Derek O’Carroll, CEO, Brightpearl
If you Google “buy online pick up in store” (BOPIS), you’ll be struck by how popular in-store pickup has become with consumers. But only with the big box retailers, it seems. The first page of search results mentions Macy’s, Old Navy, Kohl’s, JCPenney, Nordstrom, Urban Outfitters, Target, and Walmart.
A recent report published by Global Data estimates that the BOPIS market will be worth an estimated $10bn by 2022, and account for an estimated 13.9% of total retail spend within the next four years.
That’s all great news, but the question remains: where are all the mid-market guys? Why are they standing on the sidelines? BOPIS is happening now, and they need to get in the game.
Carl Boutet, a Canadian-based retail strategist, said every online retailer with a physical store craves foot traffic and, as a result, should be offering BOPIS. “If you can’t do this,” he says, “then you shouldn’t be in ecommerce.”
The allure (and spending power) of in-store traffic
While it might be tempting to look at on and offline shopping trends individually, doing so limits the ability to see synergies across the different channels. Omnichannel is key, and click and collect shopping has increased 30 percent in the past two years, according to Nielsen. Similarly, a 2018 holiday season shopping survey showed that BOPIS orders between November 1 and December 19 increased 47%, compared with the same period in 2017.
A Main Street presence is essential for specific retail categories, where visiting a local store to see, touch and feel — or even demo — is an important part of the customer journey and buying experience. For example, if you’re buying a fridge or washing machine, you’ll likely want to compare different products side-by-side and discuss features with a sales associate. Or maybe you want to visit the store today and pick up the coffee maker for tomorrow’s breakfast.
And while it’s true that free returns have made it easier to buy fashion items online by reducing risk, a consumer study discovered that, although 7 out of 10 US consumers purchase fashion products online, they do miss some of the experiences provided by traditional brick and mortar retailers, such as fitting rooms.
Taking the in-store demo idea one step further, stores and malls can also function as an inspiration for online purchase, with some brands firing up in-store initiatives aimed at connecting offline with online. For example, Good Housekeeping recently created an incredible retail ‘lab’ experience at the Mall of America, where shoppers could see, feel and test out products for purchase before buying with their phone.
BOPIS: buy online now, enjoy today
Mobile, of course, is where the majority of retail customer journeys start — but not necessarily where they end. About 25 percent of people that start their shopping journey on the web or mobile app finish up by visiting a store. If you’re a retailer with a storefront presence, there are several compelling reasons to integrate BOPIS into your online checkout options.
BOPIS combines the efficiency and convenience of online shopping with the immediacy and instant gratification of in-store. Done right, it eliminates the risk of visiting a store and finding out a product is not available; it also facilitates easy pick-up (either via curbside or a designated pick-up area close to reserved parking).
Cost savings are another key driver — the BOPIS retail model presents cost-saving opportunities for both the retailer and the consumer. More and more consumers are choosing to pick-up in store to save money and avoid the high shipping costs of next-day delivery. In fact, high shipping costs can be an active deterrent during online checkout, causing some shoppers to abandon their cart. BOPIS can convert those shoppers into a sale and help a retailer avoid shipping charges (if free delivery is provided).
The extra foot traffic generated by a BOPIS customer can drive incremental revenue, especially when sales associates are aware of cross-selling and upsell initiatives. Even better, customers who pick up an item in-store usually go on to make an additional purchase once there. According to a recent study run by BizRate, this amounted to as many as 79% of people making an additional purchase when picking up an item in store – presenting a retailer with huge opportunity to drive additional revenue via BOPIS.
Assess your BOPIS technical competence
It’s never been truer: to compete, gain and retain customers, it’s crucial that retailers give shoppers the flexibility to buy and shop how they want. But they have to do it right. A customer who’s enthusiastically selected BOPIS during checkout to arrive for pick-up and then discovers it’s not available at that store is quite possibly a customer lost forever. To execute flawless BOPIS, you’ll need underlying technologies that enable a smooth transaction. Here are five essential ingredients:
- Integrate BOPIS options early in the checkout cycle as part of the range of buying options.
- Implement accurate/real-time inventory management. You’ll need an accurate picture of which stores have what inventory so that shoppers can select the most convenient location. For businesses that have more than one store, you’ll need effective multi-location inventory management so that you can offer a range of pick-up store options and locations to service a wider network of customers.
- Communicate with customers to keep them updated and provide clear instructions on where to pick-up their merchandise.
- Facilitate an easy and memorable pick-up. Retailers that can offer designated parking with a special in-store welcome, sales associates that are skilled in recommending complementary items, and even branded BOPIS packaging, are all ways to impress and build customer loyalty.
- Simplified returns processes – the ability to return an item locally (and for free) provides convenience and the chance to elevate the customer service experience. To execute well, however, requires in-store staff to have access to full customer transaction history, as well as a streamlined returns process in place that can quickly process the return and integrate the returned merchandise into inventory.
BOPIS is a competitive weapon for middle-market retailers; one that in our view is currently under-utilized. At Brightpearl, we work with a number of retailers and brands that are outperforming the industry as a whole, primarily because they’ve been able to adapt and transform, both digitally and operationally. With ecommerce and retail operations platforms support, the ability to put in place consumer-pleasing initiatives like BOPIS and Try-Before-You-Buy will allow retailers to stand out from their competition and compete with the big box players.