22 Sep An Overview of how the BOPIS Retail Strategy is Transforming the Industry (2021)
Buy Online, Pickup In-Store (BOPIS) retail strategies offer enormous upside for retailers and customers alike
Major retailers survived 2020 by transforming how they got their products into customers’ hands.
Instead of only shipping to customers’ homes, retailers let online customers shop from their local and online store’s inventory and pick up their orders from their closest brick-and-mortar location the same day.
A retail fulfillment process that is known as BOPIS — Buy Online, Pickup In-Store.
During the pandemic, BOPIS retail fulfillment options kept businesses running while limiting person-to-person contact – which was essential during the pandemic.
Evidently, BOPIS retail fulfillment strategies aren’t just temporary fixes for social distancing. With increasing popularity among consumers, BOPIS ‘success last year just accelerated what was already happening.
In fact, it can even be viewed as the natural evolution of omnichannel retail — the ultimate blending of online with brick-and-mortar. So, if it isn’t already. BOPIS should be part of your retail business’s future.
To provide additional insight for retailers who haven’t yet embraced BOPIS and even for those who have, we’ve prepared this guide where we will answer questions such as:
- What is BOPIS
- How does BOPIS work
- Why do today’s customers prefer this fulfillment option
- What benefits BOPIS offers retailers
Adopting BOPIS can be challenging so we’ll explain how you can successfully merge your online and physical store operations.
What is BOPIS?
BOPIS is the most common acronym you’ll see, but you may come across these other variations:
- BOPAC (Buy Online Pickup At Curb): Focuses on the outside handoff. Customers stay in their vehicles at designated parking spots, and employees bring their purchases out to the car.
- BORIS (Buy Online Return In-Store): Concentrates on reverse logistics. Turning your storefronts into local return centers gives your business advantages over purely online competitors. This increases foot traffic and potential upselling or cross-selling.
- ROPIS (Reserve Online Pickup In-Store): Shifts the payment transaction to the store. Customers can reserve an item from an online inventory. This product is shipped to the store where the customer picks it up. Customers are able to view the item before purchase, minimizing returns.
- BOPUIS (Buy Online Pick Up In-Store): This is simply a less common alternative acronym for BOPIS, with the letter U for ‘up’ included.
How does BOPIS work?
BOPIS works just like any other online order or e-commerce purchase – only with one minor difference.
Let’s take a deeper look.
The customer visits a retail store’s e-commerce website and adds products to their shopping cart.
Now, this is where the process varies slightly from a “traditional” online order.
At checkout, the shopper would have multiple fulfillment options to select from – including BOPIS.
Once a customer has opted for the BOPIS option the store fulfills the order by locating the product either in-store, in one of their warehouses, or another brick-and-mortar location. Once the order is located it is set aside for the customer if found in-store, or shipped to the customer’s closest brick-and-mortar location for convenient pickup.
Once the product is available, a notification is sent to the customer which includes information to help them get through the pickup process, including:
- Confirmation of scheduled pickup date and time.
- Store-specific information about curbside or in-store pickup locations.
- Payment, return, and exchange policies.
When the customer arrives they go to the designated pick-up location in the store, or if BOPAC was selected, a marked parking area to receive their order.
An effective BOPIS fulfillment experience is intuitive and convenient for all customers.
Why are customers choosing BOPIS?
Customers like BOPIS because it’s an easier, cheaper, and more convenient way to shop.
In fact, a majority of customers who have used BOPIS reported having a positive experience.
Buying online and picking up in-store combines the best aspects of in-store and online shopping, so let’s look at the top reasons it’s becoming a preferred fulfillment option:
BOPIS lets customers shop on their own schedule.
They can shop on any day and at any time they choose, rather than during the allotted store hours. Customers simply choose the pickup location and time that fits them best creating a more relaxed and convenient shopping experience.
Saves time and money
Another major draw for customers is avoiding shipping costs.
Not all retailers are able to offer free shipping and those that do typically charge extra for faster delivery options.
On top of avoiding delivery fees, if the customer chooses to shop from the in-store inventory they are often able to get same-day pickup at no extra charge.
For example, a person can browse and purchase a product while on their lunch break, then run in and pick it up on the way home all while avoiding crowds, lineups and excessive delivery charges.
BOPIS allows consumers to collect more information so they can make better decisions.
