The BOPIS Trend Is Picking Up

Brands are learning the secrets to making “buy online, pickup in-store” work

By Anne Field

A yellow Amazon delivery locker stands ready in Newport, U.K. The company has placed similar lockers throughout the U.S. The lockers are in part a response to a trend by other retailers offering in-store pickup as an alternative to home delivery. Matthew Horwood/Getty Images

Several years ago, as brick-and-mortar retailers searched for ways to remain relevant in these tech-centric times, some forward-looking marketers experimented with combining online and in-store shopping. One method, called "buy online, pickup in-store" (BOPIS), allowed consumers to purchase products via their phones or computers, then get the merchandise in person at a store. Customers were often disappointed, however, as retailers discovered that making BOPIS work involved a variety of logistical and marketing challenges.

But more recently, some big box stores, grocery chains, and other retailers have stepped up their BOPIS game, tinkering with the formula and finding greater success. These companies, from Nike to The Home Depot, are doing everything from improving pickup systems to adding special parking sections for BOPIS buyers. "With recent improvements to service and the customer experience, consumers are flocking to it," says Steve Osburn, a managing director at Accenture Strategy.

They've also discovered that one size does not fit all. One retailer might place purchased items in lockers outside the store, for example, while another brings products to the shopper's car. "There are a variety of iterations at the moment," says Lee Peterson, EVP of thought leadership and marketing at WD Partners. "Stores are trying to figure out what works best for them."

Research shows that consumers really like BOPIS. When Peterson's firm conducted a study of 4,000 shoppers, it found that out of 14 digital retail technologies, BOPIS was the preferred choice. According to Osburn, in 2017 to 2018, there was 50 percent year-over-year growth in the number of customers using BOPIS. And while they're by no means the majority of retailers, the number of companies offering the option has increased. Of about 130 stores studied, the ones using BOPIS jumped around 57 percent in 2018, up from 48 percent in 2017, according to Osburn.

 

Speed, Convenience — and Beating Amazon

What's the appeal? For consumers there's the opportunity to save on shipping costs, as well as greater convenience and faster access to the product. "It's a way to satisfy the customer in an environment that is increasingly speed-driven," Osburn says.

For retailers, there's some evidence that at least in general merchandise stores, BOPIS can also lead to more sales. That's because while shoppers are in the store picking up their order, they may decide to make additional purchases. More important, BOPIS gives stores a way to replicate the online shopping experience, while doing Amazon one better. With BOPIS, consumers can pick up their purchases in a matter of hours instead of waiting a day or two. "They're leveraging one of their big advantages — you can buy and get something all in one day," says Kiri Masters, founder of Bobsled Marketing.

 

Towers and Lockers to the Rescue

Ironically, Amazon is a leader in some of the systems being used by retailers — specifically, what could be called "buy online, pickup in locker." Starting several years ago, the company began working with 7-Eleven convenience stores to set up self-serve kiosks where consumers can pick up items ordered through Amazon. Shoppers receive an email with a six-digit code to their locker. Now there are more than 2,800 lockers located in convenience stores, copy centers, Whole Foods Markets, and other outlets in some 70 metropolitan areas.

Amazon's locker approach goes a long way to addressing one significant sticking point that's slowed acceptance of BOPIS systems. Several years ago, some BOPIS retailers forced consumers to pick up their purchases inside the store, often in the back, in the hope they would choose a few more items to buy, according to Osburn. Customers tended to find that irritating, especially when forced to wait for employees to retrieve their goods. "Anything that doesn't make it convenient and easy for the customer is a barrier to better adoption rates," Osburn says. Introducing lockers and placing them in convenient locations inside the store, adds Osburn, has made a big difference.

He cites a department store he worked with as a case in point. For its first two years of BOPIS, customers had to stand in line to pick up their purchases at the back of the store. Consumer reception was lukewarm at best. "We would shop to see how it worked and we would be the only one in the line," Osburn says. But two years ago, adoption rate surged after the retailer moved pickup to the front of its stores and made other changes, like adding special parking spots for BOPIS shoppers.

