Photo: Target
Has BOPIS changed holiday selling?
On Christmas Eve, Target prepared nearly five times the number of products for curbside pickup of online orders than it did the year prior. The finding provides more evidence that holiday procrastinators have discovered the convenience of buying online and picking up in-store.
In a blog entry, Target CEO Brian Cornell saw the last-minute BOPIS strength as a sign that “consumers are more and more comfortable shopping later in the season.”
Target’s holiday results also show customers have become comfortable with in-store pickup. Overall, sales through Order Pickup, Drive Up and Shipt-supported same-day delivery were up more than 50 percent during the November-to-December period. Stores fulfilled more than 80 percent of items bought digitally.
“We knew our same-day services would be a lifesaver for busy guests, and it was great to see so many families adopting them to make life a little easier,” wrote Mr. Cornell. “The speed and convenience clearly resonated.”
Other signs of in-store pickup’s strength came in a study from Adobe, which reported BOPIS increased 35 percent over the holiday period. Shoppers used the option most frequently during the seven days just before Christmas.
Adobe believes the core reasons for BOPIS’s growth are getting product sooner than delivery by mail, saving money on shipping costs and theft prevention. Adobe also said that based on its own survey of more than 1,000 consumers, 82 percent of BOPIS users are likely to shop for additional items at the store.
Salesforce calculated that retailers that offered BOPIS saw 56 percent more active digital shoppers — people who use site search, add a product to their cart, start to checkout or complete a transaction — in the last five days of the season. Additionally, those retailers collected 18 percent more digital revenue share after the shipping cutoff.
Mobile is also seen helping to drive holiday BOPIS. NPD’s 2019 Holiday Purchase Intentions Survey projected that a quarter of online shoppers would use a smartphone for holiday shopping — up from 19 percent two years ago — and that these on-the-go shoppers were more likely than those using other devices, like a laptop, to use BOPIS.
- Target Reports Holiday Sales and Maintains EPS Guidance – Target
- Target CEO Brian Cornell Talks Holiday 2019 – Target
- Procrastinators abounded this Christmas. And more retailers pushed people to stores to pick up online orders – CNBC
- Adobe Rolls Out Solution to Help Retailers Deliver Better BOPIS Experience – Women’s Wear Daily
- Salesforce Reveals 2019 Holiday Digital Sales Grew 8 Percent to $723 Billion Globally – Salesforce
- Ready or Not, Here Comes the 2019 Holiday Shopping Season – NPD
- Is BOPIS over its growing pains? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Does BOPIS now offer a sizable advantage for retailers with physical stores over online players in reaching last-minute holiday shoppers? What else can stores do to further advance sales performance using BOPIS?
Poll
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Gib Bassett
Director, Solutions Marketing with Alteryx
BOPIS does provide retailers with physical stores a significant advantage over online players – assuming the retailer has an effective BOPIS program, like Target. While some retailers are doing well with BOPIS, lots are still way behind on providing an effective program. Missing product, under-staffed pick-up locations, slow order processing…the list goes on. There’s plenty of work for retailers to do in just getting the basics right.
There is no news here: BOPIS – assuming it is executed well – has always offered a sizeable and meaningful competitive advantage for physical retail. The holidays simply exaggerate that advantage via better last-minute shopping options. I fully expect the role of the store as a fulfillment option to continue to expand all year long as more people come to understand and trust the options stores represent. Retailers would be wise to invest in ensuring the process is flexible, fluid and flawless.
BOPIS is probably the smartest program retailers have come up with, as there are many advantages. It’s quick to see the benefits to the customer who can order online and then conveniently pick up in the store. But the retailer has many more advantages. Yes, it can get the customer to come into the store, which could lead to an opportunity of making more sales. Still it also allows the retailer to have less inventory at the store and only ship what a customer has purchased. Retailers who have both stores and online selling must continue to find ways of making the shopping experience the same for the customer whether they shop online or in-store, and BOPIS is a significant first step in doing just that.
I wouldn’t call it sizeable. Amazon promised same-day in certain markets so I think what you can say is that, for the week before Christmas, the playing field was level for the first time in a long time — for certain players. For those in the malls, not so much.
In my market (Portland) Prime delivery times actually went from two days to four, not the other way. Something was clearly going on in the Amazon fulfillment chain this past Christmas.
BOPIS has quickly emerged as a table stakes issue for retailers. Free-standing Target can have total vertical control over the process. But how is the mall going to accommodate this increasingly embraced shopping/buying feature? Obviously every store in the mall is not going to have its own kiosk of some kind. The re-invented mall experience has to figure out some new logistics.
