Photo: Target
Is BOPIS over its growing pains?
According to a test of 137 retailers on Black Friday, the average processing time for BOPIS orders was 2.5 hours and 85 percent of orders were fulfilled with no issues. That marks a significant improvement from last year’s results: 3.6 hours and 65 percent.
The average in-store wait time for pickup was four minutes, according to the study from Kurt Salmon.
“Historically BOPIS was a difficult transaction for the customer, whereas now retailers have built ease and convenience into the experience by placing kiosks at the front of the store and allocating parking spaces,” said Steve Osburn, managing director at Kurt Salmon, in a statement. “We are seeing many retailers honing their competitive agility and excelling in terms of speed, visibility into inventory and the ability to fulfil last minute orders.”
The improvement is more impressive given that BOPIS use is exploding. According to Adobe Analytics, BOPIS orders are up 47 percent so far this holiday season, similar to gains seen through the entire season last year.
Surveys show the two primary BOPIS consumer drivers are getting product sooner than delivery by mail and saving money on shipping costs.
For retailers, the instant gratification from seamless in-store pick-up is a major competitive advantage to online selling. BOPIS activity is expected to particularly pay off during the holiday season’s final days.
A major secondary benefit is the fact that the majority of shoppers who pick up make additional purchases in store.
A Signifyd study from last year found 83 percent of retailers indicating that BOPIS orders accounted for at least 20 percent of online revenue. At Home Depot and Michael Stores, BOPIS makes up more than 40 percent of online sales.
Kurt Salmon’s findings suggest investments in pickup counters, curbside pickup, lockers and dedicated parking spots are paying off, while inventory optimization and in-store execution also appears to be making progress. According to the Signifyd study, 45.6 percent of retailers identified logistics and inventory tracking as the biggest challenge to managing BOPIS, followed by training and managing store workers, 22.4 percent; and fraud and customer information security, 16.1 percent.
- Fastest retailers fulfill orders in fewer than 2 days – Retail Dive
- There’s never been this kind of surge in last-minute shoppers picking up online orders – CNBC
- Holiday Analysis Shows Retailers Have Improved BOPIS and Shipping Performance – Footwear News
- Most BOPIS shoppers make additional purchases in store – Retail Dive
- Research: 2019 Holiday Shopping Trends – Commercehub
- Buy-Online-Pick-Up-In-Store (BOPIS) – Signifyd
Discussion Questions
DISCUSSION QUESTIONS: Have retailers figured out BOPIS or does it still faces execution challenges? Can you think of ways retailers can further capitalize on the advantages BOPIS offers versus online selling?
Poll
BrainTrust
Zach Zalowitz
Founder, Salient Commerce Consulting
Jasmine Glasheen
Content Marketing Manager, Surefront
Actually, 2.5 hours isn’t so great. A friend of mine reports that people were arriving to pick up their BOPIS orders long before they were picked. He fixed the problem, but how many are there like this? Not everyone is buying TVs. Some people are buying things they expect to be ready basically immediately.
There’s a long way to go. And lots of profitability opportunities await.
There are two answers here: The retailers that are excelling at it are crushing it. KSA’s average wait-times are maybe weighted, given that leading retailers have the pickup occurring within a minute to two, while I imagine others are taking much much longer. The difference is a lack of planning and unwillingness to adopt changes to stores and online policies to create a truly “fast and convenient” BOPIS experience. It’s also unclear how that four-minute pickup takes into account self-serve pickup vs. counter/cash-wrap pickup vs. “Hold on I’ll get it for you from the back.” My point? BOPIS hasn’t been standardized into what best practice really is yet, and as a result we’ll continue to see large swings in pickup times and experiences. One thing for sure is that the ones that excel in “fast and convenient” will reap the rewards.
I think some retailers implemented BOPIS without really thinking about the infrastructure and people needs. 2.5 hours is not good…
Judging by the general lack of a steady flow of BOPIS customers filling up the designated parking spaces for this offering, I’d say this is still a small percentage of overall business. That must mean that there is still room for improvement. Retailers must constantly study the obstacles to drive more revenue in this channel.
Clearly BOPIS has the opportunity to be a welcome game-changer for both shoppers and retailers. However, while BOPIS may work well for big-ticket items for the holidays, it has yet to be proven as a sustainable model for day-to-day shopping items. 2020 will be a big “show me” year for BOPIS in terms of operational efficiency and fit for retailers.
