and investment professionals to understand the forces driving the digital economy. Rakuten Intelligence helps you keep pace with the market and ahead of the competition by setting the standard for e-commerce measurement.
At Rakuten Ready, as the leaders in predictive arrival technology, we focus on delivering a seamless, efficient, and safe contactless online Order for Pickup experience. Rakuten Ready has years of proven mobile Order for Pickup experience with brands of all sizes. Connect with us to understand how Rakuten Ready can assist your brand with planning, executing, and delivering data insights for a superior contactless Order for Pickup experience.
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