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Back in the early 2000s, Rick Johnson and the team at Kadro began installing capabilities that allowed retailers to offer in-store pickup for items that were purchased online.
At a jewelry retailer, it provided the option for customers to opt for online ordering, while still being able to inspect the item and ensure it was suitable before officially receiving it. The in-store pickup proved to be especially important for a diamond engagement ring, but that level of review wasn’t necessary for all items.
“It was kind of seen as a nice-to-have,” said Johnson, the president and CEO of Kadro, a Raleigh, North Carolina-based software engineering firm with a focus on building solutions for businesses in Adobe Commerce, Magento Open Source and BigCommerce.
About 20 years and a pandemic-prompted surge in online shopping later, and that function’s importance has grown in the eyes of retailers. It also now has a formal name: Buy Online, Pickup In Store, or BOPIS.
The benefits of BOPIS
To be sure, BOPIS capabilities were being added in the years just before the pandemic as retailers looked to increase their omnichannel offerings. After all, it could help create an easier ecommerce shopping experience for high-value items that someone doesn’t want to have shipped, or last-minute buys when a person doesn’t want to wait for delivery. The time advantage was also clear: An item purchased late at night could be purchased when the store is open.
For consumers, BOPIS offered “both convenience and control,” Johnson said.
“I control the transaction on my terms,” Johnson said. “By buying it online, I don't have to go to the store. I can browse at my convenience on my computer, do the transaction, pay for it and then I control when I'm going to go pick it up.”
The advantages were known, but it was the public health imperative of 2020 that led BOPIS to become one of the most-talked-about facets of the shopping experience.
At the time, consumers wanted to keep shopping, but they also wanted to maintain safe distance and observe public health recommendations. They brought this desire, along with a growing, Amazon-inspired expectation that items could be available quickly, and precisely when a retailer said they would be.
BOPIS was seen as a solution that delivered the best of both experiences: Shoppers could limit their time in-store, having identified what they wanted ahead of time. But retailers benefited because those consumers would still come into the store, raising the chance that they would engage with the brand, and even make additional purchases to raise the total order volume. Backing up the latter, recent data from PYMNTS showed that 47% of the roughly 9 million US consumers who picked up an online order at the store bought more products while doing so, and another 17% said they purchase additional items when picking up orders some of the time. If a retailer is in a mall, pickup can also increased foot traffic to the other stores in that area.
In 2020, Johnson recalls skyrocketing demand from retailers for solutions such as BOPIS, same-day delivery and additions to the ecommerce experience that would display the time when an order was expected to arrive at a location for pickup or delivery. Then, many retailers had parts of these capabilities, but they didn’t have the entire system enabled. Now, there’s no doubt BOPIS has grown.
According to Insider Intelligence, US BOPIS sales more than doubled in 2020 to reach $72.46 billion. While growth won’t be that rapid going forward, there’s still plenty of opportunity to add to sales. In 2021, the service forecast that US sales would reach $140.96 billion by 2024.
“It was a unique differentiator before the pandemic. It was accelerated by a percentage of retailers during the pandemic,” Johnson said. But increased adoption does not mean all retailers are treating it as table stakes yet. “Not everybody has developed the technology or has the infrastructure to support it,” Johnson said. For some consumer categories, it may never be a fit.
Even so, the pickup option is generally a rising expectation from consumers who are seeking more options to be able to shop when and where they want. According to a recent study from Radial, more than one-third of consumers expect to increase their use of such services during the 2022 holiday season.
The inventory imperative
This accounts for a “blurring” of the lines that Johnson sees happening across retail – between ecommerce and in-store shopping, as well as long-held peak shopping days like Black Friday and Cyber Monday and the rest of the holiday season.
The advantages to stretching across these lines are plentiful for brands and retailers. But implementing a BOPIS program requires preparation.
When it comes to technology, there are important capabilities that need to be in place.
Johnson said the big one involves making sure the items listed on the sales channel are available at the pickup point.
“The merchant needs to have the facilities, from a technology point of view, to be able to have accurate, real-time inventory information down at the store level,” he said.
