More sales of grocery, apparel and even electronics are gravitating online, but consumers still value the option to pick up online orders in-store, according to a recent report from JDA Software Group.
More than half (54%) of survey respondents said they like shopping in stores and more importantly those who order online and utilize in-store pickup options have grown from 35% in 2015 to 50% in 2017, JDA noted in its recent “Cure for the Store” report. The report states that buying online and pickup in store or (BOPIS) creates a win-win for retailers and shoppers.
“Many consumers prefer to shop in-store rather than online because they want their purchases immediately,” the report stated. “Home delivery — even next-day — cannot fully replicate the instant gratification of buying products in the store and taking them home. BOPIS gives customers the option of conveniently searching and buying merchandise online, and provides that gratification of getting their purchases almost immediately.”
Examining how retailers like Wal-Mart or its competitors can best use BOPIS to generate strong in-store traffic, JDA survey results found that 46% prefer to shop online. But half said they used BOPIS in the last 12 months, up to 43% since the first time JDA conducted a similar survey in 2015. The biggest reason consumers use BOPIS is to avoid home delivery charges (40%). Another 33% said BOPIS allows them to get their merchandise sooner and 12% said it’s more convenient to pick up orders in stores. There were 8% who said they wanted to see the actual item first, and 7% didn’t feel comfortable with home delivery.
The JDA report said when shoppers utilize BOPIS, it gives retailers an opportunity to boost store sales. Nearly half of respondents who use BOPIS said they make additional purchases in-store when picking up their online purchases. Retailers who incentivize use of BOPIS by online shoppers will increase sales within the store and maintain the margin in favor of the store. The report also found 80% of respondents said they would be more likely to use BOPIS if they received a discount.
That is what Wal-Mart U.S. e-Commerce CEO Marc Lore has said. He said the pickup discount Wal-Mart began giving to online customers who picked up their order in stores over home delivery was partly responsible for the 63% increase in online sales Wal-Mart recorded in its first quarter. The incentive is one way Lore said the retailer can pass along savings to customers.
“We are able, because of the scale of the Wal-Mart physical brick and mortar, to have product that we are moving in truckload quantities, total 4,000 points of distribution that are within 10 miles of 90% of the population,” Lore said. “It’s simple math. It costs a small fraction to get it to the store than it does to get it to somebody’s home. We have all these savings that we can share with our customers to give them a better price point, so that we sell more products to get better value and, at the same time, we are driving traffic to the store.”
JDA said retailers must make BOPIS convenient. Nearly half of respondents experienced some issues with BOPIS, with one of the most common related to mismanaged staffing and not having an attendant to help them (17%). Another 23% said it took too long for the attendant to find the order in the system. Recent stats are higher than recorded last year at 15% and 22%, respectively.
Wal-Mart continues to test different technology apps to aid in pickup of general merchandise items ordered and paid for online. The retail giant is testing large vending machine-like towers in about a dozen stores that send the package down the chute much like a cola in a vending machine once customers type in the order number code sent to them via email.
In stores where Wal-Mart is not testing the towers, they have moved the pickup desk to the front, where the customer checks in with a kiosk. An employee is then dispatched to retrieve the item and bring it to the front of the store.
“While the store is still the preferred option for most consumers, it is only by a slim margin,” JDA noted in the report. “Consumers value their time and prefer a convenient shopping experience. Having the option to purchase an item online and then pick it up in the store allows consumers to skip the long checkout lines, eliminate delivery times and save on shipping costs.”
BUY ONLINE, RETURN IN-STORE (BORIS)
JDA also polled consumers about the opportunity to return online purchases in-stores to avoid the hassle of paying for return postage. The report found consumers said their biggest frustration with buying online was complicated return policies. If returning a purchase proves difficult, customers will be less likely to make a future purchase online, the report said.
The report also found 70% of consumers have used in-store returns of online purchases in the past year. This was up 50% from 2016. A whopping 70% of consumers said they prefer to return online orders to the physical stores. One-third said it’s because they do not want to deal with the hassle of return deliveries. Another 17% said they want to get the refund or exchange sooner, and 5% said they didn’t want to have to speak to poorly run customer service departments.
JDA said like BOPIS, incentivizing BORIS through a quick and easy experience also creates an opportunity for converting an online buyer. If a customer can return an item in-store, they may exchange it for something else or even buy more merchandise, offsetting the cost of returns.
There is a growing list of at least 50 retailers that allow BORIS. Major department stores such as Dillard’s, Macy’s, Kohl’s and J.C. Penney Co., specialty retailers like Best Buy, Sephora and IKEA and big box discounters like Wal-Mart and Costco each have a return policy for online orders.
JDA also asked consumers about their holiday shopping habits. During the hectic holiday season, 25% of respondents said they prefer Cyber Monday purchases over Black Friday in-store deals (12%). Another 6% said they prefer making holiday purchases in July during Amazon Prime Day.
The report said consumers preferred to shop sales that take place throughout the year. More than half of survey respondents (57%) said they would rather complete their holiday shopping outside of the holiday season rush.
“Year-round sales, both in-store and online, continue to push customers away from the traditional holiday shopping experience,” the report noted. Retailers should take note that more than half (53%) of respondents said they occasionally buy more items than they planned when shopping during a sale event.”
JDA also said retailers that adopt BOPIS and BORIS services will be able to fulfill consumers’ desire for convenience and give them an edge in favor of the store over online options.
“By incentivizing use of BOPIS and BORIS — even during peak shopping seasons — retailers can not only snag the online sale, but drive traffic to their stores and encourage further purchases,” the report noted.
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