You may have noticed that many other retailers are offering a new shopping option: buy online pickup in store (BOPIS). Offering an in-store pickup option has quickly gained traction as a convenience-focused service that customers are attracted to. There are many reasons, aside from customer convenience, that retailers are and should be expanding their in-store pickup options. Not only does in-store pickup drive increased traffic to brick-and-mortar locations that have been struggling for years to boost sales, but it also helps collapse the boundaries between a retailer’s online and physical presence.
In this article, we’ll take a close look at BOPIS, and how it’s changing the ways that retail shopping is being done. An important consideration when discussing in-store pickup options is if it will continue to adapt to consumer desires. One way that many stores are implementing changes to their in-store pickup offerings is through the use of electronic parcel lockers. Buy online, pickup in locker (BOPIL) is emerging as a means for retailers to address some of the shortcomings that have accompanied the rollout of in-store pickup. We’ll look at what these deficiencies are and see how retail lockers supplement in store pick-up options.
What is BOPIS?
If you aren’t familiar with what BOPIS is, getting a basic understanding of the service is a useful place to start. So, what is BOPIS in retail? The concept behind BOPIS is simple. When a customer is shopping online at a retailer that has a retail presence, stores that offer in-store pickup will have a shipping method that indicates the order can be picked up in store. The customer can complete the transaction like normal, but rather than having the item shipped to their house they can go to their local retail store location and pick it up.
Not all retailers are the same, so not all BOPIS services are exactly the same. That being said, there are some features that are broadly similar across most, if not all, of the retailers offering in-store pickup. One feature is that BOPIS tends to be faster than normal shipping methods. Retailers that maintain a physical presence have struggled for years to keep up with the free, expedited shipping options that online retailers have been able to offer their customers for years.
One of the reasons this has been challenging is that retailers with a physical presence have a greater level of overhead that they must account for. BOPIS has allowed for retailers to capitalize on consumer desire for near-instant gratification in their online purchases. Something that big online retail giants like Amazon are increasingly catering to with same-day shipping options.
The second feature of in-store pickup options is that they are inherently designed to create a frictionless shopping experience. When an individual buys a product online and selects store pickup, if the item is on the shelves a store associate goes out and pulls it, doing the same with other items until the entire order is assembled. If none of the items are on the shelves at the store they will be shipped from other nearby stores or distribution centers. Once this process has been completed, the customer will usually get a notification that their order is ready for pickup. It is at this point in the interaction that some retailers differ.
In some cases, the customer must go to the customer service area to receive their order. Other retailers offer curbside pickup where a store associate brings the order out to the customer. Increasingly, retailers are looking to streamline the BOPIS process even further, which is where electronic parcel lockers come in.
What is BOPIL?
Now that we have an understanding of the basics of picking up online purchases in store, let’s take a look at how the use of parcel lockers in retail locations is intersecting with this trend. The use of parcel lockers for package pickups has been steadily increasing in recent years, particularly in urban locations. Online retailers have begun turning to parcel lockers in recent years as a means of streamlining the package delivery process and addressing security concerns associated with package delivery at residential addresses. In addition to offering enhanced package security for customers, one reason online retailers have been increasingly utilizing electronic parcel lockers is that it saves money on last mile delivery.
Retail lockers function in a similar way. When a shopper finds the items they want through the online store, they can complete their purchase and choose an in-store pickup option. Once the item is ready, they will get a notification letting them know. With parcel lockers, this notification can be sent out automatically once the package has been entered into the system. The customer can then visit the on-site location, retrieve their package from the locker, and either continue shopping or exit the store.
Retail parcel lockers address many of the deficiencies that exist with current iterations of BOPIS services. To understand what we mean, it’s first helpful to understand the basic advantages and disadvantages of BOPIS as it currently stands. This provides a useful framework for understanding how electronic parcel lockers enhance in-store pickup offerings for both the customer and the retailer.
Advantages and Disadvantages of BOPIS
Like everything, there are advantages and disadvantages to the way many retailers are currently implementing in-store pickup. We’ll outline the pros and cons of BOPIS from both the customer and the retailer perspective.
The core advantage that BOPIS offers is convenience. Most BOPIS services allow brick-and-mortar retailers to offer their customers near instant-gratification shopping with the convenience that already exists in an online shopping experience. Customers can, for the most part, complete their purchase online and pickup their items in-store without having to deal with the hassles associated with retail shopping, such as browsing for the items they want and completing the standard checkout process.
BOPIS orders offer the best of both worlds for customers; the convenience and efficiency of being able to shop and order online from anywhere, with faster shipping options and the flexibility to control exactly when they get their order that a retail environment provides.