If an item is listed online, it must also be available at the store. A retailer’s system must be able to have visibility into that, and provide the right information to consumers. Consider apparel: There could be a number of potential colors, sizes and styles. A shopper doesn’t want to find that the dress they selected isn’t available.
By the same token, BOPIS can be a big advantage for shoppers as they look to find what they’re seeking while saving trips. If they’re looking for a particular item, they may turn to ecommerce sites to research a number of stores in a given area, then pick up the one they find. Ultimately, this can provide a great experience, but the inventory needs to be accurate in order for it to deliver.
In part, doing so requires aligning inventory across channels. Many retailers keep ecommerce and in-store inventory separate. Some fulfill online orders out of stores, as well as distribution centers. BOPIS requires making a decision about where the inventory for those orders will live. If the online inventory is already available at the store level, a retailer is likely best-prepared to implement BOPIS, Johnson said.
Preparing for pickup: Technology and teams
Preparation extends to a number of areas of technology, Johnson said. Technology also must be in place to track an order, and communicate with customers via email and SMS to let them know that a pickup is ready. A website must be engineered so that it can scale with activity, ensuring that inefficient database queries are not being made during the checkout process.
At the same time, there are considerations for the people running this program, Johnson said. Teams for ecommerce and in-store can be separate, so often they must coordinate to make BOPIS a success. Marketing must also be carefully tuned so that an promotion for BOPIS doesn’t take sales away from another channel.
In-store sales associates must also be trained to fill orders, and field additional customer service questions that may come from those who pick up orders. For those who work on commission, it’s important determine how the time they might take to fulfill an order that was initiated online factors into their compensation.
In the end, BOPIS does not only represent a crossover between mediums for the consumer, but also a coming together of different teams that are working together, and multiple technologies running as one system to create the shopping experience.
Even when the pieces are in place, make sure that all of the features are in place, and tested. As Johnson put it, "You obviously don't want to wing it when it comes to Black Friday."
Trending in Operations
The grocer is expanding a partnership with Cooler Screens.
You may have heard of offsite retail media. How about offline?
Retail media holds out the opportunity that brands and marketplaces can reach customers with advertising, anywhere that there’s a screen. Through a new partnership, that capability is extending to the store.
Kroger is set to add smart screens to 500 stores, bringing retail media activations to aisles and checkout lines.
It’s the result of an expanded partnership with Cooler Screens, a company that developed software and enabling hardware to provide advertising and analytics on in-store screens. The company started by developing screens for the cooler doors of frozen food sections, but has since expanded to other areas of the store, like endcaps, banner aisles or existing screens.
Kroger and Cooler Screens piloted the technology for three years, and set out to determine whether they could improve customer experiences through interactive media and digital merchandising. The companies now have conviction that the content available on screens can enable consumers to make “better-informed decisions based on their own preferences, diets, health needs, budgets and lifestyles,” according to an announcement detailing the activation.
In turn, providing in-store retail media allows brands to reach consumers while they are shopping at a brick-and-mortar location. It extends the digital ad opportunities available via ecommerce to a new channel. Unlike a traditional static display ad, digitally-powered retail media is measurable, and Cooler Screens said it offers tools that help brands provide contextually relevant promotions and product information, as well as analytics on performance.
Kroger has made retail media a central part of its digital strategy. The grocer provides advertising through the Kroger Precision Marketing arm, and customer insights through its 84.51° data science team. Executives have talked about how retail media is helping the company unlock new, high-margin business lines, and see the growth of available data as a key driver of the company’s proposed merger with Albertsons.
“We’re excited about this continued collaboration as it extends our vision for the future of retail media, offering brands another powerful marketing lever inside the store,” said Cara Pratt, senior vice president at Kroger Precision Marketing, in a statement. “Cooler Screens shares and further enables this vision by bringing the best of digital experiences directly into our retail stores while integrating with our 84.51° data science platform to create an engaging and valuable experience for our customers, associates, and brands.”
Cooler Screens said it reaches more than 90 million viewers monthly in stores. Along with Kroger, customers include Walgreens and Giant Eagle’s GetGo convenience stores.
While retail media is primarily a means of advertising on ecommerce marketplaces today, the expanded appearance of advertising on in-store screens underscores how the first-party data that powers it can be foundational for a growing range of channels.