10 Retailers Ruling Curbside & BOPIS
Buy-online-pickup-in-store, better known as BOPIS, was already becoming a staple of modern retail when RIS first ran this feature last January. Then the retail world exploded as the health crisis unfolded. Some retailers adapted by rolling out curbside pickup programs so fast it showcased new standards for what’s possible when it comes to technological implementations.
Now in 2021, it looks like curbside is here to stay. Shoppers have quickly adopted the parking lot fulfillment option and new standards have been set for the BOPIS experience. Sixty-five percent of retailers offer either BOPIS or curbside compared to 52% in 2019, the latest Holiday Shipping study from Accenture Strategy found.
“Retailers, like every other industry, are hard at work trying to adapt to the COVID-19 pandemic,” explained Carlos Aragon, VP of U.S. Channel Performance at global research firm Ipsos. “Those that prioritize curbside pickup while making their customers feel safe, will subsequently continue to see more loyalty down the line. They recognize the gravity of this moment and are rising to meet the challenge.”
Yet despite the level of safety order pickup is expected to offer shoppers, many still reported an inability to purchase goods without coming into contact with a store employee, Ipsos found. Only 51% of pickup encounters were contactless.
Nonetheless, BOPIS and curbside tout many shopper benefits, such as convenience, immediate gratification in some cases, and increased safety. Additionally, as the future of the brick-and-mortar store remains in question, retailers are beginning to see the value in doubling stores as fulfillment centers for e-commerce orders. Heading into the holidays, retailers expanded curbside services and added features like curbside customer alert notifications, updated signage, and dedicated parking. On Black Friday, +62% more retailers messaged click-collect-services like BOPIS and curbside in offers YoY, according to RetailMeNot findings.
So which retailers are making the most of this fairly recent retail technology? In our second annual look at order pickup, we examine the retailers ruling curbside and BOPIS fulfillment, and setting the industry standard as we forge ahead.
If a retailer ever seemed like it had a crystal ball, Target would be it. Target launched its Drive Up service in 2018, expanding the same-day curbside pickup service to all 50 states by August 2019. In 2020, it added fresh, refrigerated and frozen groceries into the mix, offering the perishables through its in-store Order Pickup and Drive Up services at more than 1,600 stores now.
Target’s same-day fulfillment services, which include Pick Up, Drive Up and Shipt, together grew 193% in its November/December period of 2020. Of the three, Drive Up grew the fastest, spiking 500%.
In Target’s third quarter of 2020 its same-day services grew more than 200%, adding more than $1 billion of incremental sales. Nearly $700 million of this growth was from its Drive Up service alone, which increased more than 500% compared with last year. Amazingly, this growth was not at the expense of in-store pickup, which increased more than 50%.
“These services are fast, convenient, reliable and contactless, which explains why they continue to generate very high levels of guest satisfaction,” said Target’s CEO Brian Cornell.
Despite having the foresight to add curbside service nationwide before the COVID-19 pandemic even occurred, Target isn’t resting on its laurels. The retailer has made changes to Drive Up that eliminate the need for an associate to scan a guest phone when they deliver an order. It also entered the holiday season with more than double the number of Drive Up parking spaces compared with a year ago.
In the last quarter, Walmart added pickup capabilities to another 230 stores, bringing the total to 3,700 stores. It also made significant strides in grocery pickup over the last year.
In March last year, Walmart did away with its stand-alone Grocery app, enabling consumers to purchase groceries for pickup directly from the Walmart app. In November, the retailer said it doubled the number of associates working in the online pickup business from what it was a year ago up to about 140,000. In addition to the significant increase in staff, Walmart is using machine learning to figure out the best way to put labor against pickup slots, when to pick the slots, and then when to determine what can be filled.
Walmart topped the list for best retailer for BOPIS in the grocery category, while its Sam’s Club chain ranked first for curbside pickup groceries in global research firm Ipsos’ inaugural E-Commerce Experience Report. Ipsos found Walmart excelled at posting visible signage directing consumers to the grocery pickup area in 86% of locations audited. Sam’s Club boasted a near-perfect performance and notably provided designated curbside parking at 100% of locations audited. The club retailer rolled out same-day curbside pickup to stores earlier this year.
“I think the ability for Walmart to be a real leader in the online pickup and delivery space is real,” said John Furner, president and CEO, Walmart U.S. “And I'm excited about the opportunities that has for us the next couple of years.”
Walgreens has acted swiftly throughout the pandemic to give customers access to Walgreens products online. Orders placed through walgreens.com or via the mobile app can now be picked up inside the store, curbside or via the drive-thru, in as little as 30 minutes, as of November.
“We believe this makes Walgreens the fastest same day retail pickup on a national basis” said Alex Gourlay, co-chief operating officer, Walgreens Boots Alliance.
Over 1.7 million retail pickup orders were completed since the service launched in November and total retail digitally-initiated sales were up over 40%. Curbside pickup is now available in 9,000 stores.
“Despite the tremendous challenges created by the pandemic, our team has worked tirelessly to adapt to the new market realities and ensure our patients and customers have access to healthcare, retail products and services where and when they need them,” said Gourlay.
Ulta Beauty introduced curbside pickup on April 19, 2020. The retailer recently launched a curbside customer alert notification, refreshed curbside signage and established dedicated Ulta Beauty parking spaces at select stores. It also expanded its store locator functionality to include greater visibility to store-specific service offerings and separate store and curbside hours.
