As the retail apocalypse narrative settles into something less “end of days” and more “evolution,” merchants realizing the power of brick-and-mortar are doubling down on stores and investing in ways to optimize their real estate investments while keeping their customer focus first.
The biggest ones are making omnichannel central to their strategies, positioning their fleets as fulfillment centers that incentivize shoppers to pick-up their online purchases in store. The options are expanding beyond the now-standard buy online, pick-up in store (BOPIS) approach to allow customers to retrieve their e-commerce orders inside a shopping mall (referred to as BOPUM). Shoppers, for their part, like the convenience of getting their items in as little as two hours versus watching the calendar flip from one day to the next before an online order arrives at their door. And store-based pick-up comes at no cost to the shopper compared to possible charges for direct-to-consumer delivery.
Central to the renewed focus on the store: leveraging BOPIS helps merchants maximize profitability across brick and mortar. In its just-released research report on U.S. retail’s investments in new fulfillment methods including BOPIS, Coresight Research cites a December 2018 finding from British click-and-collect firm Doddle that shows 85 percent of people going to a store to take home their online purchase also pick up a few more things along the way.
Just more than a quarter (27.5 percent) of U.S. retailers enable in-store pickup of online orders, per OrderDynamics research cited by Coresight, but they’re using it to their advantage. Walmart leads as the most popular BOPIS-enabled retailer, as 50 percent of surveyed online-to-offline consumers have retrieved a package from one of the Bentonville, Ark.-based company’s stores, while 34 percent have picked up from second-place Target, according to Coresight.
RSR Research, the retail technology research and consulting firm, confirms that merchants taking a bullish view on their stores as central to the commerce ecosystem outperform peers in year-over-year sales.
In its 12th annual benchmark report investigating the state of the store, RSR found that these winners—i.e., retailers with stronger sales versus underperformers—said adding more store-based fulfillment options (56 percent), finding ways to more efficiently satisfy e-commerce orders from stores (43 percent) and offering more incentives for BOPIS shoppers navigating stores, are among the best ways to optimize brick-and-mortar.
Relative to so-called laggards, RSR’s retail winners queried about the employee-facing technologies they believe are of the highest value, ranked in-store fulfillment solutions (78 percent vs. 64 percent), real-time in-store cross-channel visibility (70 percent vs. 43 percent), and similar visibility for customer orders regardless of channel (68 percent vs. 48 percent), above options like POS upgrades and workforce scheduling.
BOPIS adds significant value to the retail enterprise but operationalizing it remains a challenge. The obstacles range from properly training staff on new procedures (22 percent) to tracing inventory and tracking items through the logistics process (46 percent), Coresight noted. Most now understand BOPIS’s place in the retail business as only 6 percent don’t believe the fulfillment strategy earns back its costs.
As the retail landscape continues to shift, BOPIS will be key to the central role of stores in a channel-agnostic world.
“There’s no doubt that stores will be an important retail asset for years to come,” RSR said in the report. “While once thought of as a liability—a money pit where working capital was tied up in inventory and expense was eaten by customer-facing employees—they are now most clearly seen as profitable assets across most retail verticals.”