Insight / Blog

Customers are driving BOPIS adoption – retailers will have to adapt

Posted on 3rd September 2019

Picture a world where retailers don’t want more customers in their stores, where they prefer to spend more on last-mile deliveries, and where they don’t want to make the most of their advantage over pureplays like Amazon.

A weird world, certainly; but it seems to be the one we live in.

BOPIS offers benefits to consumers

US consumers love ecommerce, but it can be a pain waiting for delivery and hoping that the package will still be on the doorstep by the time they’re home. Parcel thievery, sudden downpours or other mishaps are a stressful reality. That’s probably why over two thirds of US consumers have used BOPIS (buy online, pickup in store) services. The security provided by collection services leads approximately half to change their purchasing habits so that they can utilize a BOPIS proposition.

Yet BOPIS is not frequently offered by retailers. Research from OrderDynamics suggests just 27.5% of US retailers allow customers to collect their orders in stores. That means consumers are pulling, but US retailers have not yet leaned in – with a few major exceptions.

Amazon and Walmart are notable for pushing BOPIS – Amazon has invested massively in its Amazon Collections and Returns in Kohl’s stores and through its Whole Foods acquisition. For its part, Walmart is locked in battle with the Seattle giant, and 50% of Americans who have used a BOPIS service have done so at Walmart, proving that it is still capturing a significant segment of the market.

BOPIS is effective at mid-market scale too

So what does this mean for other retailers, who may not be at the scale of the big boys turning over hundreds of billions of dollars?

The good news is that in many ways, BOPIS levels the playing field. When you eliminate the prohibitively costly last mile from ecommerce orders, they immediately become much more profitable. The technology to power BOPIS is available to retailers already, so provided they have existing order management and inventory tracking systems, they should be able to direct their online orders to stores for delivery.

Bringing next-day collection

Even better, BOPIS opens the possibility for even smaller retailers to enable same-day or next-day collections. Delivery at this speed can be a real differentiator, though it is increasingly becoming normalized as Amazon recently demonstrated with their promise to enable one-day delivery for Prime customers on millions of products.

How does BOPIS allow for such quick fulfilment? By using the stock from the stores where the customers are collecting. Again, this is simply a case of combining technology provider solutions with existing systems and training staff to pick incoming orders.

Customers will reward retailers who meet their needs

Retailers who can adopt and drive customers towards BOPIS will win on many fronts. The customer experience is in the retailers’ hands, rather than at the mercy of a rushed delivery driver or a soggy porch parcel. 85% of customers report buying additional items in stores when they pick up an order – adding incremental revenue to ecommerce purchases. Finally, having the option available ensures higher conversion as customers looking for security can rely on BOPIS to collect their purchases at their leisure, rather than worrying about theft or accidents. Given that 50% of BOPIS users have decided where they purchase based on the availability of instore collection, this could be a significant influence on conversion.

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