Buy Online, Pick Up In-Store: An Opportunity for Retail

The need for omnichannel efforts in retail isn’t news. Companies have been hurrying to establish an online presence — or for some online-only retailers, a physical presence — so customers can shop wherever they want. It’s not enough to just be available in multiple locations, though. Those shopping platforms and touch points need to be connected for omnichannel success. One growing reason for this is the popularity of “buy online, pick up in-store.” If you’ve ever seen this option on a website and wondered if people actually use it, the answer is a resounding “yes.”

According to a recent study, 57.5 percent of shoppers use this service. The most common reason cited by customers is wanting to avoid shipping charges (73 percent), while others cited needing an item right away and ease of returns. While offering an in-store pickup option might feel like an extra thing to worry about for some retailers, it actually brings with it a big opportunity to increase foot traffic and sales at the same time. For retailers, that’s an opportunity worth investigating.

Benefits for Customers and Retailers

The buy online, pick up in-store trend is growing fast, and more retailers have been making it an option. In 2015, 21.2 percent of U.S. retailers offered the service. That number doubled to 44.4 percent in 2016, according to a report from Multichannel Merchant.

The reason for these growing numbers? In-store pickup benefits both the customer and the retailer.

Buy Online, Pick Up In-Store: An Opportunity for Retail 2

Customers often avoid shipping fees but still get the convenience of having what they want ready for them when they want it. They don’t have to worry about showing up at a store and discovering the item they came for is out of stock. This pickup method works well for customers that don’t have time to wait for an item to ship or fear a package could get stolen.

Retailers also avoid some delivery costs when customers pick up items in stores. This is the case at J.C. Penney, for example:

“Among JCP’s 1,000-plus stores, 250 can use their inventory to fulfill online orders and ship them to consumers, a spokeswoman says. ‘We understand that leveraging our stores allows us to have a lower delivery cost, to reduce the delivery time for customers and also drive traffic,’ she says. Online orders drive store traffic via the retailer’s buy-online, pick up in store option, which is how almost 40% of JCP.com orders are picked up. This helps the retailer’s bottom line, as the retailer doesn’t pay shipping costs for those orders.”

But perhaps more importantly, this trend increases foot traffic. When customers arrive to pick up purchases made online, they also tend to do other shopping. J.C. Penney found 40 percent of customers who buy online and pick up in-store spend more than $50 on additional items when they pick up their initial orders.

This omnichannel service presents a real opportunity for retailers with physical stores that online-only businesses can’t tap into.

Make Stores Distribution Centers with the Right Tech

To take advantage of this opportunity, retailers need to have great inventory management and learn to operate their stores like mini distribution centers, otherwise, the customer experience could be less than ideal. Customers want to know instantly if an item is available for pickup nearby, and if someone makes a purchase online, the store needs to have that item ready very quickly. Retailers need inventory systems that communicate across all store locations and platforms to accomplish this. A comprehensive inventory system using RFID technology can serve as the backbone for retailers, supporting services like buy online, pick up in-store.

The Intel® Retail Sensor Platform can help deliver the accurate inventory retailers need across their store locations. It integrates with and supports other management systems as well, so businesses can get the exact solutions they need. Learn about this platform and Intel’s other diverse solutions for retail that are helping transform the retail industry.