I don't think most people realize how hard online-to-local-pickup is for a retailer. "Interested in local pickup? Give us a call." is going to be a better customer experience 9 times out of 10. I hope Square gets it. Retailers - many of them with limited resources and technical skills - face big technical, UI, and logistical issues. I'll give one implementation example that shows all three; this applies to all retailers who don't stock everything in the store OR have multiple locations.

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.

This is (to me) the most interesting thing I've seen Square do since they launched. It's a bit pricey, but there are lots of great examples of pickup/takeout working well -- chipotle, for one. If smaller stores could do this easily, I'd be a lot more likely to order from them, especially if it's a larger/group order where spending the time on the phone is a pain (and often incorrect).

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%.

For food trucks, this seems interesting. Most food trucks I see using square enter the orders directly into square already. If I can avoid the line at a food truck by putting in my order and just wait for them to call my name with my food, that would be pretty amazing.

8% per order.

Yikes.

Overall I can't help shake the impression that this is kind of a "Yelp move": your core business model isn't that hot, so break the glass of the nearest hot business model and copy it. Yelp's done that with daily deals, checkins, etc.. This is Square doing a "GrubHub".

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.)

Is this kinda like GrubHub but more general? Or is it more about making it easy for businesses to take pickup orders on their websites?

This is totally the right direction Square is heading to: provide complimentary service which makes the real profit. 8% seems steep but you get their super low 2.75% credit card processing fee so the total package is still appealing.

It's like bundle sale: have something charming as primary item and earn real money by less attractive add-ons.

One other contender in the restaurant domain is EatStreet.

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.

https://geteatstreet.com/

http://techcrunch.com/2014/04/07/following-competitor-grubhu...

Novel, but I sure hope they aren't banking on this.

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.