The 2017 holiday shopping season was largely considered a disaster for many online retailers and delivery partners. Logistics networks struggled to cope with a record number of online orders—DHL, FedEx, and UPS all experienced delays and tens of thousands of packages were delivered late. For today’s consumers who expect fast service and maximum control over their buying journey, such results are unacceptable.
Increasingly, consumers are making purchasing decisions based on the availability of omnichannel buyer experiences. IBM research suggests a majority of consumers consider two-day shipping a priority when making a purchase decision, while 74% want the option of in-store pick up and return.
Leading brands have noticed and are taking action. To meet customer expectations while controlling their own order fulfillment costs, retail chains are investing in click and collect infrastructure—online ordering with brick and mortar location pickup. Last year Walmart added 450 pickup towers to its stores around the US. As part of an $11 billion investment, Home Depot intends to install pickup lockers in all of its stores over the next three years. Best Buy and Target are also expanding their buy online pick up in-store (BOPIS) capacity.
The demand for in-store pick up is on the rise and retailers need to be ready to integrate this function into their order management processes.
The growth of click and collect
As every multichannel shopper is aware, certain hassles come with both online and in-store purchases.
Online shopping always comes with the risk of not being able to physically see or touch the item(s) in the order. Shipping may seem to add an unreasonable cost to the order, and customers can end up waiting a long time before they actually receive the shipment. Moreover, the process of online returns and refunds can be agonizing.
Traditional brick and mortar shopping experiences can be frustrating in their own right. You have to take time out of your day to make the trip, lines can be long, and there is no guarantee the store will have the items you’re looking for.
With 68% of consumers now using BOPIS options, it is clear that more shoppers view click and collect fulfillment as the middle path that can resolve these frustrations.
Despite growing consumer demand, one-third of retailers are not equipped to support click and collect fulfillment.
Integrating click and collect into your order management process
With its many subprocesses, order management is already a complex chain of workflows and hand-offs that must go according to plan to meet customer expectations and satisfy business requirements. Click and collect fulfillment does add another layer of complexity, but offers strong return on investment when done properly.
Click and collect is a technology-dependent service and will require integrated backend processes. Most importantly, your order management system must provide real-time inventory management and visibility. When an order is received, you’ll need to rely on an order management system to either assign the order request to the designated pickup location or generate a transfer order request and dispatch it to a store or depot that has the appropriate stock.
Transfer orders involve more hand-offs, each of which needs to be accompanied by a digital workflow so your staff can track orders and customers can be kept in the loop. With an advanced inventory management solution, you should be able to transfer inventory and track items by bin number, serial number, description, weight, and price.
Whether orders are filled in-store or transferred to the pickup location, you’ll want optimized picking, packing, and shipping so that the correct items are pulled quickly, efficiently, and at cost. Achieving this typically involves organizing warehouse and stockrooms in accordance with First-In, First-Out (FIFO) or First-expired, First-Out (FEFO) principles, and providing workers with predetermined picking routes and packaging instructions.
To build better customer profiles and cater to specific preferences, your order management system should be equipped to collect customer info both online and in-store. This also means customers should be able to complete payment at the time of their online check-out or via your POS system when they come in for pickup.
Best practices to capitalize on the click and collect market opportunity
The primary reasons consumers choose to buy online and pick up in-store are convenience and speed—every part of your order process needs to be designed to meet these customer expectations.
Most consumers making click and collect orders expect instant confirmation of their order, while 78% expect to pick up their order within 24 hours. Internal processes need to be swift and each hand-off should trigger an automated customer-facing update. Customer updates are generally communicated via email or SMS message, and should include the following:
- Purchase confirmation – This lists order items, includes the invoice, and pickup instructions
- Shipping update – Notifies the customer their order has shipped and the estimated arrival time
- Ready for pick up – Order has arrived and is ready for pick up and a recap of pickup instructions
- Pickup reminder – Send pickup reminders at appropriate intervals
Accurate pickup windows
Remember, customers have chosen this option for convenience. If you miss a customer’s promised pickup window you might lose their business. Collect data on fulfillment cycle times so your pickup estimates are accurate, and keep safety stock of popular items to avoid lengthy procurement cycles.
Dedicated pickup areas
Don’t make your customers traverse the store to get their pickup. Only 8% of online buyers are willing to go to the back of the store to get their pickup order. Have a dedicated pickup area with a sales attendant to check customers out or use self-checkout lockers like Walmart and Home Depot.
Offer personalized promotions
It’s true that in-store shopping trips are most profitable for retailers because customers make unplanned purchases. According to Forbes, 85% of click and collect customers make an additional purchase when they arrive at the store. By using the customer data you have been collecting to build shopper profiles, you can further boost this percentage by sending personalized coupons (for in-store use) to customers who make online purchases. This same tactic can be used coax online-only shoppers into the store.
The benefits of click and collect fulfillment
When executed correctly, there are clear advantages to click and collect fulfillment for both retailers and consumers.
According to Reuters, stores that implemented click and collect solutions experienced 47% higher sales in the 2018 holiday shopping season compared with the previous year. What’s more, BOPIS customers spend an average of $40 on unplanned purchases when they come into the store for pickup. In addition, the cost of the final mile delivery is transferred to the customer, helping the retailer cut costs on shipping and logistics and increase gross profits.
By the same token, customers can avoid what they may view as exorbitant shipping fees with the added benefit of being able to physically inspect their items before they accept the order. Store pickup also enables the customer to seek immediate customer service, and refuse or return the order with minimal hassle. Ultimately, this method gives customers maximum control over their buyer experience.
With the availability of affordable digital solutions to support click and collect, this fulfillment option is not only available to industry giants like Walmart and Target, but growing retailers as well. To reap the benefits of click and collect fulfillment, your company will need to:
- Unify data and workflows across your order management framework
- Have access to real-time inventory and item tracking
- Provide timely and accurate customer updates through automated notifications
- Leverage customer data to offer more personalized services and promotions
- Optimize every aspect of the order process for speed and convenience
Instead of waiting for the next holiday rush, now is the perfect time to consider how click and collect fulfillment could bear gifts for your company and its customers.