The retailer must essentially keep availability counts for items that can be sold online (if different), then a separate list per store. These lists must be accurate or you're going to have angry customers showing up to grab items you don't have - and anyone who has done retail knows how hard accurate inventory can be, especially with entry-level staff.
Once inventory is accurate, these retailers must then program their sites to show which items are available for pickup at which locations. THEN if you want to allow customers to pick up items that aren't in the store, you need to communicate when they can pick it up based on delivery time.
It gets complicated: do you have the customer choose their closest store up front, even if they don't want to do local pickup? This implementation wastes online buyers' time and creates a barrier to browsing. Do you have customers choose the store when they check out? If so, the option might not be available for the items they've chosen thereby frustrating your customer. Do they choose the store on the product page? The product page is usually your busiest page already, and you generally don't want to add any steps between it and checkout.
Regardless of which option you choose, you then have to figure out how to deal with available at nearby locations. Do you really want your user selecting all 3 nearby locations to check availability for pickup? Do you want to display every nearby store that could fulfill pickup? How do you give them the message that it's available nearby? Should you share the negative when it's not available nearby either to prevent them from checking each store?
The questions just go on.
It's not impossible, but there's a lot that could go wrong here for two or three-store retailer. Even Target got it wrong when I recently tried to buy a wedding gift. They wanted me to wait 2 days for them to deliver a vacuum to the store, even though they had half a dozen in stock when I called.
My wife and I were researching minivans in our metro area. We got calls from the dealership asking if we're still interested in the vehicle. We said 'yes'. One hour before we drove to the 'burbs' to check it out, I called to confirm the availability of said vehicle. They said 'yes, it's still here.' We get to the dealership only to find out that the vehicle was sold THE DAY BEFORE. A major car dealership didn't have a system in place to know their inventory at any given point in time. They're a part of a weird "sharing" system between dealerships that can borrow/trade/steal vehicles from their partner dealerships-- all within the same "family" company. But they clearly had no way to track this activity.
It seems that inventory control/management spans many domains. Needless to say, they lost our business and we bought from someone else.
For local inventory — I work for a team which has been trying to collect this data for years. You're 100% right ... it is extraordinarily hard. What's particularly crazy to me is that consumers are already starting to _expect_ it from businesses, and are shocked/angry when it isn't perfectly accurate. I think it is a carry-over from web shopping — it works there, why shouldn't it work in a store?
Had a similar experience ordering from Chapters Indigo around Christmas. I had the option to pick it up in-store, or ship it to my home. It was quicker to ship it to my home, because they wanted to ship it from their warehouse to the store I would pick it up at... even though that store had the item in-stock. This service would take up to 2-3 weeks to happen, IIRC (though I may be remembering wrong).
I don't think the economics of a lot of the delivery services work, especially for single-person or other small orders; here, it's pure cost savings. The 8% cut is ...ambitious, but it might make sense, and they can always drop it to something more reasonable like 5%.
Of course, some existing customers and sales will also move in that direction, so the answer here may be, as is often the case, it depends.
What I find truly fascinating is that Square is(was) a "payments" company. Or, more specifically, a credit card terminal company. But this offering and their recent acquisition of BookFresh makes them more of a back-end for small business. They may be one of the few companies to have figured out how to sell to small business at scale.
Apparently the answer there is, find something small, complicated, and annoying... fix it. Build that toehold into a platform to take on the larger opportunity.
Ambitious is right - I feel like the 8% is too steep a barrier to entry. If they launched it at 5% I could see it getting much higher adoption. Do you think it's as simple as "they can always drop it" or might a competitor outdo them on price and become the standard?
Something like a pick-up window would work.
> do you show your phone to the person and hope they have good organization of orders pending pickup?
In my opinion, if the food truck has implemented this Square software, they might keep "organization of orders pending pickup" in mind. Showing your phone to the person should be enough, (with some sort of simple identification on the phone message).
I don't know if Square Pickup does this but I'm just arguing against your doubt that it wouldn't work.
Yikes.
But, finally a product from Square with a fat profit margin (an extra 5.25%). I wonder if this is a sign of their future monetization strategy.
Their base processing fee of 2.75% + $0.00 is probably actually pretty low-margin for the particular "very small business" market they're targeting. There are big advertising costs, lower volumes per business and probably higher fraud rates.
And upmarket from that, medium-sized businesses are used to commodity processing fees closer to 2%. The whole "free reader/register" pitch is not as appealing there, where a higher processing fee would end up costing a lot more.
Maybe their strategy is to break even on the base processing to get mindshare and sell premium services like this. The challenge, as with all "Yelp moves", is that it makes you a follower not a leader.
(P.S. I don't mean to single out Yelp too much here.. plenty companies do it. I think they came to mind because they're also in the small business space.)
You can't just make a statement like that and play it off. Citations? I see Square devices used everywhere in retail, and no, I don't live in San Francisco or the Bay Area.
But Square's business yields razor-thin profit margins, if any... About four-fifths of that money is spent on fees to payment networks... other financial intermediaries and fraud costs...
Square's gross margin, the portion of revenue remaining after paying processors and covering other costs like fraud, fell to 21% in 2013, from 27% in 2012, according to a copy of Square's results viewed by The Wall Street Journal.
Square has been adding services that could eventually be more profitable than its main payments business.
http://online.wsj.com/news/articles/SB1000142405270230382560...
But in recent weeks, people close to Square have indicated to Wall Street executives that a 2014 offering is unlikely because the company has run into problems with its "revenue run rate," a key projection of future performance. It has been reported that Square is unprofitable, but that 2013 revenues exceeded $100 million.
http://www.foxbusiness.com/markets/2014/02/28/square-ipo-pos...
https://squareup.com/help/en-us/article/5227-accept-pickup-o...
The most interesting part to me was this:
"Square’s standard fee of 2.75% will be applied to the total amount of each pickup sale for a limited time, until July 1st, 2014. After this time, the fee will be 8% per pickup order."
"If an order isn't accepted within 2 minutes, a Square Team member will call you directly, so please keep a phone nearby."
I do think Square could better explain why this service is 8% while everything else they provide is included in the 2.75% normal rate.
This is just a feature where Square-powered stores can offer customers the ability to place an order for a product remotely, and then be notified of when it's ready. At which point the customer can go to the physical storefront and pick up the item. There's no addition of delivery and it's not limited to food.
EDIT: Looks like GrubHub offers take-out services as well as delivery. I didn't know this because they aren't available in my city so I haven't kept up with them.
In Square Pickup's case, this is an easy storefront for restaurants to offer their own online take-out interface. It looks like each restaurant gets their own white-labeled website, rather than just being a behind-the-scenes supplier to Square. You go to the website of the restaurant you want to order from and place the order directly with them.
(My one complaint about OrderAhead - they split any tip you give with the business, rather than just giving it all over to the business for the employees. That seems unfair to the employees.)
It's like bundle sale: have something charming as primary item and earn real money by less attractive add-ons.
As a consumer I've had great service from EatStreet and their local restaurant partners. No idea what the vendor side of the process is like. Square is building quite a tie-in to their handy hardware as much as the app itself.
http://techcrunch.com/2014/04/07/following-competitor-grubhu...
I worked for a retail store in College that had this implemented with their POS. The setup was similar, without the iPads. More customers would still order the product from the warehouse and have it delivered to the store rather than pick it up that day out of the stores stock.
So, it's my experience that this will not work. However, I wish them the best. Maybe they can shake things up a bit.
