‘Buy online, pick up in-store’ may lead to more sales
One way that sellers are getting more out of their regular patrons is via “buy online pick up in-store” fulfillment options that drive customers into nearby physical locations. The reason this omnichannel eCommerce strategy works so effectively is that it extends the purchase window even further. If retailers simply fulfill online orders and deliver these to customers, the purchase has been made and the buying window is closed. With in-store pick up, customers may be reminded of other items they need to purchase – maybe a pair of socks to go with those pants or a pair of speakers for the iPod they just purchased. These add-on sales can result in a significant increase in order value and ensure people are buying more from the retailer instead of competitors.
One trend that has cropped up over the recent year is retailers looking to get more out of less. Instead of focusing on ways to grow bulk numbers such as customer base, they are trying to identify opportunities to sell more to existing customers. This is particularly true among Second 500 retailers – merchants that are not in the top 500, but are still forces in the sector.
The concept of add-on sales is nothing new in the retail sphere – that is why many merchants stock inexpensive goods like snacks and magazines at the point of sale in an effort to drive up order value through impulse buys. This is essentially just another way to execute the strategy in the omnichannel environment, as getting customers into the store gives retailers yet another opportunity to sell goods to customers before they conclude the transaction.
Real results from ‘buy online, pick up in-store’ initiatives
Several retailers have discovered real advantages spawned from their “buy online, pick up in-store” programs. They are able to effectively garner more sales from online customers once these individuals arrive at a physical location.
For example, Internet Retailer recently reported on Kirkland’s Q2 2015 earnings call, which specifically pointed to “buy online, pick up in-store” customers as being more valuable than regular shoppers. More than 70 percent of Kirkland’s online revenue in the second quarter was sold utilizing the omnichannel option, with customers utilizing this feature spending nearly twice as much money with the retailer as regular patrons.
“We’ve kind of steered it, but the customer is also responding to it,” chief financial officer Adam Holland told analysts on the call, according to a transcript from Seeking Alpha. “We definitely prefer the in-store delivery because it gets us another store visit, and we have evidence that once those customers go into the store, they are spending more and we’re ringing another transaction.”
Kirkland plans on further retooling its online offerings by working with third-party vendors and drop shippers to help improve the variety of online product selection. The objective here is to give customers options – whether they want to buy online and pick up in-store or purchase items the retailer may not have on hand.
Of course, Kirkland is only one retailer, but the method behind the madness could prove viable for other retailers. As is the case with any business, merchants should look at their own customer base and determine whether their shoppers would respond as well to the option as Kirkland’s patrons did.
Making ‘buy online, pick up in-store’ a reality
While “buy online, pick up in-store” is picking up steam as a popular order fulfillment option, offering this feature is no easy task – it will require retailers to be on point with their order fulfillment processes and test their ability to manage order and customer information.
The order fulfillment part of the requirement is obvious – if customers want to pick up an item in-store, merchants must be able to redirect the order to the appropriate fulfillment location in a timely and accurate manner. Customers do not want to arrive at the store, only to find out the fulfillment request was not delivered properly or they have to wait another 30 minutes for the item to be prepared. In-store associates must be equipped with the tools to receive orders and put them together promptly for customer pickup.
The customer order and information management aspect is also important. Merchants need to be able to attribute sales appropriately if they want to develop their customer profiles and measure the success of their “buy online, pick up in-store” initiatives. This is critical for evaluating the customer response to these offerings, particularly for merchants rolling them out in pilot programs.
At the end of the day, “buy online, pick up in-store” can be an attractive omnichannel initiative that may help drive additional sales. Other merchants are seeing success with these programs, so retailers may want to consider the option.