Retailers may have figured it out but I doubt that all who do it have removed the kinks from the process. Delivering the orders to dedicated help for picking is paramount. If the product requires wrapping, add that to the list of obstacles. If the store does not have someone tending the pick-up counter, you can add more height to the obstacle. I have faith that those retailers that are not already doomed to bankruptcy will get it right.
I’ve stopped by my local Target a couple of times to watch people park, walk in, and then walk out within five to 10 minutes with their package. Of course I have no idea when the order was phoned in, but it seems that when it works smoothly, it’s a pretty painless scenario. When painless is the expectation, but pain is the reality, I can only imagine that the BOPIS shopper thinks twice before trying another BOPIS scenario, or at least trying it again at that same location.
Many of the early hiccups have indeed been overcome and BOPIS has become a vital part of most brick-and-mortar operations. Customers have become accustomed to the process and are increasingly taking advantage of its convenience. I applaud efforts by many retailers to eliminate hurdles and improve the interaction.
In my opinion, challenges remain. Ensuring that shoppers are adding additional items to their basket or visiting the physical aisles will require unique invitations and in-store theater. Retail employees who represent the operation will require exemplary customer service training and strong communication skills. And consistency across the entire experience/operation must become a key focus.
I used BOPIS a lot this year for my Christmas shopping. In many cases my order was ready within an hour, many times sooner, and pick up was easy. I agree with the survey that getting product sooner and saving in shipping costs is important. I would add shipping materials to this list – I cringe at the pile of boxes and plastic sleeves we accrue when shopping online.
An interesting aside, I forgot to pick up a BOPIS order at Old Navy. They sent a reminder email, and when I still didn’t come in, my order was politely cancelled and my credit card was automatically refunded. That’s good business.
Retailers have figured out the mechanics behind making BOPIS work except for one area that still needs focus and that is having the product inventory in-store to satisfy the BOPIS order. The article pointed out that 15 percent of BOPIS orders still have problems and some of that problem is undoubtedly due to lack of store inventory. Better in-store inventory tools such as the use of RFID-tagged items will help this problem area.
Another area where BOPIS can be improved is store product analytics that can correlate sales between store items predicting which items sell with others to ensure the retailer has the correlated items when the consumer shows up for her BOPIS order.
As with many things, BOPIS will come to a tipping point where the retailer’s volume justifies having a BOPIS team that not only staffs the pickup counter but selects and brings the items to a storage area behind it.
My expectation is that the lack of a dedicated selection team or the team not having enough members creates the lag between the order being placed and the time that it is ready for pickup.
Participants at the Store Operations Council meeting report that there are multiple opportunities, but many obstacles. These are particularly obvious for stores that sell huge, heavy items, or tiny ones like makeup pencils. The way forward is still trial and error.
BOPIS of all things has been featured on prime time morning commercials during the holiday season. Companies such as Target, Walmart, Kohl’s, Best Buy, and Nordstrom are leading the charge and plenty of other retailers are playing catch-up. While BOPIS is being featured prominently, all services including lockers, curbside pickup, assisted counter service, etc. are socialized prominently across the storefront.
Potentially, the BOPIS value proposition could be the glue that ties together the omnichannel digital/physical customer experience commitment that retailers have touted for years. However, it all comes down to execution, which includes having the right operations in place, from a people, processes, and technology perspective.
Simply put, a 2.5 hour and 85 percent fulfillment completion rate is not acceptable. With the right infrastructure, and the right data and analytical insights, retailers could dramatically improve going into 2020.
There has been a noticeable improvement in BOPIS order processing and fulfillment, but many retailers need better processes. The average of 2.5 hours to pick orders is not impressive. It could lead to potential out-of-stock situations if a customer in the store picks the item before it is picked for the BOPIS order. If the retailer isn’t factoring in safety stock for BOPIS orders, some customers could be very disappointed.
The average lead time for processing orders of 2.5 hours is also problematic for customers like me who expect it to be processed in five minutes or less. If I am in a store where all of the associates are busy, I may decide to buy the product online for pick up in the store if it is a product that is in the backroom. In this case, I would be extremely upset if it took longer than 10 minutes.
BOPIS is a significant opportunity for brick-and-mortar retailers and its continued evolution is critical as these formats actively compete with the pure online retailers.
The most telling statistic in this article is “the fact that the majority of shoppers who pick up make additional purchases in store.” Going forward, the challenge to BOPIS will be to develop an execution strategy that gets customers into the store while engaging in BOPIS. Shoppers use their eyes and the number of items in their carts as surrogate resumes of spending. Despite the recent BOPIS purchase, the shopping cart is empty when entering the store and the shopping trip is re-calibrated. This is a terrific opportunity for additional non-planned, potentially high margin purchases.
