The Future State of BOPIS and Curbside Pickup

Buy-online-pickup-in-store (BOPIS) and curbside pickup have skyrocketed in popularity since the onset of the pandemic. The flexible fulfillment options provide convenience for shoppers and additional revenue streams for retailers, providing a win/win opportunity and cause for celebration. But the fulfillment option is not without its challenges and retailers must continue to invest in technology and adjust their operations to meet changing market demands. Read on to discover how your peers are meeting these challenges head-on and benchmark your current in-store fulfillment capabilities and investment roadmap against the industry’s best. Spurred by the need to socially distance in the face of the ongoing health crisis, retailers and consumers flocked to BOPIS and curbside pickup in droves over the past two years. Despite the return of a “near-normal,” with stores open at pre-pandemic levels and many of the restrictions that hampered operations lifted, a large cohort of shoppers still rely on the flexible fulfillment option and are poised to do so well into the future. Consumers want their orders as quickly as possible and with the current state of the supply chain unpredictable at best, store-based fulfillment will remain a popular option for retailers and shoppers alike. Eighty-two percent of retailers surveyed report that BOPIS/curbside sales have increased over the past 12 months (Figure 1). Twenty-seven percent saw sales increase by up to 10% over the past year, with a whopping 33% reporting increases of more than 20%. These omnichannel fulfillment options saw a meteoric rise in popularity as shoppers looked for safe and convenient ways to shop during the pandemic. But they came with an added benefit for retailers — increased add-on sales. Shoppers who visited a store to pick up their online order often found themselves adding to their purchase. In fact, 41% of retailers report that shoppers’ average BOPIS order increased by 1-2 items during pickup (Figure 2). What’s more, 24% of retailers report that their average order size increased by 5 items or more — a significant bump and hard evidence that blurring the line between physical and digital should continue to be a top priority. The business case for offering BOPIS and curbside pickup is simple: provide shoppers with added convenience and safety, while simultaneously increasing order size. It is no surprise that IT spend allocated to these now pillars of the in-store experience is on the rise. Survey takers report that 22% of their current in-store tech budget is allocated to BOPIS and curbside, up from 19% just a year ago (Figure 3). Operations (45%) and IT (42%) share the primary responsibility for BOPIS/curbside tech purchases, with marketing (13%) playing a role as well (Figure 4). Shoppers have numerous options when it comes to placing a digital order, but the most popular choices are mobile based. Busy consumers can place an order from the comfort of their couch, a doctor’s waiting room, the beach, anywhere a reliable mobile network can be accessed. Fifty-five percent of digital orders originate on a mobile device (24% via mobile app; 31% via mobile browser). While mobile is the new king of digital shopping, the tried-and-true desktop experience still has its place, with 40% of orders being placed there (Figure 5). Once a digital order is placed consumers have a choice to make — how do they want their order fulfilled? For store-based fulfillment the three most popular options are BOPIS, curbside, and ship from store. Forty-one percent of those surveyed report that more than a quarter of digital orders fulfilled in-store are done so via curbside pickup (Figure 6). Thirty-eight percent of retailers report that more than 25% of orders are fulfilled via BOPIS, and 22% report that ship from store accounts for the same. After an online order is placed and the shopper chooses one of the available in-store fulfillment options, the countdown begins until the purchases are in the customer’s hands. Retailers must have the proper technology in place to inform associates and guide them through the pick and pack process quickly and efficiently. Retailers are becoming increasing adept at this highly choreographed dance, as 29% report BOPIS orders are ready in less than 30 minutes, with 27% reporting the same for curbside (Figure 7). Overall, most orders are ready for pickup in an hour or less — 53% for BOPIS and 54% for curbside. Once the order is picked and packed and ready for pickup, retailers must inform the shopper that their order is waiting for them. The most popular option is e-mail, with 76% of retailers reporting they employ the notification channel (Figure 8). The second most available information channel is text message, offered by 56% of