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With the staying power of ever-present online retailers, customers are demanding quicker fulfillment options from traditional retail brands to compete with the much-publicized two-day, one-day, and now even same-day delivery options. As the likes of Amazon, Target, Walmart, and other retail giants implement newer and quicker delivery capabilities—seemingly on a daily basis—other retailers are scrambling to find ways to capitalize on the consumer desire for instant fulfillment gratification.

One of these fulfillment options is typically referred to as ‘buy online pick up in store’ (and more commonly called ‘BOPIS’ and/or ‘click and collect’), which allows a customer to have their product in-hand the same or following day. In a perfect world, the BOPIS capability allows a customer to shop online with visibility into a store’s actual inventory, reserve the item from that inventory with an online order, and pick up their order in the store on the same day it was placed.

Some of the more advanced store retailers are even taking BOPIS to another level, where they provide curbside delivery so that the customer never has to get out of the car. For the purpose of this point of view, let’s concentrate on BOPIS with the typical in-store pickup process and the benefits that it presents to both the customer and the retailer.

The New World of Retail

The shopping world has permanently changed. Not very long ago, it seemed like the entire world was out shopping from Thanksgiving throughout the holidays with ‘Black Friday’ and the day before a specific holiday being absolute chaos. With extremely crowded stores, malls, and shopping centers, a fair amount of patience was required from shoppers endlessly circling the parking lot pursuing the elusive open space or waiting in seemingly endless checkout lines. Granted, some consumers anticipate this time of year, love the associated mayhem, and truly enjoy the ‘thrill of the hunt’ for the perfect gifts. But this is not the case for everyone—especially with our progressively time-strapped lives.

There was never a guarantee that shoppers would get exactly what was desired or needed because their shopping success was at the mercy of the local stores’ assortments and inventories.

During these shopping frenzies (and during calmer periods), consumers use different senses to determine the quality of products, which in turn provides confidence in the items they purchase. In the days before online retail was widespread, there was never a guarantee that shoppers would get exactly what was desired or needed because their shopping success was at the mercy of the local stores’ assortments and inventories. Even if a store had the ability to get additional stock, it could be days or even weeks before a desired item would be replenished.

Nowadays, the shopping experience is totally different. Consumers are able to browse online and buy things without ever entering a store. Moreover, advanced e-commerce/digital and mobile capabilities, higher quality product images, the prevalence of customer reviews, and other attributes make online shopping increasingly more appealing.

One of the major selling points of this new online experience is that in many cases shoppers can get their items within a two-day delivery timeframe—often for free or nominal shipping cost. This shift in the shopping experience has forced typical store retailers to change their strategy for attracting customers. They are compelled to find new ways to get customers into their stores or risk losing a large segment of their sales, and BOPIS is one strategy to reduce this gap with online retailers. BOPIS elevates the retailer above other competitors that do not offer the service. In fact, according to a study conducted late last year 50% of shoppers have used this service—a number that we expect has grown substantially since the study was published and will continue to increase.

Customer Benefits

With this new quick turnaround for purchases, customers increasingly have an “I want it now” mindset when it comes to shopping. A retailer’s BOPIS process helps a customer achieve that goal and more: online reservations, quicker pickups, product validation, and easier returns.

Shopping Convenience


A customer can always browse online for the retailer’s goods at their leisure, whether they are at home or on the road somewhere filling time. The method of browsing is the same whether the customer is looking into using BOPIS or just placing an online order for regular delivery. With the ubiquity of online shopping, it is obvious that the retailers that do not provide online ordering lose customer interest quickly, which leads to lost sales and often, customer abandonment. Adding the convenience of not only placing the order online, but also the option of picking it up the same day provides clear benefit to the customer.

Instant Gratification


A BOPIS order technically allows the customer to get their items quicker than typical online retail transactions because the customer is able to place their BOPIS order and then get notified when the order is ready for pickup, which is typically the same day or the following day (if ordered late in the day). Since most online retailers rely on traditional shipping methods to get products to the customer, there is typically at least a one-day delay until an online order is received. BOPIS helps fill in that gap and gives customers the ability to get their items the same day the order was placed. While indeed, the customer has to drive to the store, they have confidence of receiving the items almost immediately, and therefore, most do not mind the slight inconvenience of visiting their local store. Another benefit associated with this option—and in the same manner as retailers who offer complimentary ‘ship-to-store’ fulfillment options—there is no shipping cost to the customer.

In the case where a particular item may not be available at the customer’s closest store, most retailers have introduced the capability of showing other nearby stores where the product can be picked up that day. Many consumers are willing to drive a bit farther if the urgency is great enough.

Product Validation


One of the biggest concerns of utilizing online retailers is the customer cannot physically see and touch an item to determine the level of quality, whether it is the desired color, and/or if the size is appropriate for the customer’s needs. With a BOPIS order, the customer has the freedom to cancel the order if they get to the store and discover the item does not meet their expectations.