BOPIS makes all the sense in the world for the shopper. However, operationally for the retailer it is the antithesis of fast convenient, efficient operation. The retailer should think about the fast food drive-thru in order to see how it should work.
Sure, I would like the shopper to go in the store to pick up their order and buy something else, but that is not why the shopper chose BOPIS. Make it fast and easy.
And as much as possible, keep the pickers off the floor. Big items work. They come out of the inventory and not off the floor. But multiple small items only clog the way for those who are shopping.
BOPIS is just getting started. Retailers have started to figure out that it truly provides a powerful incentive for many customers – and retailers are finding ways to optimize it within their store and distribution structures. Many of these structures are highly unique with requirements from warehousing in offsite locations, integrated inventories, attribution and updating of in-store inventories and in-store pick and pack for the customer. None of these are trivial and as BOPIS gains traction, retailers will continue to build experience. The biggest factor for BOPIS still comes down to price across the year and availability during holidays. The challenge for retailers will continue to be maintaining availability of products locally when customers want them. Watch for AI to become a differentiator here.
While many retailers have improved greatly, there are still many who have a long way to go in sorting out their inventory tracking and management to be able to offer acceptable BOPIS service. Customers will become disenfranchised very quickly if they do not get good availability whether that is in store, online or BOPIS. It is essential that retailers get this right before they make BOPIS a major part of their go-to-market strategy.
The next problem comes when BOPIS is so successful for a retailer that it impacts their operating ability at the store. In the U.K., a major retailer last year had so many BOPIS orders delivered to their stores for collection they struggled to keep their stores operating at peak time. The operation needs to be well planned and thought through, especially at peak trading times like Christmas.
It’s about time. We showed a very large retailer our BOPIS study six years ago and were told, “yeah, we know.” But it wasn’t until this last year that they started to execute it en force. That kind of delay is what drove Amazon’s revenues up $100 billion in the last three years. Let’s hope the next BOPIS/customer convenience element draws a faster effort to execution in the future and that the 100 pound lesson has been learned.
BOPIS is an essential part of the store of the future. Next-gen consumers demand it. Consider that 58 percent of Gen Z customers have already used BOPIS and many of them don’t even have credit cards yet. This is a core area where retailers can set themselves apart by refining the experience. Secret shoppers, anyone?
It’s good to see year-over-year progress in BOPIS stats, but there are still big opportunities to improve supply chain, sustainability and upselling.
In a recent analyst call, I was asked any key differences from last holiday to this holiday and the one area that was noticeable is BOPIS. Many retailers have put the back-of-house IT infrastructure, resources and labor hours into making the process seamless at the store level. Agree, that we have a long way to go but this year has been a “significant positive increase in experience level than last holiday.”
I am optimistic about the future of the BOPIS program being widely embraced within the retail sector.
The Best in Class retailers are excelling at speed, accuracy, communication, and convenience.
There are still too many retailers who are playing catch up and or are just starting to implement this offering to their guests. BOPIS is now considered a must have with most of the population.
I am looking forward to seeing how retailers improve their execution in 2020.
The key for retailers is not just to make BOPIS efficient and profitable, but to make ALL online transactions efficient and profitable because shoppers want multiple fulfillment options. One week they may want to pick up the order and the next week they want a delivery. And the retailer needs to know the shopper’s preference in each case so they can cross-merchandise and build out profitable recommendations.
Providing flawless BOPIS (and BORIS, buy online and return to store) are critical elements of providing a remarkable harmonized (my preferred term for what others called “omnichannel”) customer experience for many, if not most, retailers.
It’s shocking that it’s taken so long for retailers to prioritize this, particularly as it is rapidly becoming table stakes. Those that started early (Nordstrom comes to mind) are way ahead. Others are playing catch up. They should hurry.
Few, if any, retailers that I am aware of are not experiencing growing pains, some quite significant. But there are really two kinds.
The first face those that failed to understand this opportunity when they should have and are rapidly trying to close the gaps. If they missed this, they are probably laggards on other dimensions of digital disruption as well. So they’re busy and chances are they will stumble along the way.
The second, which affects laggard and leaders alike, is the sheer volume of orders that stores are seeing and the inevitable growth that will continue for the foreseeable future. Depending on the relative volume and particular store layouts, the degree of physical change can be significant, as are the staffing and process challenges.
Those that are further along the experience curve are likely to face fewer growing pains, but the struggle is real.