What is BOPIS in Retail?

By now, you may have probably noticed other retailers offer a buy online pickup in store (BOPIS) service. While this may seem like a simple feature to add as a checkout option, it’s beneficial to understand exactly what it is and how convenient it can make shopping for your customers.

BOPIS, at its core, is a new way for brick-and-mortar retailers with an online presence to offer convenience for their shoppers. What sets BOPIS apart from other shipping services that have emerged in recent years is that it represents a new type of fusion between a store’s online and physical storefronts. By creating a more frictionless shopping experience that collapses the boundaries between making a purchase online and in-store. Major retailers are hoping to attract customers and stave off inroads by online giants like Amazon.

In this article, we’ll break down exactly what BOPIS is. We’ll look at how BOPIS functions for a customer, and explore some of the different BOPIS models that stores are using. There are also important ways that BOPIS is changing the way that retailers do business. For example, in order for BOPIS to function correctly, retailers have to merge their in-store and online inventory tracking system. This has had an impact not only on how retailers fulfill all orders–regardless of whether they were purchased online or in-store–but has also improved the way that customers can find the items they want.

While much of the recent emphasis in the news has been on popular retailers shifting to offer BOPIS services for their customers, there are other alternatives on the horizon that offer improvements for both retailers, shippers, and consumers. One of the challenges that all three of these entities face is getting packages to the customer as fast as possible. In light of the impact that last mile shipping fees have, alternatives like buy online, pickup in locker (BOPIL) offer a way to minimize last mile shipping costs while still delivering convenience.

While this is an attractive option for online retailers that have no physical presence, many brick-and-mortar retailers are also adopting parcel locker services to house purchases made online that are picked up in-store. The advantages of these are numerous, including reducing labor associated with order preparation and handoff, as well as streamlining the process from end-to-end and improving last mile logistics.

Buy Online Pickup In-Store, Explained

While you may have heard of BOPIS, you might not have a clear idea of what it really is. At a basic level, BOPIS is fairly straightforward. First of all, in order to have a BOPIS option, you must have a store that has both an online and physical presence. In other words, BOPIS doesn’t work for stores that have an online storefront only. For retailers that have both an online and physical storefront, BOPIS is simply an additional shipping option that appears at online checkout. Individuals can add items to their cart online and complete the checkout process normally, choosing the shipping option to pick up their order in-store. When their entire order is ready for pickup, they’ll get a notification and can pick up their order at any time the store is open.

There are a few different ways that BOPIS works in real-world scenarios. The first scenario is when an item is actually in stock at the store and the customer wants to pick their order up. In this situation, a store associate receives the order, goes out to the shelf and grabs it, then prepares the order so that it can be picked up. Many stores are offering this service within an hour. The second scenario is when an item is not in stock at a local store, but a customer still chooses to have the item shipped to that store. In this second scenario, the customer may have to wait a few days until their order is ready for pickup.

Lastly, there is the actual physical act of picking up the order. This varies depending on the store. Some businesses have curbside pickup where customers park in specifically designated parking spots near the entrance to the store and a store associate brings their order out to them. For other stores, customers picking up their orders in the store must visit the customer service desk.

What are the Advantages of BOPIS?

One of the reasons BOPIS has become so popular in recent years is because it offers advantages to both consumers and retailers. Some of these advantages may not be readily apparent from the outside, so it is worth diving into them in greater detail. The impetus for retailers to begin offering BOPIS services for their customers was to give them an additional way to compete with online retailers like Amazon. What brick-and-mortar retailers realized after years of trying to compete with Amazon while seeing steadily declining sales, was that customers are really looking for convenience and speed in their online shopping.

Customers want a shopping experience that is as convenient and frictionless as possible. Online retailers like Amazon accomplish this through a variety of methods; one of the most significant ones is by offering expedited free shipping methods. In other words, online shoppers are looking for a shopping experience that offers as close to instant gratification as possible, with as little hassle as possible.

Brick-and-mortar retailers have steadily been making their online storefront a core part of their shopping experience, and have worked over the years to collapse the boundaries between the two storefronts in order to offer a seamless shopping experience for their customers. This feature is coming into play with online grocery shopping and the future of grocery retail as well. But what brick-and-mortar retailers weren’t able to do was offer the same expedited, free shipping options that online retailers with less overhead costs were able to do. To address this, brick-and-mortar retailers realized they could offer in-store pickup. This helped in a couple of ways.

Last Mile Shipping Costs

First, understand that last mile shipping costs represent a significant expense for retailers. What this means is getting the package to a distribution center costs far less than getting that same item from a distribution center to a residential address. However, last mile shipping costs could be avoided if items were shipped directly to a store for pickup. Put another way, in-store pickup options allow brick-and-mortar retailers to offer a fast, free competitive shopping option without hurting their bottom line.