E-commerce growth slowed relative to the second quarter, but e-commerce operations delivered a comp increase of 90% for Q3 2020, CFO Scott Settersten said. BOPIS totaled about 16% of e-commerce sales, approximately double the penetration in the third quarter last year.
“Although, e-commerce will likely continue to be a headwind to overall EBIT margins, we are improving e-commerce profitability as we increase utilization of BOPIS, leverage size and scale with growth and get closer to our guests through the expansion of our supply chain network, and we see additional opportunities to mitigate rate impacts in the future,” Settersten said.
Nordstrom began offering BOPIS in 2008, later adding curbside delivery in all U.S. full-line stores. Last year, Nordstrom introduced online order pickup at U.S. Nordstrom Rack stores for Nordstrom.com, NordstromRack.com and HauteLook.com orders in October. The retailer also added the ability for customers to be able to pick up their U.S. NordstromRack.com and HauteLook.com orders at their nearest Nordstrom and Nordstrom Local.
In response to the growing popularity of curbside pickup and in-store pickup, the retailer has been expanding its store fulfillment capabilities, reaching one quarter of online orders being fulfilled at stores.
For more than 10 years, Nordstrom’s full-price business has been able to use all sources of inventory across stores and fulfillment centers by having a single view of inventory. In October, the company further integrated its store and online inventory, which resulted in 30,000 customer choices added to online merchandise selection, more than 10% of online orders picked up at Nordstrom Rack stores and approximately 25% of online orders fulfilled at stores.
THE MICHAELS COMPANIES
Back in April, The Michaels Companies was able to launch its curbside pickup offering under a week, it said. Since its introduction, curbside has the highest net promoter score of all of Michaels’ online channels.
The crafty retailer has also made changes to its BOPIS capabilities. Customers can now receive text alerts when their BOPIS orders are ready for pickup. When opting for curbside pickup, they can notify stores with their arrival via a text from the parking lot.
Michaels added a BOPIS option to its app and improved signage to make it easier for customers to pickup orders at stores. Additionally a new online express checkout option allows customers to purchase their basket in just four clicks.
E-commerce revenue grew 128% in its third quarter of 2020 to $115 million and represented nearly 10% of third quarter revenue. A significant portion of Michaels’ e-commerce sales are fulfilled through BOPIS, curbside pickup and same-day delivery, so the retailer enjoys strong profitability, CEO Ashley Buchanan said.
Bed Bath & Beyond
Website return rates are increasing for BB&B, according to executive VP and chief digital officer Rafeh Masood. Twenty-one percent of its customers placed more than one online order in the retailer’s third quarter of 2020, up from 16% last year.
And the “true hero” driving this behavior is BOPIS, said Masood. About 1.2 million customers placed a BOPIS order, representing 16% of the company’s total digital revenue. He touts the company’s fulfillment prowess, noting that 60% of orders are ready within 30 minutes; its success has resulted in a Net Promoter Score of 80% for these services, up from 49% in May when it was first introduced.
The company’s stores fulfilled more than a third (36%) of its digital orders, and BB&B saw a 25% lift in its online conversion rate for the quarter vs. the prior year.
“We know that a BOPIS or a fulfilled-by-store is almost equivalent to a store-based challenge to profitability,” said CEO Mark Tritton. “So the differential helps us, and has helped us through Q3, and will help us in Q4 in terms of our shipping and profitability costs. So, we think it's here to stay. It is one of the sticky outcomes of not just the progression in BOPIS, but how COVID has fortified this, [as] a new muscle for most retailers.”
Kohl's, which rolled out BOPIS nationwide in 2015, met the pandemic with contactless Drive Up at Kohl’s. Kohl’s was quick to add trunk and backseat pickup to its BOPIS services early last April, as retailers started offering contactless transactions to fight the spread of COVID-19.
The contactless, free service is now available at Kohl’s stores nationwide. Additionally, items on Kohls.com marked as “Free Store Pickup” are available to retrieve within two hours.
In October, the retailer announced it was doubling the number of Drive Up spaces at its store locations, making it faster for customers to pick up their Kohls.com orders.
Kroger’s early investments in contactless fulfillment — including more than 2,200 pickup locations and over 2,450 delivery locations — has enabled it reach 98% of its customers with in-store shopping, pickup, delivery and ship-to-home modalities.
The grocer reduced the cost to fulfill a pickup order in store by double digits in its most recent quarter, compared to the same period last year, while significantly reducing customer wait times.
In April last year, The Kroger Family of Companies announced the acceptance of Supplemental Nutrition Assistance Program (SNAP) benefits for Pickup. The low-contact service allows customers to shop online for groceries on Kroger.com or the Kroger app and pick up their order curbside at a nearby Kroger store.
"Kroger is rolling out a payment capability across our nearly 2,800 grocery stores to allow more customers to access fresh, affordable food and essentials through our Pickup service," said Rodney McMullen, Kroger's chairman and CEO at the time. "We are committed to supporting all families as we work together with our associates and communities and government agencies and health organizations to flatten the curve during this unprecedented pandemic."
Dollar General piloted its BOPIS service DG Pickup during its fourth quarter of 2019. In its most recent quarter, the retailer expanded DG Pickup to nearly 17,000 stores, which is nearly across its entire fleet. Just over 2,500 stores offered it at the end of its Q2.
The retailer also aggressively plugged the service via features in its October and November digital circulars, mobile push notifications, a display ad and promotional page within dollargeneral.com, email blasts, and in-store window posters. It uploaded various videos to its YouTube channel throughout the summer promoting the service.