If you’ve heard that BOPIS (Buy Online, Pick Up in Store) is an unpopular fulfillment model that customers generally don’t favor, the numbers may surprise you.
According to Statista, the U.S. click-and-collect market is forecast to surpass $150 billion by 2025, more than doubling from pre-pandemic levels.
The convenience and flexibility of BOPIS is here to stay. Buy online, pick up in-store offers the best of both worlds for shoppers and retailers alike.
In this guide, we’ll explore the components of a winning BOPIS strategy, its advantages, and its challenges. We’ll also look at a few examples of businesses that have successfully implemented the model.
In this post:
● What is BOPIS?
● How does BOPIS work for retail?
● How does BOPIS work for customers?
● Advantages of providing BOPIS for retail businesses
● BOPIS challenges for retailers
● Examples of BOPIS
● Is BOPIS right for your business?
What is BOPIS?
Buy Online, Pick Up in Store is a retail strategy that allows customers to order products online and collect them from a designated store location. BOPIS offers convenience, speed, and cost savings for shoppers and retailers, making it a win-win multichannel strategy that connects ecommerce and physical retail.
How does BOPIS work for retail?
BOPIS fulfillment is a convenient and flexible option for customers who want to shop online and pick up their orders in-store. Here’s how the entire process works:
- Browse the seller’s website: Customers browse the retailer’s website or app, exploring products and their availability.
- Check inventory in real time: Buyers check real-time availability of products at preferred store locations. This ensures desired items are in stock.
- Finalize the online purchase: The customer pays for the selected items online and then receives a confirmation email or SMS. This message contains order details and pickup location.
- Fulfill the BOPIS order: The retailer prepares items for pickup after the order is placed. These are retrieved from the shelves, inventory, or warehouse. They’re then packaged and brought to the designated BOPIS pickup area.
- Retrieve the order in-store: Customers visit the physical store at their convenience to collect the order. Some retailers even offer curbside pickup.
While BOPIS offers many benefits for both customers and retailers, it also requires retailers to have:
- Accurate and updated inventory management systems
- Efficient order processing and packaging workflows
- Well-organized store layouts
How does BOPIS work for customers?
The rise of BOPIS in retail marketing is driven by customers who appreciate its convenience and flexibility. According to Shopify data, 59% of consumers are interested in BOPIS-type shopping options. Here’s how (and why) it works for consumers:
- Convenience: Customers can shop online at any time and place, and then pick up their items at a nearby store. They don’t have to wait in line or search for products in-store.
- Immediate product availability: Real-time inventory visibility helps customers ensure that desired items are in stock before visiting the store. This saves time while reducing disappointment or delays.
- No shipping costs: Customers who opt for BOPIS avoid shipping or delivery fees by directly picking up their items in-store.
- Flexible pickup times: BOPIS grants customers the flexibility to choose a pickup time that aligns with their schedule. Retailers often allow a certain time frame for collection.
- Contactless experience: As customers spend less time in-store with BOPIS, they reduce their exposure to other people and potential health risks.
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Advantages of providing BOPIS for retail businesses
Providing a buy online pick up in store option offers many benefits for retailers and customers alike. Let’s first take a look at what retailers can expect to gain from the increased adoption of BOPIS:
- Increased sales: Having shoppers visit your brick-and-mortar store is an excellent way to increase cross-selling opportunities. According to one report, 80% of customers who use BOPIS shop for other things while they’re picking up their orders—a huge potential source of additional revenue. On top of this, you are likely to see a drop in your cart abandonment figures, too. Unexpected shipping costs are the main reason why customers leave their carts without completing a purchase, so giving shoppers the option to skip shipping entirely and simply pick up their order at their leisure is sure to help reduce this painful problem.
- Lower shipping expenses: Shipping is expensive for retailers too, especially last-mile deliveries to customer’s doors. An overall reduction in local shipping expenses and logistical requirements means that you can focus more on competitive international shipping options, expanding your reach into other markets.
- Integrated inventory management: BOPIS requires a complete inventory management system to enable you to show product availability in real-time. With in-store and online inventory merged into one system, you can have more control and better access to your entire stock, have your staff trained to find and move stock quickly to where it is needed, and have a perfect synchronization between what is on your shelves and in your distribution center.
Sounds good, doesn’t it? But that’s only half of it. Let’s look at the ways that your customers benefit from BOPIS, too.
- No shipping costs: This is a big one, especially for smaller purchases where shipping can often cost more than half of the price of the product itself. Shipping fees are very often the biggest barrier to shopping online, so with this removed, shoppers will be much happier making quick, convenient purchases on their PC or mobile device. In fact, 35% of consumers say they prefer picking up items in-store because it allows them to avoid shipping fees.
- Faster service: Despite an increase in express shipping options, BOPIS offers a speed and convenience that shipping companies cannot match. Customers like to be able to get their orders as soon as possible, so the ability to head immediately to the pick-up point to receive their products in a matter of minutes is a major advantage. BOPIS also avoids the problem of missed/rearranged deliveries and offers safety and security that the package will not be damaged/stolen during shipping.
- Better customer experiences: Overall, BOPIS provides customers with the convenience of shopping at home without the lengthy waiting, cost, and uncertainty of shipping. Customers can pick up their items at a time that suits them while avoiding the crowds and queues that often come with shopping in a brick-and-mortar location. They’ll also have the opportunity to open, check, and test out their product before taking it home, allowing for instant, hassle-free returns.
