The Science of BOPIS: How are Successful Retailers Offering In-Store Pickup?

The desire for convenience and instant gratification is now what’s driving customer expectations and accordingly, consumers are becoming less and less patient. Three-day delivery’s no longer cutting it and many will be happy to pick up their order in store so they can have it right away.

From 2017 to 2018, “the adoption of in-store pickup during check-out climbed 49% year over year”¹. To catch up with the rising customer expectations and competition, an increasing number of retailers have been recently supporting Buy Online and Pickup In-Store (BOPIS) features. According to a report by Retail Dive, 90% of retailers are expected to offer BOPIS alternatives within the next two years².

As retailers become more digitally driven and are looking to implement these new fulfillment options, they’re turning to next-generation omnichannel order management solutions to help them bridge the gap between their physical and online operations. By leveraging their stores as local distribution centers, retailers can offer more fulfillment alternatives to their customers who can then enjoy a quick and convenient purchasing journey wherever they shop!

Here’s a few of the many ways in which BOPIS can benefit retailers:

• It increases customer satisfaction. Clients will be delighted to be offered the option to come in-store to pickup their order. They can get it right away and don’t have to worry about shipping fees or minimum order thresholds.
• It drives additional traffic to stores and offers retailers the opportunity to up-sell and cross-sell to customers following an e-commerce purchase. “Shoppers who buy online and pick-up in-store are an extremely valuable segment for retailers, because they tend to convert more and spend more"³. Data shows that in-store pickup customers convert six times more than other shoppers and they also have a higher average order value — spending on average 6% more than customers who go the traditional shipping route³.
• It increases fulfillment efficiency and reduces shipping costs. By leveraging their store network, retailers rely less on their distribution centers and third-party-logistics providers (3PLs), ultimately saving on last mile delivery costs and making better use of inventory .
• It creates a new revenue stream for stores as the online revenues are assigned to the store that fulfills them, and reduces the costs of discounting merchandise that was not sold in-store since it can now also be sold online

BOPIS variants and orchestration scenarios to get you inspired

While retailers’ intent to offer various in-store pick-up options has certainly become a priority, the backend process of how they’re managed remains more challenging. Here’re few orchestration scenarios to help you get started:

• Buy Online, Pickup In-Store (also known as BOPIS)

  This is a scenario where an online order is fulfilled entirely in one store and available for pickup at the same store. In the example below, a client buys a drill and a BBQ and wants to pick up his purchase in Store A. He also wants to be notified by email as soon as his order is ready for pickup. As he completes his order online, an associate from Store A receives a notification of a new order on his tablet. He acknowledges the order and starts the picking process while a notification is sent back to the customer. Both items are taken from Store A’s inventory and packed. Once the store associate has completed the order, another notification is triggered and sent to the client to let him know that his order is now ready for pickup. The customer then picks it up at Store A with a digital signature, just in time to host his BBQ party!

  

  
  

• Buy Online, Ship-to-Store (often just referred to as Ship-to-Store)

  There are multiple cases and reasons why sometimes an order cannot or shouldn’t be fulfilled directly in-store – for example there may be no store with all the items in stock. The order can then still be fulfilled from other locations (distribution center or other stores) and shipped to the store that the customer selected for pick-up. Ship-to-store ensures customers can go to their pick-up location of choice even if the inventory they need is somewhere else. In addition, small stores with limited inventory can still serve as convenient order pickup locations.
  
  

• • Fulfill from Distribution Center or Another Store

    In the example below, Store A doesn’t have the inventory on hand to execute the order, so the routing engine sends the order to the distribution center. The order is picked and packed according to the same rigorous process before being shipped to Store A. A notification is sent to the customer as soon as the order is delivered and ready for pickup at Store A.
    
    

    

    
    

  • Split Order Fulfillment Process

    In this scenario, Store A has the inventory on hand to partially execute an order (for instance, it has the BBQ, but has no drills left). They acknowledge the order and wait to receive the remaining item from the distribution center or another store. As the drill gets delivered to Store A, a notification is sent to the customer to let him know that the picking process has started. Once the whole order is packed and ready, another notification is sent to let him know that his items are ready for pickup at Store A
    
    

    

    
    

• Pickup Location & Lockers

  Sometimes pickup isn’t necessarily done in-store, but rather at a predetermined pickup location or lockers. For example, IGA, a leading grocer, has launched its pilot project for refrigerated pickup lockers with the help of Orckestra’s Commerce Cloud. The items are still picked and packed in-store, but are then delivered to pickup lockers which are more convenient for the customer. Pickup locations or lockers can also be less expensive than home deliveries considering that all the orders are shipped to the same location. Yet the process needs to be properly managed to ensure that each order is picked up by the right customer.

  
  

Offering BOPIS options isn’t enough, the shopping experience must be outstanding

Unfortunately, 18% of customers report to have had problems when trying to order online and pickup in store⁴. Having to stand in line at the return desk or seeking out store associates on the floor for help can be frustrating for customers trying to pick up their purchase for which they already paid. In addition, “24% of BOPIS orders were not ready for pickup: even after pickup notifications were sent” according to research from Forbes⁴.

Retailers shouldn’t only focus on improving the logistical efficiency of their operations, but also on customer experience. It’s crucial for the order to be ready when the customer comes to pick it up. A shopper who has a seamless BOPIS experience and receives the appropriate notifications in a timely manner is more likely to use the service again and recommend it to others.⁴

Whether they review their entire business process or simply make a few changes, such as adding clear signage leading to the pickup desk, implementing BOPIS options will require some adjustments. Retailers must review their workflows and leverage an event-driven architecture that captures key events in the workflow and can send the right notifications at the right time to customers, ensuring consistency in the customer experience.

How to implement BOPIS strategies within your organization?

Offering in-store pickup can sometimes hide some potential logistical costs. For certain items, such as very large products, it might be less expensive and cumbersome to have them delivered directly to the customer’s home instead of having them shipped to a store or picked-up in-store.

Making sure orders get fulfilled from the most appropriate location at all times can seem rather complex, but with the right tools and support of experts, it can be easy. Orckestra offers a flexible and scalable omnichannel order management and fulfillment solution that can be easily integrated with your current technology ecosystem to help you manage very complex fulfillment scenarios across all your retail channels.

For more information about Orckestra omnichannel order management and fulfillment solution, contact us or download our eBook  on how to get the best routing model for the best omnichannel fulfillment results.

References

¹ Evan Bakker (Mar 15, 2019). Retail’s New High Stakes from https://www.gartner.com/en/marketing/insights/daily-insights/retails-new-high-stakes

² Tatiana W. (May 17, 2019). Report: 67% of retailers say omnichannel is a priority Retrieved from https://www.retaildive.com/news/report-67-of-retailers-say-omnichannel-is-a-priority/554750/

³ Jacqueline S. R. (December 4, 2018). Is BOSS the new BOPIS? Retrieved from https://www.supplychaindive.com/news/BOSS-vs-BOPIS-omnichannel-strategies/543553/

⁴ TJ McCue (February 25, 2019). Order Online Pickup In Store Same Day: 300 Secret Shoppers At 10 Top Retailers Getting It Righ Retrived from https://www.forbes.com/sites/tjmccue/2019/02/25/order-online-pickup-in-store-same-day-300-secret-shoppers-at-10-top-retailers-getting-it-right/#3b0a58ba10ed