BOPIS – Retailers Can Do Better With Part 2

The Buy Online Pickup In-Store (BOPIS) has been a great addition to the shopping experience. However, many retailers treat this as an afterthought rather than as part of a bigger customer experience journey. DeAnn Campbell explores this topic further with case studies and antidotes.

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Introduction

BOPIS stands for “Buy Online, Pickup In-Store”. It is a retail sales strategy that allows customers to order items online and then pick them up at a physical store.

BOPIS is becoming increasingly popular as more and more retailers offer it as a service. In fact, a study by Forrester Research found that BOPIS sales are expected to grow by 50% in 2023.

There are several reasons why BOPIS is so popular with customers:
1. First, it offers a convenient way to shop. Customers can order items from the comfort of their own homes and then pick them up at a time that is convenient for them. This is appealing to busy customers who don’t have time to wait for shipping.

2. Second, BOPIS is a more affordable option than shipping. Many retailers offer complimentary BOPIS, while shipping costs can be expensive. This can save customers a significant amount of money, especially on large or bulky items.

3. Third, BOPIS can help customers avoid shipping delays. With BOPIS, customers can pick up their items immediately, rather than waiting for them to be shipped. This is great especially during peaked shopping times like the holidays or Black Friday.

For retailers, BOPIS offers several benefits as well.
1. First, it can help to increase sales. With the right mix of customer experience strategies, customers who use the BOPIS option may be motivated to make other purchases while they are in the store.

2. Second, BOPIS can help to reduce costs. Retailers can save money on shipping and handling costs by offering BOPIS.

3. Third, BOPIS can help to improve customer satisfaction. More options to buy and pick up products are always good for the customers.

Overall, BOPIS is a win-win for both retailers and customers. It is a convenient, affordable, and efficient way to shop that is becoming increasingly popular.

The BOPIS option is the most popular with big box retailers like Walmart, Target, and Best Buy, restaurants/fast food retailers like Starbucks, and McDonald’s, home improvement retailers like Home Depot, and Lowe’s, and various clothing chains.

Best Buy’s BOPIS solution

Transcript

Introduction – BOPIS, Redux

DeAnn/Larry
Hi, welcome to Retail Mashup. I’m DeAnn. I’m Larry. this is the podcast where we talk about the intersection between customer experience and running a profitable retail business. Larry, I know we’ve talked about this in the past, but I am a real evangelist, I will say for BOPIS experience. By BOPIS, I mean buy online, pick up in-store.

What Is BOPIS?

DeAnn
What is BOPIS?
It is something that was starting to become popular before covid. During covid, it evolved into curbside pickup and that was very convenient for people to drive by and pick it up. Curbside is still with us and it’s going to be with us probably permanently. But the BOPIS experience is still very neglected in stores, this bothers me because it’s really one of the most powerful tools for retailers to use to elevate their profit margins.

BOPIS was popularized during COVID and continued to grow as an option for shoppers. Erik Mclean at Pexels

Physical Versus Online Shopping Doesn’t Yield The Same Profits

If you look at shopping online versus shopping in-store, profit margins are very different. Online profit margins average somewhere between 2 to 6% profits on the money that you earn, whereas in-store sales, the revenue you generate in a physical store tends to earn between 20 and 40% profit margins.

It depends on the product, the location, and yada yada. There is a significant elevation in how much of your revenue you get to keep as profit when you’re selling to a person in a physical store versus having them buy it online and then having to ship it to them somewhere.

BOPIS can save time for many last-minute shoppers during the holidays. Source: The Today Show

That shipping cost wipes out a huge chunk of your profits. It also increases the likelihood of returns that you haven’t had a chance to see in person. Is it gonna be what you expected? Maybe not. It doesn’t fit, it doesn’t feel right. It doesn’t look as good as I thought it would look good. It’s poor quality.

It looked like it was nicer. Online return rates are exponentially higher, I think as much as 30% for online sales versus somewhere to for in-store sales. So all of that means retailers should really be making their focus, experience something that customers want to experience, that customers love.

Case Study – Dillard’s

It should be the default experience for retailers and you should change your setting to delivery as a physical act when you’re buying something online, so you’re not always just automatically having people ship it to you. And yet I see retailers, time after time, have these experiences that do the opposite.

They really make it an unpleasant, discouraging, and miserable experience. Case in point, there are a couple of retailers, and I’m gonna name names, so apologies in advance. I love you guys and you do so many other things, right? That’s why I’m saying this to try and help, but at Dillard’s, I ordered a pair of shoes online.

Dillard’s Curbside Pickup Options. Source: Dillard’s

Had it delivered to a store so I could go pick it up in that store and test out their BOPIS experience, walk in the front door, and to their credit, the email that they sent me gave me instructions to the BOPIS pickup area. The instructions were, “Take the escalator to the third floor, take a right at home goods, and take a left at Women’s Lingerie. Look at the back sign that says gift wrap and walk through that door, that’s where their BOPIS was.”

“Didn’t say buy online, pickup in-store. Didn’t say pick up here.” It said in large letters, “gift wrapping”, and in smaller letters, “customer service”.

None of those things would necessarily clue everybody that this is where they pick their product up. So I have to walk a long way. It’s confusing. Yes, they’re taking me by-product, but I’m so focused on where I’m going that it’s not incentivizing me to stop and shop.

