Customers want it
Econsultancy’s Christmas 2012 Online Shopping Survey, polled 1,000 UK and 1,000 US online consumers on their shopping habits. One of the things we asked about was the use of in-store pickup services – referred to as reserve and collect here.
There is a massive difference between the US and UK in take up of ‘reserve and collect’ services. While popular with Brits (40% used them over Christmas), take up in the US is much lower, at 17%.
Q: Did you reserve any items online for in-store collection this Christmas? (1,000 UK and 1,000 US respondents)
I asked Linda Bustos, who writes the excellent Get Elastic blog why there may be such a difference in take up of these services:
Amazon and other pureplays may represent a higher proportion of shopping, with no ship to store option. Also, many US stores may have been offering free shipping, negating the benefit of going to the store to pick it up to save costs (whilst battling for parking and enduring line ups).
I actually did do an in-store collect this year and it was not a good experience. I ordered several books (from the long tail) available from my local book chain, and they all came at separate times (I did not realize the first visit would only have 1 of the books waiting for me), and I had to find parking and stand in a huge lineup to collect them.
This makes sense, though I think there are still compelling reasons for offering this service, more of which I’ll come to later. For example, in-store pickup accounted for 31% of total sales for Argos, one of the UK’s biggest retailers, in 2013.
So, while take-up in the US may be low for now, i would expect it to grow as though the geographical challenges are greater in the US, the reasons for offering in-store pickup are the same.
It fits in with customer research behaviour
Even if people don’t end up buying on the internet, they like to research their purchases online.
94% of respondents to our survey (conducted online) said they always or sometimes check online before making a purchase.
Do you research purchases on the internet before buying from a local store?
By providing the in-store pickup option, retailers are ensuring that, if a customer hits their site to research products, they can ‘lock them in’ for the offline purchase by making sure a product is there for them to collect in the store.
It saves time for consumers
It’s a busy world, and if you can save customers some time and thus make their lives easier, they’ll appreciate it.
Reserving products for them means they needn’t go from shop to shop looking for a copy of the latest games console, gadget, or lawnmower.
They can just head to your store knowing it will be there for them to collect.
Even if they don’t buy online, they may head to a store anyway
One by-product of offering BOPS is that it allows customers to check stock levels at their local store.
So, even if they don’t actually reserve and pay online, they may head to the store to get a feel for the product before buying in store.
The potential for cross selling in-store
When customers head into your store to collect an item reserved online, this brings with it the potential to add incremental sales to the original reservation.
Let’s say they’ve reserved an iPad. While they’re picking this up, they may see a cover they like, or decide they need to have useful add-ons such as keyboards and headphones.
It helps to give multichannel retailers an edge
BOPS is one option that online pureplays like Amazon cannot offer. In many cases, it’s inconvenient to wait at home for orders to come, perhaps customers will want to save the shipping fee, or maybe they just want the item ASAP.
In this way, in-store pickup can appeal to a ‘want it now’ mentality. Rather than waiting for Amazon to ship the item, you can reserve and collect in store that day.
It’s also very valuable during the holiday season. When online retailers can no longer guarantee to ship orders in time for Christmas Day, multichannel retailers can still offer in-store pickup right up to the last minute.
It increases in-store sales
This excellent article from Kellog Insight explains a useful piece of research which looked at the effects of BOPS on purchasing habits both online and in-store.
The researchers looked at ’a major retailer with more than 80 stores in the U.S. and Canada’, comparing the behaviour of customers who weren’t close enough to get to a store with those who could.
According to the article:
Conventional wisdom said that offering customers the BOPS options would increase online sales; after all, a BOPS purchase counts as online revenue since shoppers pay through the website. But when the researchers examined the data, they found that online sales were actually going down in areas near a store, compared to areas far from a store, after BOPS was implemented.
Odder still, online sales were decreasing even as traffic was increasing on the retailer’s website. And when Moreno and Gallino turned their attention to brick-and-mortar stores, they found increases in sales and visitors at American stores, which offered the service, compared to Canadian stores, which did not.
The research also found that, even when online sales fell slightly, overall sales increased as the in-store sales more then made up for the online drop.