How to Execute on Your Omnichannel Retail Playbook
There’s no doubt omnichannel retailers are best positioned to capture market share as consumers increasingly search for the most convenient ways to buy. Despite understanding this concept, retailers have yet to master omnichannel experiences. In part one of this blog series, we highlighted retailers’ challenges with BOPIS and endless aisle. The concluding piece will explore the final three basic omnichannel plays – ship to store, ship from store, and buy online, return in store (BORIS) – and explain why retailers are struggling to get these omnichannel experiences right.
Ship to Store
Ship to store gives customers the option to have their online orders shipped directly to the store. While BOPIS allows consumers to choose items that are currently in stock, ship to store lets shoppers select from the full catalog, even from items that are out of stock or unavailable near their specific store location. In essence, ship to store is a meld of both BOPIS and endless aisle.
Ship to store also offers the benefits of security and peace of mind for consumers. In an age where package theft is a growing problem in the US (31% of consumers report being personally affected), retailers can offer a secure delivery alternative for high-value merchandise. While 92% of those surveyed in a 2017 report on package theft said they prefer items be shipped to their homes, more than one-third have sent a package to an address other than their home to prevent theft. Additionally, only 22% of respondents said they would be comfortable spending more than $1,000 for an item that is shipped to their home. For retailers, the ability to keep larger, more expensive items safe through direct pickup can be the difference in driving purchases of big-ticket items.
Though it offers shoppers many benefits, ship to store does come with its share of challenges. Like buy online, pick up in store, ship to store obstacles include having to manage separate inventory, and training staff to properly direct and serve customers that ordered their items digitally.
Ship From Store
Ship from store uses in-stock items to fulfill online orders. This omnichannel journey helps to speed delivery and make more options available to shoppers – when items are out-of-stock at a distribution center, ship from store allows retailers to still fulfill orders. One in three retailers are expected to have ship from store in place by 2020. Many retailers are using buy online, ship from store to better compete with ecommerce giants. By attaining greater visibility of in-store products, they can make those inventories accessible to online shoppers.
Retailers that have tested the concept have seen higher sales, faster delivery times, improved margins, and lower costs.
Though there have been some high-profile successes with ship from store, last-mile delivery continues to be the primary barrier for its adoption. Last-mile delivery can come with high costs and complexities, and many stores simply aren’t equipped to handle it. In fact, the last mile is the most expensive part of the shipping process, accounting for 53% of the customer delivery costs, even though it makes up the least amount of time.
Companies can establish an on-site fulfillment center, but that calls for new capabilities, space in the store, and extra training for associates. New approaches to inventory management must consider online orders and traditional customer traffic.
Buy Online, Return in Store
One of the greatest consumer hassles with ecommerce has been the complexity and cost of returns. Buy online, return in store (BORIS) eliminates the hassle of packaging and mailing for consumers. It also reduces shipping costs for the retailer and offers the potential for more sales by bringing the consumer into the store.
Return policies can now create a competitive advantage for retailers. Nearly half of shoppers returned an online order in the past year and actively check retailers’ return policies before completing an online transaction. They also said returning to a store enables them to get immediate credit and shop for other items while they’re at the physical location.
Most major retailers, including Best Buy, Target, and Walmart, now offer buy online, return in store. Amazon sought a partnership with Kohl’s to offer return-in-store capabilities and is also allowing returns at some Whole Foods locations.
BORIS can significantly add to the volume and complexity of returns a store must process, requiring new systems, space, and staff in place to accept, process, and distribute items back to their appropriate locations. As with BOPIS, some consumers say there’s often a disconnect with staff either taking too long or not having the experience to process omnichannel returns.
While most retailers strive to meet omnichannel expectations, many struggle with the experience. There remains a large gap between customer expectations and retailer performance due to a lack of relevant or helpful feedback. Brands often have no idea how customers will respond to their omnichannel plays, and customer satisfaction is diminished before they find out there is a problem.
Real-world testing is a leading solution that the world’s top retailers employ to gather valuable customer feedback on omnichannel experiences under the actual scenarios they will be used. On-demand, real-world testers can identify functional issues, evaluate the ease of use of experiences, and ensure each channel and experience flows consistently and seamlessly into the next. These real-world testers help validate technology, in-store preparedness, and digital experiences to help retailers build customer loyalty, drive sales, and launch omnichannel initiatives with confidence.
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