Old Navy just might be incentivizing shoppers to wait till the last minute to order their gifts from the chain-store clothing retailer, with the news that it’s working with rideshare company Lyft on a partnership tailor-made for click-and-collect orders.
The Gap Inc.-owned apparel chain said that for the last two Saturdays before Christmas, Dec. 15 and Dec. 22, people who opt to place their orders online for in-store pick-up can take a free Lyft to their designated store to retrieve their purchases, rather than dealing with the holiday hassle of navigating crowded thoroughfares and searching endlessly for an open spot in overstuffed car parks. The offer is valid for a roundtrip visit to an Old Navy store, the company said, and the fine print stipulates that it actually covers up to $10 off rides to and from a store location.
The partnership marks one of the first times a retailer has leveraged a ridesharing provider during the holidays to help encourage visits to its stores. With Lyft accessible to 96 percent of the U.S. population, most Old Navy customers should be able to take advantage of the promotion.
However, Forrester analyst and e-commerce expert Sucharita Kodali questions the value of Old Navy’s deal with Lyft, noting that whether or not it’s a smart move boils down to how the offer is being subsidized. Brian Kilcourse, managing partner with retail industry research firm RSR went one step further, calling the Old Navy promotion a “gimmick.”
“While it’s too early to guess how many of their transactions would have the added cost burden of paying for the Lyft ride or what the ‘basket size’ of those transactions might be, any new cost will add to the total cost to serve, and that of course takes away from earnings,” Kilcourse explained.
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Then there’s the issue of the last-mile fulfillment burden for click-and-collect purchases. Customers typically shoulder this responsibility themselves, having to schlep to the store to retrieve their purchase. Partnering with Lyft, presumably at some cost, according to Kilcourse, “puts the ‘last mile’ burden onto Old Navy.”
Though it might help out some customers trying to beat the holiday rush, Old Navy’s high-profile partnership with Lyft might be “more about buzz than anything else,” Kilcourse added.
For Richard Kestenbaum of Triangle Capital Partners, the Old Navy/Lyft partnership is worth a look if only “because it turns the free delivery option on its head.”
“Instead of delivering the product from the store to a home for nothing, it delivers the consumer to the product in the store for nothing. What’s interesting about that is that it gives the retailer the possibility to sell more items to the consumer,” Kestenbaum said. “The question is: is the price of a Lyft what’s stopping consumers from going to stores? I don’t have data but … I don’t think so.
“Free delivery of products to homes is a real convenience and free delivery of consumers to stores is, well, something else and I’m not sure it will resonate much with consumers. It’s hard to see what problem it solves.”