Offering customers the option to buy a product online and pick it up in the brick-and-mortar store is not new idea.
In fact, I remember Circuit City offering this option way back in the early 2000s.
However, even though the idea has been around for a while, many stores often fail to meet customers’ expectations.
In order to stay competitive, retailers are going to need to work on streamlining the process.
Why Offering This Option to Customers Is So Important
From the retailer’s perspective, offering the option of buying a product online and picking it up in store helps make the sale and saves the customer and/or the retailer money on shipping, which can still be costly even with the discounts that they receive from delivery companies based on the high-volume of shipments.
It is also something that retailers are being forced to offer based on the competition, as many stores are currently offering this option.
Furthermore, this is something that customers want.
In fact, according to the CFI Group, 75% of consumers indicate that the ability to order online and pick up the item in the brick-and-mortar store is somewhat or extremely important to them.
Retailers Currently Promise Quick Turnaround Times and an Easy Shopping Experience
On the surface, it looks like retailers have a good process in place to fulfill these orders, as many stores currently promise a relatively quick turnaround time.
In fact, according to a post on the Two Cents blog, many major retailers promise to have the order ready in one to four hours from when the order was first placed online. (The turnaround time promised varies by retailer. See the post for additional information.)
What Customers Are Experiencing
While retailers are promising quick turnaround times and a smooth buying experience, this is not always what they deliver.
In fact, according to a recent article on The Wall Street Journal, “A survey of over 1,000 online U.S.-based shoppers by JDA Software Group Inc. shows that, of 35% who opted to buy online and pick up goods in a store in the past year, 50% encountered problems getting their purchases. This is a surprisingly high failure rate of a strategy meant to offset the high costs of conducting e-commerce, said Wayne Usie, senior vice president of retail at JDA.”
Another article on the RetailWire site provides a case study that explains how one retailer botched an order that a customer placed online and opted to pick up in the store.
The comments on The Wall Street Journal and RetailWire articles provide some useful insights into the issues that customers and retailers face when taking advantage of this option.
For example, in a comment on The Wall Street Journal article, Gary Bernard points out that he used the buy online, pick up in-store option for an item that Walmart carried nationally, but didn’t have at his local store. He stated that he used the option in order to save the $5 delivery fee on a $10 item. And, as he explained, it took him about 8 minutes to get the item. After completing the transaction, he came to the conclusion that this option is good for certain items that can’t be purchased at the local store, but he wouldn’t use this option to buy one or two items that could be purchased by just walking into the store and buying them off the shelf. That said, he was satisfied with the process for this type of purchase.
Average Time Needed to Complete a Purchase
A Consumerist blog post written last year highlighted a study that was conducted in 2014 by StellaService that found that, on average, it took customers using the buy online, pick up in-store option less time from the time they entered the store to the time that they completed the checkout process than it took a traditional shopper who found and purchased items off the shelf.
However, this didn’t include the time it took for the store to collect the items for the shoppers and notify them that the items were ready. In the study, StellaService stated, “Items were available for pick up in just over an hour on average.”
It is also interesting to note that the average amount of time needed for the checkout process for the buy online, pick up in-store option took longer than the average time needed at the checkout desk for the traditional in-store shopper, at 3.1 minutes vs. 1.1 minutes, respectively.
Note: Many stores try to encourage traditional shoppers to spend more time shopping at stores, as this often leads to increased sales. However, efficiency at the checkout desk is something that all retailers strive for.
Some Key Issues to Consider
There are a lot of issues that need to be considered when developing the process for the buy online, pick up in-store option.
As a post on the Internet Retailer blog points out, proper training of store employees and adequate signage are extremely important to making this process work as it should. The post also highlights the fact that when you get customers to come to the store to pick up items that they purchased online, there is an opportunity to upsell other items. This can have a tremendous positive impact on the retailer’s bottom line.
In the comments section of the RetailWire post mentioned above, Melanie Nuce, VP, Apparel and General Merchandise, at GS1 US mentions that item-level RFID technology will also help fix some of the problems that retailers are experiencing with the buy online, pick up in-store option.
Final Thoughts
Retailers are always looking for ways to differentiate themselves by providing customers with options that make the shopping experience more convenient.
When done correctly, offering the option to buy online and pick up the items in the store can save customers and the retailer time and money. It also provides the retailer with another opportunity to get the customer in the brick-and-mortar store, which can lead to additional impulse buys.
However, as mentioned above, a study conducted by JDA Software Group Inc. found that often the processes that retailers currently have in place do not always work the way that they should.
These failures can hurt the retailer’s reputation, particularly if problems happen on a regular basis.
The good news is that people are already thinking about ways to improve this process.
Retailers that take the lead and are among the first to provide an efficient and smooth buying experience on a consistent basis should experience positive effects on their bottom lines not only through increased sales, but also through the decrease in expenses needed to get products into customers’ hands.
Keep in mind, successful retailers will need to continually improve the process, as positive word-of-mouth could lead to more customers using the service. This could strain the retailer’s resources even further and again lead to failures which could negatively impact future sales.
However, not offering the service might be worse than not trying at all, as many customers already say the option is important to them.
Photo credits: Mike Mozart and Mike Mozart on Flickr.
