Think Tank: How Retailers Can Develop a More Sustainable BOPIS Strategy

Arthur Zaczkiewicz and KC Fox

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Omnichannel fulfillment of online orders is no longer a differentiator, it’s the status quo — especially when it comes to buy online, pick up in-store programs.

A recent study from NAPCO Research reveals that 92 percent of retailers now have a BOPIS program in place, while an additional 5 percent plan to launch one in the next 12 months. Given the relative newness of BOPIS offerings, this high adoption rate reflects the value-add of these programs to the retailer — in addition to growing digital business, these programs present an opportunity to drive in-store traffic and capitalize on incremental sales in the process.

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Consumer adoption for BOPIS has been equally swift. Sixty-seven percent of shoppers in the U.S. have used BOPIS in the past six months, while 50 percent of consumers stated they made the decision about where to shop online based on whether they could pick up their order in-store. Additional research from Bizrate Insights found that 22 percent of omnichannel shoppers have made an additional purchase when they picked up an online order in a store.

While BOPIS availability is now mainstream, many retailers are still struggling with execution as they adjust to this rapid adoption. Inventory and operational challenges plague BOPIS programs, making it difficult to fully maximize sales. Many vendors are lacking a sustainable strategy that meets consumers’ high standards. Today, securing a competitive differentiator requires going beyond simply offering BOPIS — it’s about which retailers are doing it right.

The top BOPIS challenges keeping retailers up at night

BOPIS bottom-line benefits are significant, but only when executed properly. The potential backlash if a customer is not able to pick up their desired item in-store is substantial. At a minimum, retailers must ensure product is physically at the store, and that inventory hasn’t been allocated to another customer. Without accurate inventory management, retailers risk losing a valuable customer for life.

With stakes being so high, the importance of addressing BOPIS inventory management challenges is well understood. Ninety-three percent of respondents in the NAPCO Research survey reported that they placed a significant or moderate focus on inventory accuracy when developing their BOPIS program.

Oftentimes, this requires retailers to reexamine their legacy technology solutions, such as order management systems, to ensure they can enable such robust omnichannel fulfillment strategies. Thirty-six percent of retailers today ranked synching online and in-store inventory as an obstacle for BOPIS success, and 22 percent reported that their legacy technology system was not sophisticated enough to meet new omnichannel demands.

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Retailers know they must invest in new technology for inventory management to make BOPIS work, and it’s already an area they are focusing on. Yet, a true omnichannel strategy requires thinking outside the box to encompass the impact of in-store operations.

For example, only 35 percent of respondents said store design was a significant factor for their BOPIS program. But when asked about the top BOPIS challenges, retailers cited speed and lack of space over any other answers – both in-store operational problems. Training in-store associates to fulfill online orders was another in-store obstacle that ranked in the top five. Execution is clearly the most common pain point, as stores weren’t originally designed for fulfillment of orders and BOPIS has added another layer of responsibility to the store associate’s role.

Beyond inventory and in-store challenges, 30 percent of vendors also cite lack of customer awareness for BOPIS as a major obstacle. This is different from demand – once shoppers know BOPIS is an option, they go all-in (for example, 75 of consumers who have used BOPIS say they are likely to make additional BOPIS purchases). The challenge is simply alerting shoppers that BOPIS is an option at a particular location. This indicates the importance of marketing in championing new omnichannel offerings.

BOPIS best practices

For retailers looking to maximize their BOPIS investment, identifying the key metrics to measure is the best starting point. Companies must first determine what they hope to accomplish with the program — from increasing online conversion rates to growing in-store order values, reducing/removing carrier costs, or ultimately increasing customer satisfaction by providing them choice.

By focusing on business goals from the start, retailers can ensure that BOPIS programs are designed to accomplish company-wide objectives. Sourcing insightful analytics and reporting is the key to measuring the success of these programs, which is why it’s so crucial businesses establish set processes for data collection. Without this insight, retailers might as well be flying blind.

Oftentimes, it’s best to start out with a pilot program focused on a limited number of stores. This helps retailers identify internal operations challenges ahead of time, and rethink store layout, placement of inventory, and pick processes before rolling out BOPIS to all brick-and-mortar locations. Savvy retailers are even future-proofing their BOPIS programs by considering operational strategies that aren’t as much in play today, such as drive-up services with curbside locations and more parking to accommodate grab-and-go buyers. Piloting the program in select stores first also allows companies the time they need to test different marketing strategies and channels, identifying what resonates best with their target audiences.

Employee education is another crucial component of BOPIS success. Forty-six percent of retailers report they are training store associates around BOPIS, and 35 percent say they are actively incentivizing these employees for fulfillment of online orders. Retailers are also finding success when they think beyond in-store associates to also include training programs for customer service representatives. These representatives are facing new workflow challenges with BOPIS and require specific training and approved messaging to properly address BOPIS-related contacts. Retailers should ensure that they have clear operational procedures defined and documented for customer service representatives.

At the end of the day, it’s investing in the right inventory technology that is the foundation for a well-executed BOPIS operation. When asked how they are overcoming BOPIS challenges, 43 percent of retailers reported they invested in technology systems. Intelligent order management systems and in-store fulfillment technology are the keys to solving the inventory puzzle and making sure shoppers go home happy. Retailers should invest in tools that offer an enterprise-wide view of inventory, with visibility throughout the supply chain as well as an easy and intuitive user interface and workflow for store associates.

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The “secret sauce” for a sustainable BOPIS strategy involves relying on a combination of people, processes and technologies. Each is crucial to the customer experience — without technology to assist with inventory, the customer will leave frustrated and immediately turn to a competitor who has the item in stock. Without effectively trained store associates, the customer’s loyalty begins to waver. If retailers lack cross-department BOPIS processes and collaboration, shoppers may not even realize they can pick-up in-store and will choose another vendor.

For many retailers, BOPIS adoption was incredibly rapid. Now, it’s time for brands to take a step back and invest in the best practices that will set them up for omnichannel success in 2020 and beyond.

KC Fox is senior vice president of technology services at Radial.

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