On top of that, when I picked it up there, I didn’t get any kind of thank you for picking it up. I didn’t get any kind of discount or, or coupon, for next time or any kind of acknowledgment that what I’m doing is saving them some money. It’s really the opposite of a good customer experience for something that is so important to driving revenue.

Case Study – Neiman Marcus

Neiman Marcus is another store with the same issue. That one was even harder to find. I had to ask for directions from three different staff people. One of them didn’t know. The second one directed me to the right floor. But then, I couldn’t see anything. The third one walked with me to find it and took me to a door that literally said, “Exit”. You walk through the door that says “exit”, and the first thing you see is the bathroom.

Click and Collect Options – instructions could be non-intuitive leading to poor overall customer experience. Source: Neiman Marcus

If you turn right and look down a hallway, that’s where you pick your products up. That’s not a good customer experience, especially for a luxury brand. I’m talking about this a lot simply because it is an extremely powerful way to increase your profit margins, which is something that is essential for retailers today.

If you wanna stay in business, you need to really keep those profit margins as high as possible and online only is not going to deliver that. A big part of the reason why a lot of direct-to-consumer companies are struggling without a physical presence then you’re relying on that low-profit margin experience.

The Discussion – BOPIS Is An Afterthought

DeAnn/Larry
Larry, I don’t know if you’ve had a chance to pick something up in a store or if you have any examples of people who’ve done it. Right.

It’s funny you ask because based on a morning consult survey, I fit two of the three criteria with which this is a popular option. if you are an urban driller, if you are a millennial, and if you are a male, Chances are you use this option the most. I fit two of the three, and so I have definitely used it very often at Best Buy where I buy a lot of different electronics items. I would even venture going to Starbucks would be the same BOPIS experience because I do mobile orders. I go in there, either go through a drive-through or I go to the store to pick up things.

I agree with you. Just because I may have ordered ahead, that doesn’t mean I don’t want to talk to anyone at all. maybe the conversation could be shorter, but as I wait to get my product why not have an engagement point there with TV screens showing me what’s the special of the day of the week or maybe, specific items that’s on your flyer that I didn’t know about.

That would be a perfect way to show me what was happening, especially since I was captive. I’ve noticed in most of the stores, it does not matter whether or not it’s at a lower-price store to a high-end store that they thought about the extra engagement point, an opportunity to upsell or cross-sell to me.

This is such a great topic to question and ask the merchants and the retailers. BOPIS Is not just an afterthought, it’s a continuation of the shopping journey, the customer experience journey. You talked about higher-end stores like Neiman Marcus in another survey that I read about the higher-end you are, the worse it is with this particular concept.

I would love to hear what may be some of the reasons why that is the case. I would too. If Neiman Marcus has such an opportunity to make they make their area a palace. Conveniently located, make a red carpet to it so people can find it. But, really make it a place where you can come and you can have a bank of lockers to stow your coat when you’re shopping.

So you can spend some more time, have it as a place where you can get access to a personal consultant. If you wanna have help, some help putting an outfit together or figuring out what to buy as a gift. Make it a place where you can bring shopping bags from other stores if you’re in a mall situation and you can store those shopping bags safely in your locker.

To free your hands up to get comfortable and shop around the store. Have a little lounge area where you can sit, have some water, make a phone call, and hang out where husbands can wait while their wives are shopping. You’ll always see those sad-looking men, kinda looking for a place to sit while their wives are shopping but make it a destination.

That is a positive experience for so many reasons and motivates shoppers to use that as a starting point, as a home base for all the other shopping they’re gonna do that day. These are very large stores, both Dillard’s and Neiman Marcus.

Why can’t I pick out a blouse for myself? The salesperson will fold it up after I’ve tried it on and send it to the pickup area to hold for me while I go to the men’s department, and then end my shopping trip at the pickup area where everything’s there waiting for me, already bagged up.

I pay for it and I leave, I haven’t had to burden myself with arms full of stuff. I haven’t had to juggle between different floors to go back up and get my women’s clothes when I’m down in the men’s wear. It just makes so much sense. It really does. It really, really does.

I think we should do another podcast in the future on building this solution a little better and help our listeners on what to look out for if they’re designing a BOPIS solution.

Exactly. This is an important topic and it’s just, continue to grow, like you said, since the pandemic. It’s not gonna go away anytime soon. Yeah. Absolutely.

On that note thank you for listening. If you like this podcast, please like and subscribe to Retail. Mash up the podcast and we will talk to you next time.

Key Summary

BOPIS (buy online, pickup in-store) is a powerful tool for retailers to increase profit margins.

However, many retailers are neglecting the BOPIS experience, making it difficult to find and inconvenient to use.

This is a missed opportunity, as BOPIS can be a great way to encourage customers to shop in-store and to upsell or cross-sell products.

Retailers should make BOPIS a priority and create a positive and convenient experience for customers.

Here are some additional points that were made:

Online profit margins are much lower than in-store profit margins.

BOPIS can help to reduce shipping costs and increase customer satisfaction.

A well-designed BOPIS experience can be a great way to encourage customers to shop in-store.

Retailers should make BOPIS easy to find and use, and they should provide a positive and welcoming experience for customers.

* We made some modifications to the transcript to improve understandability and flow.

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