retailers, followed by automated phone call and mobile alert at 29% each. Over the next two years retailers expect to expand their text message and mobile app alert capabilities — 18% of retailers report planned investments. In addition to the one-way communication announcing the status of a pickup order, retailers are experimenting with location technology to enhance the pickup experience. The tech can alert the retailer when an in-store pickup customer is close to the store (parking lot and surrounding area) and has entered the store — allowing associates to be poised and ready to present their order. Currently, retailers rank location technology as a 4.9 out of 10 in its important to the pickup experience (Figure 9), which will likely increase as the tech becomes more widely deployed. The success of a flexible fulfillment strategy hinges on convenience and speed, and regardless of the in-store fulfillment channel they choose, once the customer is in the store wait times must be minimal. Retailers are doing an admirable job in this regard, with 94% reporting wait times of less than 8 minutes on average, and 67% reporting that shoppers wait no longer than four minutes (Figure 10). The benefits of offering in-store pickup are numerous, and smart and nimble retailers were able to pivot operations quickly to provide the service. However, the in-store fulfillment option has brought with it a unique set of challenges, most notably staffing concerns — 73% of retailers named staffing as one of their biggest in-store fulfillment hurdles (Figure 11). The workforce challenge is twofold. The first is a foundational problem, stemming from the ongoing challenges retailers are facing due to a diminished labor pool across the nation. Retailers simply do not have enough staff to operate at full strength. The second is the operational aspect of introducing a new service. Associates must be educated and trained to process in-store pickup, which was named as a major challenge by 39% of those surveyed. In addition to the workforce challenges, retailers point to inventory accuracy (45%), customer awareness (27%), and a lack of technology (18%) as major in-store fulfillment challenges. To meet these challenges retailers are investing in a host of in-store fulfilment related technologies designed to improve operations and the shopper experience (Figure 12). Currently, retailers are in the middle of major upgrades to their personalized marketing (27%), substitutions (21%), up-selling (15%), and data security (15%) technologies. Over the next year retailers plan to upgrade their mobile devices for associates (18%), mobile ordering (15%), and personalized marketing (12%) capabilities — as well as providing a dedicated BOPIS/curbside area (12%). Methodology This research was conducted in September and October 2021. The survey was sent to retail executives at both large-scale and small regional chains. Thirty-three percent of respondents are employed at retailers with revenue north of $100 million, with 12% hailing from retailers with revenue of more than $1 billion per year. Grocery, convenience, and drug retailers represent the biggest segment of survey takers at 47%, with specialty (32%), apparel (12%), and mass market (9%) rounding out the respondent pool. A third (33%) of respondents hail from the c-suite, with an additional 12% holding director and VP (9%) titles. Store operations was the most common core business function among survey takers at 47% followed by IT/technology (23%). Conclusion BOPIS and curbside pickup have quickly become table stakes, but there is a wide gap between those that do it right, and those that simply do it. Retailers must continue to invest in the underlying technology to support in-store fulfillment with a focus on speed and accuracy. As the distinction between digital and physical retailing continues to blur retailers must find ways to drive digital shoppers to their stores, while simultaneously promoting their digital offerings to their brick-and-mortar shoppers. Key Takeaways Revenue Boost: 82% of retailers report that BOPIS/curbside sales have increased over the past 12 months; 74% say that average order size increased thanks to BOPIS add-on purchases in store. Speed is King: BOPIS (29%) and curbside (27%) orders are ready in less than 30 minutes; customer pickup wait times are less than 8 minutes on average at 94% of retailers. Challenges: Staffing (73%), inventory accuracy (45%), associate training (39%), customer awareness (27%), and technology (18%) are retailers’ biggest hurdles to providing a seamless in-store pickup experience. Ongoing Investment: Retailers are currently deploying personalization (27%), substitutions (21%), up-selling (15%), and data security (15%) technologies to make the in-store pickup experience smoother and more appealing.