Retailers, Consumers Face Hurdles With Buy Online, Pickup In Store Services

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Macy’s, Nordstrom, Kmart, Best Buy — major retailers are offering buy online, pickup in store services. “Get your order how and when you want it,” Target advertises online for its various shipping and ordering methods available to customers. Such services are not just geared at saving the consumer time and money but also reducing delivery costs for the retailer. Yet new research shows companies may not be benefiting as much as they hope from this omnichannel strategy, and consumers, too, are experiencing problems with it.

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JDA Software Inc. recently released results of a survey of 1,000 online U.S.-based shoppers that showed half of all consumers choosing the buy online, pickup in store (BOPIS) option experienced problems obtaining their online purchases.

The problem comes from retailers trying to offer a new service to consumers without making any changes to labor in stores. Wayne Usie, senior vice president of retail at JDA, told The Wall Street Journal, that with BOPIS, retailers are actually asking store labor to offer more services than before but are not making any changes to labor expenses. This, Usie said, is straining customer service.

Research by StellaService Inc. reported  61% of retailers that sell products online also offer BOPIS services. It’s clear this strategy is becoming more popular, and shoppers will no doubt try take advantage of the service this holiday season. However, it is also likely be a major test for retailers to see how successful, and profitable, this strategy is.

We recently reported on another survey that showed just 20% of retailers were properly investing in growth strategies to link physical stores to e-commerce operations.

Wal-mart is pushing its BOPIS option, specifically for same-day pickup, as it tries to compete with Amazon’s services. This is becoming increasingly challenging, especially as Amazon now offers free same-day delivery to Prime members in 16 cities. For retailers with brick and mortar stores, such services are harder to achieve. Greg Kefer, of GT Nexus, told Fortune Magazine, “Retailers lack the infrastructure and agility on the back end to deliver inventory across channels.”

It does seem retailers have some kinks to iron here with BOPIS services. Fortune magazine made a good point: with BOPIS services, a shopper buys an item online and selects the most convenient store location to pick that item up in person. To provide this, a store employee is taking that product off a shelf that another employee was paid to stock.

Something is off there. Additional labor, unnecessary labor, inventory management challenges — the problems are clear. How retailers will respond and hopefully improve their BOPIS strategies, especially at such a busy time of year, will be interesting. This holiday season will likely provide a learning experience for retailers. But, as the JDA report showed, ensuring customers are happy is key.

Consumers are unforgiving of service failures for online orders,” the report said.

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