There is definitely an advantage to those retailers that provide the BOPIS feature. It can be extremely helpful to the last-minute shopper or to that customer with a special situation. However, over time, consumers will become more disciplined in the way they shop and may need the BOPIS feature less often. That evolution should not be mistaken with a lack of need for the BOPIS feature. BOPIS should be here to stay, even if used less often over time.
BOPIS represents the single biggest advantage that brick-and-mortar retailers have over Amazon. Target says that a BOPIS order costs 90 percent less to fulfill than one from a traditional fulfillment center. Offering BOPIS is officially a no brainer for a retailer (although many still don’t offer it). The next big choice that retailers have to make is whether to force consumers to come into the store to pick up their order (with the hope that she adds an item or two to the basket) or whether they give her the option of curbside pickup (which is far more convenient for parents with kids in the car). Smart retailers will offer both, but provide incentives to lure the consumer into the store.
Retail stores do have the advantage of selling additional items during a store visit. But the whole point of BOPIS is to avoid additional time spent in store, so most consumers would pick up and walk away, I’d think.
Pure play e-commerce companies can bridge the gap by offering deliveries to partner locations such as coffee shops, which actually could have a better cross sell. I am surprised chains like Dunkin’ Donuts, McDonald’s and Starbucks haven’t teamed up with companies like this yet to offer pickup for e-commerce.
Shoppers want to know the product is there before they get in the car and are potentially disappointed. Why most retailers don’t understand this reasoning is that they still think it is about them saving money. It’s about the consumer being sure.
The BOPIS value proposition has not only changed how we shop during the holiday season but day-to-day commerce in general. There are clear competitive advantages and cost savings for retailers, that will drive top-line revenue while enabling companies to streamline their supply chain and leverage their stores as another e-commerce fulfillment channel.
While Target, Walmart, Nordstrom, Best Buy and many other retailers are capitalizing on the BOPIS boom, retailers will still have to have a laser focus on the fundamentals, including assortment planning, pricing, promotional strategies, in-store and digital experiences.
The customer is now in charge, period. Target is a key example of testing various approaches until settling on the one that works. Get it right and you’ll get her business.
All the evidence that shoppers are leaving it for later and BOPIS is becoming the channel of choice puts extra emphasis on getting the inventory right in the stores. If customers are relying on a store to be able to fulfill their order at the last minute before the holiday then the possibility for major failure and customer disappointment is evident.
Getting the right inventory to be able to fulfill these last minute orders while not getting left with too much inventory will separate the winners from the losers over the next couple of years.
Agreed here – if done correctly with knowledgeable associates, clearly defined areas for pickup, etc. BOPIS is a boon for retailers. I used it at Target for Christmas, and it was so much easier to pick up product up front than go through the throngs of customers to find my product, if I could find it…
BOPIS is definitely a sizable advantage to retailers with physical stores especially with last minute shoppers. Shipping takes time and costs additional money and shoppers can avoid both with BOPIS. 70 percent of shoppers still like to go to stores. BOPIS allows the shopper to know the item will be there when they arrive, and it can be picked up typically in the front of the store. This convenience will help increase sales and consequential sales that result from the shopper coming to the store. Most shoppers like BOPIS, and it will be an expectation that shoppers have of all retailers.
When is a store not a store? When you can use it as a pickup depot, a fulfillment center — and yes for browsing and buying. The new role of a store is becoming clear, and it doesn’t stop at BOPIS.
BOPIS is a growing order fulfillment option driven by convenience and last-minute shoppers. Personally I am a big BOPIS user, especially because it lets me make sure I don’t take a trip to a store only to be disappointed that the product is not in stock.
The biggest issue for retailers is the profitability of BOPIS transactions. The execution of BOPIS orders needs to have refined processes that are efficient and profitable.
Seamless returns are an additional benefit of BOPIS for retailers and customers alike. During the checkout flow, shoppers can buy more and with more confidence knowing that they will be able to evaluate the merchandise in-store and decide whether they want to keep it or not. While some merchants fret about loss of revenue due to returns, simplifying the return process leaves shoppers satisfied and more likely to remain loyal to the brand. Higher value customers are often the ones with the highest return rates, and offering a better return experience can only lead to increased AOV.
I don’t know if the advantage is “sizable,” however it’s clear that there is a large segment of shoppers to whom this sort of CX, when executed well, really appeals. That is the key takeaway IMO here. Being a shopper myself, when you procrastinate and experience at least a few delayed online purchase deliveries, the idea of getting in the car and picking up the merch you bought online becomes really appealing.
