Today’s consumers have infinite shopping choices and rising expectations for a positive customer experience. They’re demanding more flexibility and convenience, both in how they make purchases and returns. With this, we’re seeing many retailers look to omnichannel capabilities to augment their existing customer experience, perhaps most notably including BOPIS (buy-online-pickup-in-store) and BORIS (buy-online-return-in-store).
As of 2019, 68% of US consumers bought a product online, only to pick it up in-store, with many of them citing quick access to their purchased item as the main driver.1 Further, according to Optoro research, 87% of consumers would rather return an item to a physical store instead of mailing it back—regardless of how they purchased it—primarily for the ability to receive a quick refund.2 Given these trends, BOPIS and BORIS strategies are becoming critical success factors in leveraging the storefront as a competitive differentiator.
So, what can retailers do to build out and optimize their own BOPIS and BORIS capabilities? Senior Manager Lee Whitaker of The Parker Avery Group sat down with Optoro to share insight from his 20+ years of working for and advising major retailers.
Q: Which types of retailers are best suited for BOPIS and BORIS?
A: There’s no hard and fast rule when it comes to considering adding BOPIS and/or BORIS into your retail strategy. Any retailer looking to differentiate themselves in a crowded, competitive landscape should evaluate whether adding these types of programs can help their business accomplish this—and the sooner the better. In many retail categories, BOPIS and BORIS are quickly becoming a baseline expectation for the everyday consumer. We discuss this dynamic in a recent Parker Avery point of view, ‘A Win for Both Sides: Benefits of BOPIS for Consumers and Retailers.’
BOPIS can be particularly applicable and valuable for retailers with product categories that consumers associate with instant gratification. For example, soft goods/apparel, accessories, personal care, beauty, and small home goods are all product types that customers may be looking to acquire on short notice, so giving them the BOPIS option can help drive foot traffic into your store, rather than to your competition around the corner.
BORIS is a great option for retailers that sell ‘return friendly’ items that are easy for the consumer to transport from point A (usually their home or business) to point B (your store). Keep in mind that most consumers won’t have the direct means to bring heavy or bulky items into your store by themselves, so you may want to consider outlining BORIS restrictions for certain product types (clearly and explicitly) in your return policy, and maybe even double down with a friendly automated reminder before the customer clicks ‘complete purchase.’
Ultimately, a retailer should take note of what’s important to its customers and let that determine whether BOPIS and/or BORIS can add value.
Q: Should retailers offer both BOPIS and BORIS, or just one or the other?
A: If you have the team, investment dollars, and technical infrastructure in place to implement and support both programs without other aspects of your customer experience being negatively impacted, then absolutely, yes.
In retail today, it’s imperative to offer customers flexibility that delivers memorable, satisfying, and consistent experiences. Considering the average conversion rate in stores (35 to 60%) is much higher than the 3% seen in online purchases, retailers should seize every meaningful opportunity to drive customers into the physical store. Store visits can translate to incremental sales, positive customer interactions, and even ‘save the sale’ opportunities.3
Always consider the end-to-end impacts that these new programs will have on your organization and the fact that each capability typically requires unique enhancements, changes or investments related to existing processes and fulfillment and/or returns systems.
Q: What are some of the implications of offering BOPIS and BORIS?
A: Both BOPIS and BORIS have their own unique ripple effects, but for the most part, you can expect more engaged, satisfied, customers who are certainly more motivated to buy, but who could also be more motivated to order multiple styles or items in different sizes and return the unwanted items later. Let me explain further.
- More motivated to buy. At a minimum, BOPIS and BORIS can help retailers meet steadily rising expectations for multi-channel customer interaction. IDC Research shows that on average, the lifetime value of multi-channel customers is actually 30% higher than that of a single-channel customer.4 Giving consumers the opportunity to interact with your brand/business across multiple touchpoints not only leads to greater stickiness, but greater revenue. As previously mentioned, motivating customers to come to the store to pick up or return their purchases presents an excellent opportunity for upsell or “save the sale” with an in-stock alternative. As we reported earlier, Optoro research shows that 87% of consumers prefer to return items directly to a physical store, and that 86% have even made another purchase while they were there to make a return.5
- More motivated to return. On the flipside, as a result of implementing BORIS and giving consumers an easier and (ideally) frictionless way to make returns, some retailers may even see an uptick in returned merchandise—already visible in the fact that ecommerce return rates typically hover around 20-30%.6 Managing returned items that are initially purchased online often involves added complexity/considerations your store staff must now handle. In these cases, consider leveraging a returns optimization platform, like Optoro, to ensure you’re maximizing recovery/minimizing processing for returned goods—ultimately resulting in the best decision for every item that comes back to your stores.
Q: What does it take to implement a BOPIS strategy?
A: The first requirement is a commitment to change in marketing, in systems, in processes and in people. To implement BOPIS successfully, retailers often need to make enhancements to just about all existing functional strategies as well as ensure that a solid change management strategy and tactics are in place from the onset to prepare associates (both at the store and corporate level) for new processes, revised roles and evolving responsibilities.
Tactical elements to consider include:
- Core merchandising systems (e.g. DOM, OMS, ERP, WMS) need to be integrated and primed for unified commerce with accurate inventory, master data, and attributes supporting optimization and prioritization.
- Stores and distribution centers may need to accommodate new storage and/or operational activities to support more frequent but smaller fulfillment cycles.
- Online messaging and marketing strategies should accurately guide customers from order to collection with meaningful and timely communication.
For a retailer considering implementing BOPIS but who wants to formally gauge customer appetite prior to investing major resources, buy-online-ship-to-store (BOSTS or BOSS) can be a lightweight and usually less complex option to implement first.
Q: What does it take to implement a BORIS strategy?
A: Similar to BOPIS, BORIS also requires a mindset of commitment to changing existing technologies, systems, and processes. While BORIS may necessitate fewer intricately involved integrations than BOPIS, retailers will still want to take into account some of the risk that comes with offering BORIS if their stores aren’t adequately prepared to accept returned purchases that originated online.
Tactical elements to consider include:
- New processes required to prime stores to accommodate online returns, including storage, staging, prep and packaging—unless otherwise denoted on the online product page or return policy, stores should be prepared to accept all returns, even online exclusive SKUs and what may be considered incongruent inventory
- Increased need for decision support/optimization tools to minimize added cost to returned items and shorten the cycle time to final disposition
- Potential enhancements to markdown strategy to account for higher volume of returned inventory on hand
If done right, the payoff in customer experience and overall satisfaction can be significant.
Final Word
When it comes to what BOPIS and BORIS mean for your business, the most important thing to consider is the overall impact on customer experience. With the right planning and investments, these types of programs can drive significant value and upside for your business, but the first critical consideration is thoroughly understanding the full scope of what you’re getting into before making any new commitments to your core customer.
If you’d like to learn more about how BOPIS and/or BORIS can work for your business, we invite you to reach out to The Parker Avery Group; to see if implementing a returns optimization platform could be right for you, visit www.optoro.com or email partners@optoro.com.
References:
1 Business Insider, 2019.
2 Retail Returns and the Consumer Experience, Optoro, 2018.
3 ETP Group, 2016.
4 IDC, 2015.
5 Optoro, 2018.
6 Shopify, 2019.