Does BOPIS increase sales?
Yes, BOPIS increases sales. For example, Best Buy reported that 44% of its online sales in one quarter were picked up in stores, contributing to higher conversion rates and larger basket sizes. The ease and convenience of BOPIS lead more customers to buy online more often. This benefits your bottom line as a retailer.
BOPIS challenges for retailers
Implementing an effective BOPIS ecommerce strategy can present omnichannel retailing challenges for retailers:
- Operational challenges: Real-time inventory accuracy across all channels is needed to avoid stock-outs or overstocking. The order fulfillment process must be optimized to reduce the time between online order placement and in-store pickup.
- Infrastructure costs: Investment in new technologies like ecommerce platforms and inventory management software is necessary to enable BOPIS. These initial costs can be a barrier for some retailers.
- Customer experience: There’s a need for consistent and high-quality service levels during the pickup process. Any delays or errors during pickup can negatively affect customer satisfaction and loyalty.
- Security concerns: Retailers need cybersecurity measures to protect customer data and online transactions. It’s also necessary to verify the identity of BOPIS customers to prevent theft or loss.
- Communication and returns: Timely communication on the order status and readiness for pickup is crucial. Additionally, there should be clear and flexible policies for managing returns and exchanges.
Examples of BOPIS
Which companies are setting a good example for the successful implementation of BOPIS? Let’s check out a few who are leading the way in this rapidly expanding retail strategy:
- Lululemon — BOPIS, with curbside service, ready in 2 hours
- Best Buy — BOPIS was responsible for 60% of orders in Q1 22
- Nordstrom — BOPIS has driven as much as two-thirds of digital sales
- Petco — BOPIS curbside service gives a 25% discount on orders over $50
- Lowe’s — Over 60% of orders are picked in-store using one-time barcodes
1. Lululemon
Lululemon has BOPIS that is easily available through its website app, allowing shoppers to pick up their orders at a local store in two hours. There is also a curbside service for fast and easy contactless pickups.
The shopper selects in-store pickup when making their order, finds their closest store, and is automatically sent an email informing them of the available times. They make their pickup by presenting the confirmation email or their ID.
2. Best Buy
60% of Best Buy’s online orders in the first quarter of 2022 were fulfilled by its stores, either through in-store or curbside pickup, ship-from-store, or delivery by store employees.
To achieve such efficiency, Best Buy redesigned its store layouts to optimize the flow of online orders. It moved its in-store warehouse closer to the curbside pickup area and the BOPIS lockers.
Best Buy also has a clear policy for BOPIS orders. Customers have five days to pick up their items or request an extension. Otherwise, the order is canceled and refunded. This helps Best Buy to manage inventory and avoid holding products for too long.
3. Nordstrom
Nordstrom was an early adopter of BOPIS, which it called Nordstrom Local, and is reaping the benefits. In 2019, half of its digital sales growth came from order pickup, rising to two-thirds of digital sales growth in its most advanced regions, such as Los Angeles.
“Leveraging existing store assets and digital capabilities enabled us to implement their shared inventory approach without making additional material investments,” explained co-president Erik Nordstrom.
“Order pickup is our most profitable transaction. This represents a meaningful opportunity to increase convenience for customers during the holidays and at a lower cost for us.”
4. Petco
With over 1,500 stores all across the USA, BOPIS is the ideal solution for a company like Petco. After rolling out the service in 2018, the pet retailers quickly received more than 100,000 BOPIS orders, increasing their ecommerce revenue and number of new customers by more than 5%.
Since the COVID-19 pandemic, Petco has adopted a curbside service with a 25% discount on orders over $50. When the order is ready, the customer receives an email with a number to call for curbside pickup. They ring the number on arrival, and the order is brought out to the customer’s car.
5. Lowe’s
This home improvement giant brought its BOPIS strategy together by providing 88,000 smart mobile devices to all of its stores, giving them the capability to process BOPIS orders with an average of just two digital scans. They have also recently rolled out an area of pickup lockers in all of their stores, providing an even safer way of collecting same-day orders.
Shoppers can access their products with a one-time barcode, which is sent via automated email confirmation when their order is fulfilled. This means that customers don’t have to wait in lines for the lockers, and it keeps the entire interaction quick and touchless.
“Our number one priority is making sure we are keeping things safe for our associates and customers while continuing to provide additional options to make it even easier to shop with us,” said Joe McFarland, EVP of Stores at Lowe’s.
“With more than 60% of online orders picked up in our stores, this gives our customers one more option and the added convenience and flexibility to control how and when they get that order.”
Is BOPIS right for your business?
For most retailers today, implementing a BOPIS retail strategy is critical. It helps you remain competitive while driving sales growth.
The buy online, pick up in-store model also delivers convenience, flexibility, and the immediacy that customers increasingly expect.
Despite potential challenges around inventory, fulfillment, and costs, the benefits due to BOPIS make it well worth the investment.
With smart omnichannel integration, seamless execution, and a customer-first approach, BOPIS can help future-proof your retail business.
Source from Omnisend
Disclaimer: The information set forth above is provided by omnisend.com independently of Alibaba.com. Alibaba.com makes no representation and warranties as to the quality and reliability of the seller and products.
