In today’s climate, buy online and pick up in-store (BOPIS) options have increased dramatically in popularity. In fact, a KIBO Commerce study reported that retail customers are choosing BOPIS options as much as four times more than they did before the pandemic. That being said, the rise in BOPIS popularity is part of a larger trend. Retail stores saw increased demand for this option even before the pandemic, most notably in the 2019 holiday shopping season.
If you’ve been considering adopting a BOPIS strategy for your retail operation—or you’re interested in optimizing yours to boost your bottom line—we’ll walk you through what you need to know. We’ll start by discussing why a BOPIS strategy can offer benefits for both you and your customers, and then we’ll show you what you need to know when crafting an effective BOPIS strategy so you can grow your revenue without sacrificing your margins.
BOPIS: Benefits for Retailers and Customers Alike
The option to buy online and pick up purchases in-store can be an attractive one for both customers and retail operations. BOPIS has become a popular shopping option for consumers by giving them greater power over how they want to receive their items, as well as greater confidence around being able to lay their hands on their purchases in a short timeframe. It also appeals to thrifty consumers who would rather not pay shipping fees to get what they need.
In other words, from the consumer perspective, BOPIS can offer the best of both worlds. Customers can shop from the convenience of their homes without wasting time going to a store that doesn’t have the item they want in stock, and they can skip the wait times (and the cost!) associated with the delivery of online orders.
For retail operations, the benefits are also numerous. In addition to catering to rising consumer demand, BOPIS also:
- Creates a cheaper alternative to free shipping. Many retailers feel pressure from consumers to offer this service, which can put a strain on your bottom line, especially when it comes to last-mile shipping costs. BOPIS offers your customers an attractive alternative with higher margins for you.
- Helps boost revenue by encouraging additional purchases. Recent research found that 37% of shoppers who pick up their BOPIS orders make additional in-store purchases. Even more interesting is the behavior of BOPIS super consumers who use the service regularly: They bought more items in store 51% of the time.
- Eliminates safety and security concerns around delivery. Missing, stolen and incorrectly delivered packages can be a big cost center for online sales operations. BOPIS eliminates this problem, and, if a retail operation uses secure lockers, they can create a contactless pick-up solution that saves the cost of staff to complete BOPIS orders.
- Increase in online traffic. One major retailer who’s hopped on the BOPIS bandwagon is Walgreens. They’ve been using their pharmacy drive-thru window to fulfill BOPIS orders, and have seen a jump in online traffic of about 160% since they launched the option.
Although BOPIS offers customers and retailers benefits across the board, there is a caveat. Meeting customer demand and expectations will likely require some shifts in the way you run your operation, as well as your supply chain.
5 Ways BOPIS Orders Can Impact Your Business
If you want to take advantage of the rising trend toward BOPIS orders and move more of your sales mix toward this option, there are a couple of things you’ll need to be aware of.
1. Ensure a Good Customer Experience from Start to Finish
If your website is difficult to navigate, if your BOPIS orders aren’t ready in the timeframe promised, if your consumers have to wait in long lines to get their purchases or if they experience significant frustrations at any point along with their BOPIS experience, they’re simply not going to use your BOPIS option. (And they may choose one of your competitors instead!)
Make sure you review your BOPIS experience from start to finish from the consumer’s perspective. That way, you can be confident it’s one your customers will want to use so you can stay competitive in this landscape.
2. Evaluate Your Inventory Management System
If you begin encouraging your customers to use the BOPIS option, you’ll need to make sure your inventory system is up to the challenge. For example, does your inventory system quickly communicate cross-channel between your online store and your brick-and-mortar locations? For example, if an in-store customer buys the last iPad you have in stock, does the website immediately register that model as “out of stock?” If not, you may create some seriously frustrated customers, erode trust, and unwittingly send them running to a competitor.
In a recent survey, 36% of retail operations reported challenges with syncing online and in-store inventory. If this is a challenge you’re experiencing, get the wrinkles ironed out before you go big on BOPIS.
3. Reconsider How You Manage Stock Levels
Along the same lines, if your operation begins to rely more heavily on BOPIS orders, you may need to change the way you manage your inventory levels in your stores. If you don’t have full transparency into your inventory, this can get especially tricky.
Ultimately, you’ll need the ability to restock quickly, especially if BOPIS orders increase demand for certain items. This might mean moving more inventory to stores, as opposed to keeping it within a centralized distribution center. You’ll also have to decide how to balance your in-store stock versus your online orders. Are there scenarios in which you’d prefer to keep an item on the shelf, or would you be comfortable selling that final item to a BOPIS customer? You’ll have to decide on a mix that accommodates both your in-store and your BOPIS customers.
4. Create and Manage an Effective BOPIS Operations Flow
More BOPIS orders mean staff to pick orders and fulfill them. It also means establishing in-store space for pick-up of these online orders, a challenge that looms large for 44% of retail operations who responded to a recent survey.
These are all issues that can impact your margins, so you’ll want to consider them carefully. If you decide to use floor space to accommodate in-store pickups, will you be cutting into in-store sales by reducing display areas? If you handle in-store pickups through your customer service desk, will you be putting your BOPIS customers through frustratingly long lines? And how will you balance the speed of fulfillment with the cost of dedicated staff to BOPIS orders? These are all items you’ll want to consider carefully as you craft your BOPIS strategy.
5. Be Prepared for BORIS
Finally, more BOPIS orders can mean more returns, also known as BORIS (buy online, return in-store). While 5-10% of in-store purchases get returned, this number can rise to somewhere between 15-40% for online purchases. This can be especially true for clothing since people often order multiple sizes and return the one that doesn’t fit. With many dressing rooms closed during the pandemic, customers may take their purchases home, try them on, and return unwanted items to the store.
In a UPS survey, customers cited returning online orders to stores as faster (53%) and more convenient (41%). If your store plans on more online orders, whether they’re being fulfilled through in-home delivery or pick up in-store options, plan accordingly for the costs to accept and process these returns.
A 3PL or a Freight Forwarder Can Help
If this list of considerations has raised more questions for your operation than answers, you might want to consider a conversation with a 3PL or a freight forwarder. An experienced professional can help you effectively manage your supply chain to accommodate your BOPIS strategy. For example, a 3PL or freight forwarder can assist you with items such as:
- Maintaining a steady flow of inventory, which is especially important to Hawaii businesses who rely on shipping modes with longer lead time, such as ocean freight.
- Setting up an inventory management system that syncs across channels and manages items down to the SKU level.
- Negotiating lower shipping rates for the increased volume of business, due to increased BOPIS orders.
And that’s just the start. By bringing in some expert help, you’ll be able to optimize your supply chain to meet customer demand and increase your revenue, all while protecting your bottom line. This will allow you to get the best of BOPIS while ensuring the long-term financial future of your business.
If you want to talk to a supply chain and inventory management expert, just reach out to us. We’d be happy to schedule a complimentary consultation to better understand how you currently sell to your customers—and how we can help you get the most out of your BOPIS options. We’ve helped many of Hawaii’s businesses navigate this landscape, and we can help you, too.