Buy Online, Pick Up In-Store Requires New Ways of Thinking

The staying power of buy online, pick up in-store (BOPIS) comes down to two simple facts: consumers are demanding it, and retailers need it.

JDA Software’s 2017 Consumer Survey found that 50 percent of consumers had used BOPIS in the previous 12 months, a 43 percent increase over two years ago. But what about retailers?

A new study by Signifyd of 250 decision makers at retail companies with more than $100 million in annual revenue found that 44 percent viewed BOPIS as a competitive imperative. Another 38 percent said BOPIS was key to bringing shoppers into the store, where they make additional purchases.

The numbers illustrate the dramatic change in the relationship between digitally savvy consumers and retailers. Some have labeled this shift as a “retail apocalypse” for brick-and-mortar. Nothing could be further from the truth.

Providing in-store pickup of online orders is a both a tremendous opportunity and challenge for retailers today. Nearly 58 percent said 11 percent to 30 percent of their online revenue resulted from orders picked up in-store. Another 26 percent said the figure was higher than 30 percent.

And yet retailers acknowledge that providing BOPIS can be a struggle. It requires mastering the frictionless speed of online commerce and the human touch of physical retail.

Inventory management and tracking needs to become less art and more science. More than 45 percent of retailers said logistics and inventory tracking were their biggest challenges with BOPIS. Another 22 percent said managing and training store staff, now with new responsibilities, was the hardest part of getting BOPIS right. And 16 percent said new worries about BOPIS fraud and the security of customer information is what keeps them up at night.

Tamping down BOPIS worries takes new tools and new approaches. RFID tags and other technology provide for item-specific inventory tracking, meaning retailers can know exactly where a particular product is and where it needs to be in order to be picked up in-store.

Increased training and mobile devices help store associates in their new roles as fulfillment experts and concierges at the BOPIS counter.

Furthermore, now that machine learning can bolster fraud protection by crunching thousands of transactions and vast sets of data, orders can be secured without heavy reliance on matching credit card billing and delivery addresses. The innovative models are good news for retailers given that BOPIS orders, by their nature, are placed without delivery addresses.

Machines also can accommodate for speed when buying online and picking up in-store. A key promise of in-store pickup is a customer's ability to have his or her order in hand within an hour or two. In the past, retailers simply couldn’t keep up with the order-processing speed that quick pick up requires at any significant scale.

The end goal of BOPIS is something as old as retail itself: providing a memorable customer experience. Creating the right customer experience with BOPIS comes down to five best practices:

1. Overcommunicate. When a customer places a BOPIS order, send an immediate confirmation. Include clear directions, when the order will be ready, where to pick up in-store, and what forms of identification are required.
2. Combine online and in-store inventory and order management systems. Have absolute insight into your inventory — the what, where and how quickly an item can get to the store where it’s needed.
3. Consider automation. Kiosks can authenticate customer identity before they arrive at the pickup counter. GPS systems can alert associates on the arrival of a BOPIS customer.
4. Follow fraud best practices. Consider a customer’s order history. Have you seen this customer before? Is he or she BOPIS user? Have orders from the same customer come in unusually quickly or in unusually high numbers? Understand that traditional fraud management systems that rely on matching billing and shipping addresses won’t help with BOPIS orders. Rely on additional signals, such as online behavior, social media activity, device identity and IP address. Go beyond confirmation emails to verify identity with matching IDs and credit cards.
5. Use secret shoppers. Evaluate your procedures and practices with hired shoppers who can determine whether associates are following established safeguards and delivering on BOPIS’ promise of convenience. Approach the effort as an educational program, not a punitive one.

Raj Ramanand is CEO and co-founder of Signifyd, a fraud protection service provider.