October 31, 2019
Brick and mortars are using their storefronts to reach consumers on a digital-local level – uncharted territory for their e-commerce competitors. Today’s BOPIS (buy online pick up in-store) trend converges the ease of shopping online with the convenience of same-day pickups. This retail initiative has proven profitable for Big Box retailers as they experienced a rare competitive advantage during last year’s holiday season.
In 2018, Target had one of its best years in over a decade, with sales increasing by 5%. The strong holiday shopping season boosted those numbers as Target’s digital sales increased by 29% from November to December as they managed 60% more items through online order pickup.
What was the turn of events that catapulted BOPIS orders? Marketplace Pulse (an e-commerce research firm) believes it spurred from last-minute holiday shoppers who couldn’t risk shipping delays.
Retailers are taking notice of the high adoption rate among consumers, “We’re seeing a lot of movement in the buy online and pick up in-store…” according to Fred McCoy, business unit director of Jabil Circuit Inc. Brick and mortars are meeting consumers halfway. Once the customer places their online order, the retailer does the heavy lifting by retrieving the items. This is ideal for consumers who loathe shopping in-store.
The Added Incentives
Free pickups are another incentive that appealed to the majority of consumers facilitating the BOPIS service. Half of the customers using BOPIS preferred the model because there are no shipping costs, and 28% of consumers said it was more convenient.
BOPIS customers also avoid common brick and mortar shopping hassles of long checkout lines, roaming through a maze-like store and a stressful retail environment. Instead, these customers get their items at customer service or in some cases, remain in their car entirely. Customers have the freedom to pick up items at their convenience — after work, during lunch, while out running errands, etc.
What are the Challenges?
Retailers investing in this approach have to think about customer expectations. Once orders are made online, retailers need to be certain their item is on the shelf, ready for pickup. To thrive, retailers need to develop a disciplined inventory strategy with proper monitoring. This may mean revisiting the process of getting packages from warehouses or vendors to their local stores.
Even amidst an era of rampant online shopping, the BOPIS service satisfies the customers’ desire for instant gratification. Brick and mortars finally have the upper hand on a retail service that their e-commerce counterparts are still trying to gain traction in.
Article originally published by RETHINK Retail, a Valtech media company.