Customers do not feel pressured to make a decision on a product in-store that may result in buyers’ remorse and eventual returns.
In the comfort of their home, a person can take their time to comparison-shop local stores’ assortments and inventory. Furthermore, many online retailers provide easy-to-use comparison tools.
The knowledge gained from these tools generates options that give the consumer more control over how and where they spend their money.
Selection and availability
Brick-and-mortar shopping is often limited by the breadth and depth of assortments as well as available inventory within that specific location.
As a result, smaller stores often carry the basics, and customers don’t have much choice.
Because online stores have no physical limit, retailers are able to sell inventory to a customer from any location, warehouse, or even directly from the vendor. These endless isles provide customers with a much larger selection that is not dictated by their geographic location.
On top of that, customers are not faced with the hassle of going to a store only to find the item they need out-of-stock. When choosing BOPIS a customer knows they are not wasting their time (and the retailer is not suffering lost sales).
Safety and Accessibility
The pandemic forced all consumers to face safety and accessibility concerns when in-store shopping.
Pandemic or not, these struggles have always been a reality for many with disabilities, or who suffer from illnesses that limit access to public areas.
This is why for many consumers the option to buy online, and pick up in-store is a game-changer.
Many are able to safely shop for what they need and have fewer barriers.
What are the benefits of BOPIS for retailers?
Even though last year was tough for every retailer, BOPIS was able to provide multiple unforeseen benefits and was even the reason some retailers remained in business.
For example, shutdowns and social distancing policies pushed static retail giants such as J.C. Penney, Neiman Marcus, and Guitar Center, into bankruptcy.
At the same time, leading retailers like Target and Walmart set sales records.
A major contributing factor to their success was quickly and effectively adapting BOPIS fulfillment.
Let’s take a look at the benefits retailers have obtained and can expect from implementing BOPIS fulfillment:
As we’ve already seen, consumers prefer the variety and convenience that e-commerce offers, while enjoying the security and cost savings of in-store pickup.
So much so, that an article published in Harvard Business Review stated that nearly three-quarters of consumers who have tried and used BOPIS want to continue using this fulfillment option once the pandemic has ended.
Proving that choosing to implement BOPIS tangibly affects the market share a retailer has access to.
Once a customer comes into the store to pick up their order they are probably going to be looking around at the inventory on the shelves.
In addition, they can be greeted by sales associates who can recommend products or inform customers of promotions and events.
In short, BOPIS opens an opportunity to generate additional revenue and make extra sales.
Lower shipping costs
Last-mile delivery is expensive, so when customers pick up their purchases in-store, it changes the math.
When a consumer chooses BOPIS as their fulfillment option, purchases of products already available through in-store assortments simply pull inventory through your efficient supply chain systems.
Not only do you save money on shipping, but you also avoid the cost of free shipping offers for at-home delivery.
And shifting online sales to in-store delivery takes the savings one step further. Your logistics teams can ship online orders alongside normal store replenishment.
Better inventory management and visibility
This benefit is a chicken-and-egg situation.
Retailers need better inventory management practices to conduct BOPIS operations but at the same time, BOPIS makes your inventory management better.
As we saw earlier, your online storefront needs to display products that are in stock and available for in-store pickup. Accurate store inventory counts aren’t enough. Accuracy doesn’t matter if your inventory system updates once a day.
Your inventory system must be accurate in real-time.
Tighter inventory management gives you better visibility into key inventory performance metrics.
That visibility lets you make better decisions faster to lower costs and boost profitability.
Secure order pickup
The rise of at-home delivery forced loss prevention managers to start looking beyond the store.
Products were being stolen from customers’ front porches or being misplaced or damaged during delivery resulting in orders never being delivered or arriving damaged.
Whereas BOPIS shifts the delivery to the retail premises where store employees and loss prevention practices control every order.
At pickup, customers carry their BOPIS purchases out as they would with regular in-store purchases – removing the potential of stolen or damaged goods.
Relevance and competitiveness
If these reasons aren’t compelling enough, then there’s one more reason why you should move to BOPIS: because your competitors are doing it.
In fact, the same Harvard Business Review article mentioned earlier found that retail locations without BOPIS witnessed a 4.7% online and 1.8% in-store sales decrease compared to their competitors who offered this fulfillment option.
Furthermore, the closer these stores were to a BOPIS location, the greater decrease they witnessed in in-store sales.