Other approaches include using tall pickup towers, in which customers get their purchases from vending machine-like structures using a barcode to open them up. The most popular methods are picking up from lockers that are right in front of the store or having an employee bring the items to the car, according to Peterson. "You don't even have to go inside," he says.

"BOPIS in grocery stores is increasing at a faster rate than delivery."
— Jeff Baskin, EVP of global strategic partnerships and marketing at Radius Networks

In most cases, retailers are using locker systems from third parties that provide a variety of benefits. Take Parcel Pending. Its smart lockers automatically open when they detect the appropriate customer is within five feet. They also can be used as billboards, featuring advertisements for specific brands that can be changed at various intervals. "There's an opportunity for upselling to consumers when they come into the store," says Cynthia Aadal, VP of retail at Parcel Pending.

The Toronto-based PenguinPickUp, a last-mile logistics company, runs separate staffed locations with temperature-controlled lockers situated in urban areas in Canada where delivery is logistically difficult. Another example: Radius Networks' grocery store and restaurant–focused FlyBuy platform for curbside and in-store pickup can determine everything from when customers are a few minutes away to which space they've parked in.

According to Peterson, supermarkets such as Giant Eagle and Kroger are the heaviest users and promoters of BOPIS, marketing the service to consumers who are particularly inclined to order their groceries online and pick them up on the way home from work, for instance. According to Jeff Baskin, the EVP of global strategic partnerships and marketing at Radius Networks, "BOPIS in grocery stores is increasing at a faster rate than delivery." At the same time, the systems are especially tricky, because stores sell a preponderance of perishable items.

 

Walmart Leads the Pack

According to many industry observers, Walmart is hands-down the clear BOPIS frontrunner. "Nobody is doing it better than Walmart, no question," Peterson says. The retail giant has made a considerable investment in relevant systems and technologies, resulting in a particularly big boost to grocery sales. It's now the third biggest e-commerce retailer in the U.S., TechCrunch reports.

In-store, the company uses 16-foot vending machine-like pickup towers. Shoppers order online and employees load the purchases into the structures. The retailer added about 900 of these this year, bringing the total to around 1,700.

BOPIS is less of a draw at specialty apparel retailers, according to Peterson, although there's a benefit of being able to try online purchases on in the store and return them right away if necessary. For its part, Nike is piloting BOPIS in two high-tech stores, one in Los Angeles and another in Manhattan on Fifth Avenue, to provide a more customized experience. At its 68,000 square-foot, six-level, Fifth Avenue space, for example, Nike pushes out personalized promotions through its app, thereby encouraging customers to buy more products at the location.

Of course, marketers also have to pay attention to the front end of the process. Some supermarkets have started running TV commercials showing shoppers buying online and then pulling up to the side of a store, where an employee brings their groceries right to the car. On their websites, retailers are making the BOPIS alternative more apparent.

 

Some Solutions Out of Stock

To be sure, marketers still face a host of challenges. Perhaps the biggest is getting an accurate handle on inventory. "When the customer places an order and you've got a four-hour window to satisfy that order, you can't be searching the store for the product," Osburn says. In fact, researchers report the biggest problem consumers say they face when ordering for in-store pickup is discovering items they bought aren't ready or available when they arrive at the location.

To address that problem, retailers are using systems that tell them earlier in the process whether they're out of a product, giving consumers a heads-up. "That means informing a customer through an app that the eight-pack of chicken isn't available, but the four-pack is," Baskin says. Some systems let shoppers see online what a specific store has in stock while they order.

Ultimately, Peterson feels that BOPIS success rests on making organizational changes. He recommends setting up a separate entity for BOPIS, combining marketing with operations, store development, and even HR. The reason: He sees too many moving parts, all of which need to work in close coordination. "You can't have any silos," he says.

 


 

You must be logged in to submit a comment.