November 25, 2019
November 25, 2019
Contributor: Sarah Hippold
Retailers can optimize customer experience and sales by offering attractive buy online, pick up in store models.
Consumers increasingly choose to purchase online and pick up their orders in store. This service hands greater control to consumers and allows them to collect from store at a time convenient to them. We are also experience environmentally-conscious shoppers using pick-up more often as a means to reduce carbon emissions and packaging.
The last mile, from a transportation hub to the final destination of a delivery, is the trickiest and most expensive for retailers. And with impatient consumers looking for a faster and more convenient option than home delivery, a new concept has emerged: Buy online, pick up in store (BOPIS).
“Economically, a BOPIS model makes great commercial sense,” says Tom Enright, Vice President Analyst, Gartner. On the one hand, retailers save shipping costs. On the other hand, online shoppers visit physical stores and might be enticed to make additional purchases. The key is to tune the service and consumer experience to achieve maximum benefit for both parties.”
Newcomers to the BOPIS model should learn from the mistakes of experienced companies. For example, customer experience was underwhelming at the outset. Customers who were just trying to pick up in the store had to stand in line and wait at the check-out desk with in-store customers. BOPIS consumers are usually pressed for time, and although many purchase additional products while in the store, they still want their shopping journey to be quick. Experienced retailers create a dedicated, staffed collection desk for BOPIS clients equipped to process additional purchases directly from the store and reduce the amount of time customers wait in line.
Taking it one step further, companies like Walmart and Zara invested in automated terminals to process pickups and returns. BOPIS clients receive a code which, when entered at the terminal, prompts a robot in the store stockroom to trace and retrieve the order and deliver it to the collection point on the sales floor. Many retail stores may not have sufficient sales floor or stock room space to install those kinds of systems, but those that do offer an elevated level of customer experience over the collection desk model.
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Aside from inefficient pickups, in the early stages, BOPIS revenue was typically assigned to the e-commerce account, not the store. Accordingly, pick-up clients were a low priority for staff. It’s crucial that store associates engage with BOPIS clients in a positive way and make them feel welcome.
They will only do that if they know that their store is fully credited with the value of the BOPIS sale and that the sale contributes to their overall and personal targets. The intention of the crediting program is to create an environment in which store associates are as unconcerned with the consumer’s use of shopping channels as the consumers themselves.
To even be considered as an option, the lead time between order and BOPIS options must be less than standard shipping. Retailers with a mature BOPIS model already offer same-day pick up, and when the required item is already part of the store’s inventory, it can be ready for pickup in a few hours. However, traditionally, retailers tailor store inventory to meet performance targets and space constraints.
When it comes to ordering products, this means retailers often focus only on demand from walk-in shoppers, which also means that’s the only inventory available to BOPIS shoppers. If the store is short of popular products or doesn’t carry popular BOPIS products, excessive amounts of inventory must be shipped to the store everyday to meet demands.
The ideal store assortment appeals to the shopper community as a whole and displays the requirements of walk-in and BOPIS clients equally. When this goal is achieved, retailers will be able to optimize profits from all client groups and increase customer experience at the same time.
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Recommended resources for Gartner clients*:
How Retailers Can Master Buy Online, Pickup in Store by Tom Enright
*Note that some documents may not be available to all Gartner clients.