To make matters worse, retailers found that sales of higher-priced, more profitable products fell more than sales of cheaper products because BOPIS alleviates the stress of purchasing high-priced items online.
When used correctly, BOPIS can provide benefits to both the consumer as well as competing retail businesses.
What BOPIS challenges are retailers facing?
So, if BOPIS offers so many benefits, why did it take a pandemic to get retailers on board? There’s always a catch. Doing BOPIS right isn’t easy. Getting wrong will frustrate customers and undermine your business.
It’s true, BOPIS offers multiple benefits for retailers, but it also has its fair share of challenges (as seen in the image below).
Doing BOPIS correctly isn’t easy. It can require massive process changes and if it isn’t done correctly, can create frustrations among consumers, undermine your business and even force loyal customers to your competitors.
So, these may be the reasons why it took retailers facing a pandemic to implement this fulfillment option.
Lets’ take a look at the top three challenges retailers face when rolling out a BOPIS strategy:
1) Rapid fulfillment
Whether you promise next-day or one-hour pickup windows, your stores have to hit the mark.
At the end of the day, it’s all about the customer’s experience. If they have to sit in the parking lot or stand in the store while employees pull products from the shelf, then what’s the point?
2) Store infrastructure
Odds are, you must make physical changes to your stores to make BOPIS work.
Pickup counters must be accessible and can’t serve double duty for returns. Dedicated curbside pickup areas can’t block traditional shoppers.
The biggest adjustment may be scheduling and labour budgets. Pulling staff from the sales floor to pick products will hurt normal in-store sales.
Retail stores may need to hire additional staff which will require more budget – simply to accommodate BOPIS fulfillment.
3) Supply chain infrastructure
We already talked about why inventory accuracy matters, but we haven’t talked about how you get there.
Demand forecasting, Inventory planning, POS systems, and every other supply chain process will need to support BOPIS fulfillment.
A product SKU that was once online-only could end up in-store inventory. And inventory classifications must expand to account for inventoried products that have been picked for BOPIS.
Factoring these challenges upfront into your BOPIS retail fulfillment strategy is the only way to get it right.
How can retailers establish a successful BOPIS process?
The only way to establish a successful BOPIS process is to have the correct infrastructure and a strong advanced data retail analytics platform that can accommodate all of the nuances of BOPIS fulfillment.
- Get store team members on the same page.
- For example, store managers need to know they can schedule dedicated BOPIS staff without sacrificing their in-store sales.
- Develop a user-friendly, mobile-friendly e-commerce platform.
- Customers need at-a-glance indicators that products are BOPIS-ready.
- Make BOPIS an inherent part of fulfillment strategy and your overall retail planning.
- This is the only way to keep your e-commerce and retail supply chains in sync.
Advanced Analytics & AI
- Intelligent execution is the only way to keep BOPIS from costing more money than you make.
- Forecast future demand with BOPIS in mind so you get the right inventory to the right locations at the right times.
- Use advanced analytics to integrate purchasing, allocation, replenishment, and reverse logistics for all fulfillment options.
- Create smart dashboards to minimize supply chain costs, out-of-stocks, and markdowns through real-time analysis of demand, sales, and inventory.
Should retailers choose BOPIS?
The reality is there is a small and diminishing chance you’ll remain competitive if you don’t offer BOPIS for most retail verticals.
A BOPIS retail fulfillment strategy implemented effectively can be extremely profitable. Shifting deliveries from inefficient last-mile options to in-store options lowers costs. At the same time, it increases the chances that customers end up spending more with each order.
And yes, you should choose BOPIS because your competitors are choosing BOPIS. Customers like the convenience and savings of in-store pickup. They will buy from retailers that offer it. If that isn’t you, it will be your competitors.
But you’re better off waiting if you aren’t ready to do it right.
Bolting on curbside delivery during a pandemic was fine as a lifesaving measure. That won’t cut it in the long term.
BOPIS must be a core part of your retail business strategy that should include:
- A unified, real-time platform to integrate BOPIS fulfillment with e-commerce and store operations.
- Well-thought-out customer touchpoints on your website and in your stores.
- Significant investments in your inventory management infrastructure.
BOPIS implementation requires careful planning and strategic investments. With these elements taken into consideration, BOPIS fulfillment can not only help todays’ retailers survive but thrive.