This article by Jim Barnes, CEO of enVista, first appeared on Forbes.com.
Consumer expectations and the way we shop have continued to evolve rapidly in 2020, with U.S. ecommerce sales reportedly increasing by more than 30% year-over-year, and effectively accelerating the online shopping shift by nearly two years.
With this significant increase in ecommerce converging as last-mile fulfillment capacity tightens, many retailers are missing out on the strategic opportunity to improve margins and increase profitability by promoting buy online, pick up in store (BOPIS), or curbside pickup. The most profitable order is one fulfilled at the store where store inventory is leveraged and the consumer assumes last-mile fulfillment cost and effort.
While many retailers promote BOPIS, those that strategically and proactively nudge the consumer to select BOPIS or curbside pickup at the time of purchase with incentives and/or shorter delivery windows are realizing greater profitability and competitive advantages. In addition to personally ensuring customer satisfaction, BOPIS allows retailers to reduce their reliance on third-party carriers, which can significantly impact consumer satisfaction and the retailers' brand experience — particularly carriers that have increasingly stretched beyond capacity during the holidays and have warned about shipping delays. UPS recently implemented shipping limits for retail giants such as Gap, Nike and L.L. Bean to manage this holiday season's ecommerce surge in an unprecedented move.
Below are five reasons retailers should nudge consumers to buy online and pick up in-store:
Last-mile fulfillment is perhaps the most challenging and costly component of omnichannel order management. It is not always evident how important it is to order profitability, but last-mile fulfillment makes up approximately 53% of the total costs of shipping. In response to larger-than-average volume, UPS and FedEx have increased prices during the holiday season and held merchants to volume agreements.
When considering the significant expense and logistical challenges associated with final mile, such as low carrier capacity, BOPIS is an optimal way to increase your margin per order — particularly for retailers that offer free shipping or flat-rate shipping.
Enhance Customer Experience And Maximize Convenience
Curbside pickup enables an interaction between the brand and consumer that would not have otherwise occurred through last-mile fulfillment, creating an opportunity for retailers to "wow" their customers to keep them coming back. The consumer experience is becoming more critical — 83% of consumers admit paying just as much attention to how brands treat them as the product they sell.
Keeping in mind the best practice of order fulfillment in two hours or less, BOPIS can be considered a "same day" delivery model without the usual associated costs. By creating a quick, pleasant experience and providing friendly customer service, BOPIS enables personalization of the brand and the opportunity to form these key differentiators and increase greater brand loyalty.
Eliminate The Risk Of Shipping Delays
By implementing curbside customer pickup, retailers can reduce the risk of shipping delays due to limited carrier capacity, particularly during peak season when customer service levels are not necessarily guaranteed by carriers. Consumers are accustomed to two-day shipping, and when shipping is delayed due to carrier delays as a result of driver shortages and the overall increase in online orders, it can impact the customer experience and reflect poorly on the brand. Depending on whether the item is available in store, BOPIS can also drive quick service, relating back to enhancing the customer experience.
Increase Foot Traffic And Upselling Opportunities
When consumers go into a store to pick up their order, they are often tempted to browse around or remember to grab another item and will often purchase additional items. This creates the perfect opportunity to increase sales and increase basket size. Research shows that 85% of consumers make an additional in-store purchase while picking up an online order.
Leverage Store Inventory
BOPIS enables retailers to fulfill more online orders from inventory they already have. Retailers can move more store inventory and combine online and in-store inventory systems, which offers access and greater, real-time insights to a larger inventory pool. This strategy also helps retailers avoid costly markdowns and the resources required to sell nonproductive inventory.
Key Considerations For Retailers
- A robust order management system (OMS) with enterprise inventory visibility is essential for an optimal BOPIS and curbside strategy and customer experience. A cloud-native OMS is a cornerstone for retail success, with the capacity to optimize omnichannel order fulfillment and orchestration, as well as deliver a single view of the customer, inventory, order, item and payment that is needed to unify commerce. The OMS allows retailers to alert consumers that their order and payment are received and when their order is ready for pickup, empowering store associates to deliver personalized customer service, enhancing the customer experience and brand loyalty.
- Store labor is a critical component to an effective BOPIS strategy; stores must be appropriately staffed to support both in-store foot traffic and ecommerce order fulfillment, and associates must be adequately trained to deliver the optimal consumer experience. A lack of resources when leveraging BOPIS can do more harm than good for the brand if the bandwidth and training are not available to provide exceptional service.
- Retailers must consider what changes need to be made to ensure logistical challenges are addressed before implementing BOPIS. This includes requisite communication, alerts and clear instruction to both consumers and store associates for a unilaterally easy, efficient BOPIS experience. And stores must also ensure adequate infrastructure, including dedicated parking, kiosks, storage and signage to enable easy navigation and the best customer experience.
As consumer expectations and the market continue to change, retailers must continue to find new ways to provide quality service for their customers without sacrificing profitability or customer service. When effectively implemented and strategically promoted, BOPIS and curbside optimally converge both online and in-store shopping, offering the best of both worlds for retailers and consumers alike. So, the key question for retailers remains: How are you actively and consistently nudging consumers to buy online, pick up in store throughout the buyer journey?