Retailers have a lot of incentive to make this a really easy experience: “82 percent of BOPIS users are likely to shop for additional items at the store.”
To that end obviously it’s important to ensure inventory is tracked as much in real time as possible and updated online and at the store level. So that the merch a customer buys is held for pickup in the store, and confirmed as such beforehand.
BOPIS is a great option for many shoppers, especially those who prefer the convenience of having others select their dry goods but still want to select their own produce, meat and other fresh items. And retailers are getting very creative with the process by offering cross merchandised items and other specials right at the point of pick up. We’ve just scratched to surface of the potential for merchandising BOPIS.
As each retailer refines the BOPIS process, it will become increasingly convenient for shoppers, and that makes it yet another viable channel for any retailer willing to dive in. This is all about process. If there are delays or inconveniences that the shopper faces, you will lose that business to a better competitor.
BOPIS certainly offers an advantage during the last-minute holiday shopping rush. Overall, it is about choices on the consumer side. Consumers are looking for convenience, cost-savings and speed when they shop — which is why Amazon Prime has been such a strong sales driver — but BOPIS offers further opportunities for retailers with many physical store locations to compete. The challenge for retailers is to manage costs and deliver the desired experience for customers. Once a customer is disappointed they are not likely to offer the retailer a second chance.
I believe BOPIS is the solution for last minute shopping. The question really is the definition of last minute. My wife and I had problems with orders we had placed well in advance of Christmas with Amazon. We ended up not waiting for a risky Amazon delivery and leveraging BOPIS at Target.
Retailers can improve BOPIS sales performance by getting rid of silos. Those legacy systems they acquired over time that are not integrated in real time but are synchronized at end of day … POS is one of the biggest issues as almost every one of the systems in retail today is not integrated in real time for inventory. They are of course real-time for credit authorization but not for inventory control.
Click and Collect or BOPIS is clearly increasing in popularity as referenced by the many statistics in the other posts here. It’s an exciting strategy to enable brick and mortar retailers to address e-commerce, and an innovative approach to give e-commerce retailers “feet on the street.” It’s especially effective for shoppers with last-minute needs.
But, as with any new retail strategy, retailers should plan and execute carefully. For example, many retailers are moving to smaller footprint stores and have had to make strategic decisions about what items to keep on the shelf and which ones to make available online. If shoppers order online for pickup and receive messages that items important to them are not available, they are likely not to use the service again.
Similarly, one advantage of Click and Collect is the opportunity to invite consumers into the store to purchase additional items. But, if they arrive at the store and there are issues such as having to wait to pick up their items or inadequate parking, again, they are not likely to use the service again. New strategies are great, but great execution will excite the shopper.
BOPIS is certainly here to stay and it has quickly become table stakes for most consumers. A big part of the value of stores is immediate access to products and using stores as a fulfillment center for customers is an important advantage for brick and mortar retailers vs online-only retailers. However, there does appear to be a growing gap in the execution of BOPIS at many retailers. This is something every retailer needs to execute flawlessly in order to realize the value of the process with customers. Otherwise what is seen as an important convenience factor becomes an experiential nightmare!
During the holidays, retailers with BOPIS have the advantage, even if online players could deliver same-day. Holiday BOPIS shopping gives customers the choice of picking up, wrapping and adding their own “personal” touches to gifting such as cards, ribbons, flowers, and more. The last minute guarantee is just as powerful, with reliability that the store has the product you’re looking to gift. Add to that the saved shipping expenses and being able to hide the gift from the recipient instead of having them spot it on the porch, retailers and customers have a win-win.
To improve BOPIS, retailers to need to optimize pick and pack, have clean inventory and up to date real time access to inventory, and have products available for pick up in convenient ways — scheduling, curbside, and more. BOPIS will continue to grow in popularity.
BOPIS is absolutely an advantage for retailers with physical stores if used effectively. It is faster, lower cost and more private (my family may open a shipment to my home before I get there) but it, most importantly, it addresses my mission-shop needs while still allowing for discovery shopping. When I know what I want to buy, online ordering is great but nothing beats walking the store for sparking ideas for the gifts I haven’t figured out yet. When done right, BOPIS allows a retailer to make mission shopping more efficient and get those people and transactions off the retail floor so the store can be set up for and used by those that are in discovery mode. If only more retailers designed their store experiences with this in mind.