Increased Retail Traffic

There’s a second key advantage for retailers that offer BOPIS shipping options. BOPIS by its very nature brings the customer into the store itself. While the name of the game with BOPIS is enhanced convenience, it also increases foot traffic within the store itself. This is a big boon to brick-and-mortar retailers that have been struggling for years to find effective methods to increase the number of customers that are walking through their aisles.

Integrated Inventory Management

One other advantage for retailers that is worth mentioning is that it has shifted the way many retailers utilize their inventory in fundamental ways. Prior to the adoption of BOPIS services, retailers had two different inventory systems: one for distribution centers, and one for stores. Online orders would be fulfilled through distribution centers, while in-store purchases would be fulfilled with whatever inventory was on the shelves. BOPIS has caused these two inventory silos to merge. Now, most large brick-and-mortar retailers include their in-store inventory when you are making purchases online. This has had ramifications far outside of simply allowing people to pick up items in-store.

Now, even if an item is out of stock at a distribution center, if it is in-stock at a store the order can be fulfilled and the item can be shipped directly from that store. This change has benefited consumers by giving them access to a greater amount of inventory and reducing the chances that an item they want is out of stock. At the same time, retailers have benefited because merging these two inventory management systems have given them a full-field view of their entire inventory, all of the time. This has allowed them to capture a greater share of online sales, while also allowing them to offer services such as BOPIS.

Speed

For customers, the advantages of BOPIS are enough to keep them utilizing the service. One of the first is speed. In general, BOPIS allows customers to receive their item much faster than they otherwise would. This is especially true if the item is physically on the shelves in the store where you are going to arrange pickup. In these situations, customers can pick up their items within minutes instead of waiting a day or two like they would with an online retailer. BOPIS options are also convenient because they give the customer flexibility in how they shop. They can place an order online and go pick up their shopping on their lunch break at work or during a quick stop after work.

Security

Lastly, customers will have the security in knowing that their item will actually be there when they visit the store. One of the challenges both shippers and online retailers are running into is finding ways to make sure that customer packages are secured once they have been delivered. As online shopping has increased, so too have instances where packages are stolen right off of a person’s doorstep. The problem is so commonplace that many people are enhancing their home security systems with outward facing cameras to capture video of package thefts in the act.

The Downsides of BOPIS and BOPIS Alternatives

Although the BOPIS trend may seem to only offer advantages, this isn’t quite the case. For retailers, BOPIS ecommerce still requires a significant investment in labor to accomplish. Most stores that offer this service must train and designate staff specifically to fulfill orders for in-store pickup. At the same time, staff is increasingly tasked with fulfilling orders made online that are being shipped out, causing them to have to split their time between these two tasks. In the end, this represents a significant source of overhead for retailers.

In addition to the need to designate specific staff to fulfil BOPIS retail orders, a second downside is that not every retailer can offer in-store pickup. Put another way, how do online-only retailers offer a service with a similar level of convenience to BOPIS if they don’t have a physical storefront? One alternative is to utilize parcel lockers. Amazon has recently been testing the waters on this front with their Amazon locker service, where customers can purchase an item online and pick it up in an Amazon locker somewhere nearby. This is beneficial for customers that want the security and convenience that BOPIS offers. At the same time, BOPIL helps online retailers save on last mile delivery costs by funneling many orders to one discrete store location.

In its current implementation, BOPIS retail has some disadvantages for consumers as well. While convenience is the main reason this service has risen in popularity, this convenience is often offset by how orders are actually picked up. For many retailers, BOPIS orders must be picked up at the customer service desk. This is usually the desk where returns are processed as well, which can lead to significant wait times while store associates juggle these two tasks.

There is also sometimes difficulty in combining the online and in-store shopping experience. For example, if you make a purchase online and choose an in-store pickup option but realize you need to add items to your order, it can be unwieldy to pick up your online order and then proceed to go grab additional items. The inconvenience of running your payment method twice, or waiting in two lines, can sometimes offset the convenience that BOPIS is intended to provide.

One way that some retailers are choosing to address the deficiencies in BOPIS orders is by utilizing retail parcel lockers in store. BOPIL eliminates the need for individuals picking up orders to wait in line at the customer service desk, while still offering the same level of security. This enhanced convenience allows for a more frictionless shopping experience. At the same time, BOPIL allows retailers to streamline their staffing even further, giving store associates more time to focus on providing excellent customer service. While it is clear that BOPIS has been increasingly popular over the past two holiday seasons, expect to see more retailers build on the popularity of in store pickup by offering BOPIL services. Check out our related blog article, BOPIS vs BOPIL, to learn more.

Conclusion

The explosion of retail stores offering in-store pickup services clearly demonstrates that this trend is here to stay. The next time you need to make a quick trip to your favorite retailer, consider instead making an online purchase and picking it up in the store. You may be surprised at the convenience this service offers you. With exciting innovations to BOPIS on the horizon, including buy online, pickup in locker, the convenience of in-store pickup options will only continue to increase as the process is improved.

2019-03-04T09:00:01-08:000 Comments

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