In 2019, a lot of the retail spotlight was focused on BOPIS, Buy Online Pick Up In Store. Brick and Mortar retailers rushed to attract the latest trend of shoppers who wanted to save time and shipping costs by purchasing items ahead of time online and picking it up in store. Retailers loved how it was driving foot traffic to their stores, often leading to additional purchases once they were on site. Now, enter 2020 and COVID-19; another wrench is thrown into the retail industry. Retailers who were hesitant to implement BOPIS are now forced to offer the option or risk losing sales. 2020 not only highlighted the importance of BOPIS, but it also introduced a sister option: BOPAC, Buy Online Pick Up At Curb. According to a recent study, curbside orders have increased by 208% during the pandemic, and 59% of customers say they are more likely to continue curbside pickup after the pandemic.
BOPIS and BOPAC continue to be a perfect option for the customer but can be challenging for the retail store owner. There is an ongoing risk of not having the item on hand when the customer comes to pick it up. A failure to fulfill can alienate the customer for good. If a customer walks into a store and that store does not have the shoes they want, they may leave disappointed but are likely to return. If a customer purchases specific shoes online and gets to the store to pick them up, and they do not have the shoes in stock as promised, the chances of that customer returning are much less likely. Retailers can prevent these failures by taking a localized approach to correctly forecasting demand and using predictive analytics to pre-position inventory at the right levels and in the right locations.
Retailers often forecast in-store and online demand separately and this can lead to an increase in carrying and supply chain costs and can cause either an overreaction or an under reaction. A more effective approach combines in-store and online demand into a single forecast that accounts for how the two demand streams will affect one another. A single forecast shows how to make optimal use of the current supply chain to fulfill demand, maximize margins, and lower the risk of customer turnover. 4R’s approach to BOPIS and BOPAC considers demand according to where the product is intended to be fulfilled instead of where it is initiated. It then uses machine learning and predictive analytics to generate a forecast to account for both streams. A strong predictive analytics solution accounts for things such as cannibalization, halo effects, case-packs and display minimums, and the risk of losing a customer.
With the state of the world still unknown, BOPIS and BOPAC are becoming increasingly important with the approaching holiday shopping season. A large majority of customers are saying they’re likely to continue online purchasing, which means retailers who haven’t yet jumped on the curbside pick-up train are going to want to do so before the holiday shopping rush. If done right, BOPIS/BOPAC is an effective strategy against strictly online offerings. It increases customer satisfaction due to immediate availability and flexibility and leads to an increase in margins and a reduction of stranded inventory in the store.
To learn more about BOPIS, BOPAC, and 4R’s approach, contact us today at firstname.lastname@example.org.