Convenient Returns


Then, there is always the issue if the customer wants to return an item. This is really only relevant for ‘pure play’ online retailers (those with no physical stores)—in most cases the return item must be shipped back to the retailer, which can cause customer frustration. Most sophisticated online retailers that do have physical stores allow items to be returned in-store to avoid shipping hassles. Further, many pure plays include packaging and labels to make shipping return items easier. But with a BOPIS process in place, customers typically have the option of returning the item to any store at any time within the retailer’s return policy window without worrying about RMAs, re-packing, and other shipping logistics. Arguably, on the retailer side, processes must be in place to handle return items that may not be in the return store’s assortment to ensure inventory accuracy and visibility are kept intact. However, this is another opportunity to gain valuable foot traffic and introduce the customer to new items, services, or other brand attributes—we will talk about this a bit more in the next section.

Retailer Benefits

Not only does BOPIS provide customer satisfaction (when executed well), but it also benefits the retailer in multiple ways that actually become the main drivers for pursuing a BOPIS implementation. Most of these outcomes have to do with top line revenue impacts: increased online orders, incremental in-store traffic, additional marketing avenues, and compelling the retailer to improve their inventory accuracy processes and systems.

Increased Online Orders


By giving the BOPIS option, the retailer can fulfill the customer’s need for immediate gratification. Without that option, the customer may look at some items online, but they may not complete the transaction due to long lead-times for delivery or they may go to another website to see if they can get the same or similar product quicker or cheaper, which often leads to lost sales.

Incremental In-Store Traffic


A retailer’s key goal is to sell products, and properly implemented BOPIS processes can actually do more than just secure the sale.  Since the customer has to pick up the item in the store, the BOPIS order naturally leads to increased store traffic.  This creates the opportunity to generate add-on sales to the original BOPIS order because most customers will peruse the store once they are inside.  A well-trained store staff can capitalize on this incremental traffic to provide exemplary customer service, further enhance the customer experience, and boost loyalty—which typically translates to higher sales.

Additional Marketing


If merely walking into the store is not enough temptation for the customer to buy additional items, then the retailer can offer coupons or other incentives for in-store purchases when the BOPIS order is placed to help guide the customer towards items they may not initially have been shopping for. These offers do not have to be for specific items, and in fact, they are likely more effective at getting customers to peruse the store at item pickup time if they are just a general percentage off an in-store purchase. This presents a new avenue for marketing campaigns and can also serve to educate the customer about new items in the retailer’s assortment or array of services offered. These add-on sales are typically one of the main reasons that retailers pursue BOPIS.

‘Forced’ Inventory Accuracy


One of the other key benefits reaped from a BOPIS implementation is the inventory accuracy gained through systemic integration and supporting business processes that enable accuracy. In order for BOPIS to work, the relevant systems must constantly communicate with each other—primarily those handling inventory, such as assortment planning, item planning, replenishment, allocation, and store systems. An inventory batch update overnight is no longer a realistic integration strategy.

Further, while master data must be integrated and consistent across all internal and customer-facing systems before BOPIS can be implemented—undeniably, the most important data shared across systems during BOPIS transactions is inventory. The retailer must have processes in place to ensure that physical inventory levels are correct at the time of the BOPIS implementation and also have a way to audit inventory levels constantly to validate that the ongoing inventory information is accurate. Incorrect store inventory information is catastrophic for the BOPIS process. It will either prevent order creation by making the customer think the item is not in stock, or the customer will complete the online transaction only to have it subsequently canceled by the order management system (or store staff) because the website inventory was incorrectly representing the actual store inventory. With a well-designed inventory flow created or updated as part of a BOPIS implementation, the retailer is innately improving their inventory accuracy across the enterprise. Enhanced systems that enable BOPIS status reporting can help provide an easy way to monitor these inventory levels.

Final Word

Certainly, keeping an eye on advanced retail technologies and innovations is important in  maintaining a competitive edge.  But true future-proofing your company for longevity entails ensuring a solid strategic roadmap is in place, the organization’s people are supported and valued, data and systemic integration is a priority, and critical capabilities are being effectively managed and executed.  Focusing on these combined elements before laying the cement for any new technology will put you on a road of less construction, enable much smoother implementation, and enhance your chances of achieving expected benefits.

About Parker Avery

The Parker Avery Group is a leading retail and consumer goods consulting firm that specializes in transforming organizations and optimizing operational execution through the development of competitive strategies, business process design, deep analytics expertise, change management leadership, and implementation of solutions that enable key capabilities.

For more details, contact:

Amanda Astrologo
Partner

Robert Kaufman
Chief Executive Officer

770.882.2205

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