For retailers, BOPIS has significant advantages. First, it has allowed brick-and-mortar retailers to stay competitive with online retailers by having a shipping option that can compete with the free, expedited shipping that online retailers offer. In many cases, orders that are completed online and picked up in the store can be retrieved even faster than the same-day shipping options that retailers like Amazon are rolling out in select urban markets. This allows retailers to attract shoppers that like both the convenience that online shopping offers and the instant-gratification that retail shopping provides.
Retailers have been quick to adopt BOPIS in part because it helps reduce costs associated with last mile logistics. Rather than an individual shipment going out to many different residential addresses, retailers can instead have the customer come pick the item up from them. They are able to offer this service free of cost because it actually saves them money compared to shipping the item out.
BOPIS has also changed the way that many retailers are fulfilling orders. Prior to in-store pickup options, retailers had separate fulfillment for orders that were placed online or in a store. For online purchases, retailers drew from inventory housed in distribution centers. If an item was out of stock, it was actually out of stock in a distribution center but not necessarily out of stock in stores. Now, when you shop at a retailer that offers in-store pickup, items that are physically on the shelves in the store are counted in that inventory. This is advantageous for shoppers that are picking up in store or having it shipped directly to them. This is because now, many retailers are using their stores to fulfill orders that are completed online and intended to be shipped out.
So, when you complete a purchase at a retailer that has an online and retail component, your shipment may come from either a distribution center or retail location. This is an advantage for retailers because it allows them to provide customers with a more accurate picture of their inventory while leveraging the staff and inventory at retail locations to drive increased online purchases.
Given all of the positive benefits associated with in-store pickup, you might wonder what disadvantages there could be with this service. Most of the disadvantages come down to poor implementation. One of the primary reasons most people choose to utilize in-store pickup is because of the enhanced convenience it provides. However, once a customer arrives at the store they usually have to wait in line at the customer service desk to retrieve their package. This can take time, as most customer service desks are also where returns and exchanges are made, resulting in the shopper waiting in line for a purchase they have already completed. This can quickly lead to frustration for customers that are on a time-crunch.
A second disadvantage of BOPIS as it is currently being utilized is that it is incredibly labor-intensive for staff. In order for BOPIS to be efficient, retailers will usually assign one or more staff members with retrieving the individual items for an order, assembling the order, and notifying the customer that their order is ready. This takes time away from other tasks that the store associate could be completing. Of course, there is no way to eliminate the labor component associated with BOPIS, at least not without significant automation which isn’t present in retail environments currently. What this means is that a labor component will always be required if retailers want to keep offering this service. However, the key is finding ways to improve the efficiency of that labor. That is where electronic parcel lockers come in.
How Retail Lockers Improve BOPIS
By now we have a firm understanding of what BOPIS is, how it works, and what the advantages and disadvantages are. Taken as a whole, BOPIS represents an exciting channel through which retailers can capture increased sales through both their online and retail locations. However, there are some ways that the process can be improved. One of these is through the use of electronic parcel lockers. As we have outlined, BOPIL is broadly very similar to BOPIS. However, there are some key differences in the execution of these two services.
One advantage that BOPIL brings to the table is that it capitalizes on the appeal of a frictionless shopping experience that BOPIS promises but under delivers. Most customers that choose in-store pickup would prefer not to have to wait in line to retrieve their order. By using a locker, retailers can eliminate lines for online order pickup. Instead, the customer goes to the locker and seamlessly retrieves their package, without ever having to interact with a sales associate if they don’t want to.
A second advantage to using retail lockers for in-store pickups is that they improve the efficiency of the process for the store associates themselves. With an electronic parcel system, the time-consuming steps associated with preparing BOPIS orders are automated. Store associates can retrieve the item off of their shelves, log it into the locker system with the associated order number, and then move on to the next order. At this point, their role in the process is done. Once the parcel is entered into the locker system, a notification is automatically sent to the customer letting them know their store order is ready for pickup. Once they enter the store to pick up their item they can do so without the assistance of a store associate.
In the end, BOPIL services aren’t meant to supplant BOPIS but rather augment it. The buy online, pickup in store option isn’t going anywhere any time soon. Over the 2018 holiday season, in-store pickup of online purchases rose nearly 20% over the preceding year. Given this, you can expect to see retailers increasing their in-store pickup options. The use of a retail locker augments the in-store pickup option by making it more streamlined and frictionless. The result is the shopping experience BOPIS promises but doesn’t always deliver.