Stronger Together: BOPIS and AI-powered Personalization
Now trending: BOPIS (or BOPUS)
“Buy Online and Pick Up In-Store” (BOPIS or BOPUS) has been around for a while, but it’s only now that BOPIS is picking up pace amongst retailers as a key pillar of their omnichannel strategy. Interestingly, in the early days, it was called “click-and-collect”. In a nutshell, BOPIS is the act of customers ordering items online via mobile or web, and then picking up their ordered items from the brick-and-mortar store later — usually on their way to work or while on their way home. In a way, it’s the antithesis of ROPO — Research Online, Purchase Offline.
Globally, BOPIS is considered the most valuable aspect of the retail shopping experience for more than four in 10 consumers, according to a February 2019 report from iVend Retail. In fact, the popularity of BOPIS has been a key accelerator behind the growth in eCommerce transactions over the past couple of years. Not surprisingly, big-box retailers have announced big plans for leveraging BOPIS. Wal-mart announced its Wal-mart Grocery Pickup offering recently, while Target put a more innovative spin on it by offering Curbside Pickup, in which store employees actually bring out the products customers ordered to their vehicles.
Why do customers care?
The consumer sentiment is certainly in favor of new, more convenient shopping methods. In February 2019, Periscope By McKinsey asked 1,101 US consumers whether they planned to use delivery services, and 72% responded favorably. Additionally, 41% said they “definitely” would use store pickup.
BOPIS reinforces the theme that customers want to engage with brands at the touch points that they want, at the time they want. Essentially, it gives them flexible fulfillment, control over pickup schedule and ease of overall shopping experience. We know that customers are always looking to save time shopping. But, for a variety of reasons, they may feel more comfortable picking up items in person, whether it’s for security or because they need that item today.
Additionally, customers can avoid shipping costs by being more willing to pick up their order from the store. Two of the biggest challenges with online shopping is assuring fit and discerning product attributes like feel and texture. Completing the purchase in-store allows customers to inspect the product, and potentially return it in-store, before committing to their purchase.
Why should retailers care?
Higher customer engagement
BOPIS solves a number of the top reasons for online cart abandonment — unexpected shipping costs, no express shipping and unacceptable return policies — and engages customers at a new level. Since the industry average for online cart abandonment is more than 80%, retailers who choose to offer BOPIS to customers stand to win back some lost online engagement.
BOPIS improves profits in many ways. First of all, retailers can leverage their hub and spoke warehouse model to avoid shipping costs. Secondly, once customers walk into the store for picking up an order, there’s a good possibility that they will indulge in impulse buys or some window-shopping, which may convert into more purchases down the road. In fact, an OrderDynamics study corroborates this — it found that 37% of customers that had used BOPIS services bought more items that they weren’t planning to purchase when they came into stores for pickup. Thirdly, retailers can generate more cross-sell orders through interesting offers via personalized promotional emails or messages (in-app or SMS) to the customer. When the critical holiday shopping season comes up, the collective impact of these factors adds to significant revenue and profitability growth.
Better customer retention
Due to its unique benefits, BOPIS empowers brands to delight the customer through differentiated experiences. By offering flexible fulfillment options (and even allowing potential returns in the same location if the products don’t meet customer expectations), retailers can encourage their customers to return for more. This benefit offers a significant advantage, especially since it costs 5-6 times more to acquire a customer than to retain one.
Personalization enables powerful retail use cases
In a time when the eCommerce is hyper-competitive, BOPIS offers the ability to grab bigger market share through differentiation. That is why retailers with both online and physical store presence should definitely consider offering BOPIS options to their customers in order to drive more profits, boost customer engagement, and enhance customer loyalty. BOPIS also spells a big opportunity for Direct-to-customers (D2C) brands — such as Casper, Harry’s, Bonobos, The Dollar Shave Club — that are now foraying into the physical space. By adding BOPIS capabilities, these brands and others can leverage omni-channel customer engagement really well and grow their profits.
It’s important to recognize the value of personalization. As consumers become more and more acclimated to getting what they want, their expectations from retail marketers have never been higher: for personalization, for meaningful experiences, and for relevant engagement. Customers will purchase from retailers that recognize them as individuals at every step of their journey … and align themselves with brands that make they buying experience as simple and convenient as possible.
In addition to BOPIS support, those retailers with both offline and online presence can maximize order volume and shopper conversion by leveraging real-time intelligent personalization solutions. When a mature AI-powered personalization engine powers the eCommerce experience for shoppers, many interesting use cases become real in the retail space.
To begin with, personalization engines can integrate with real-time inventory and pricing data sources at the store level to offer store-level product availability and pricing to online customers — enabling BOPIS. Alternately, the AI can also automatically choose or suggest the store whose inventory should be shown based on the shopper’s context (ex. location, pick up time) and preferences. Either way, this generates qualified incoming store traffic. Showing accurate product availability and pickup options by store is important for customer experience — it helps retailers avoid situations that lead to bad customer experience, such as a customer placing an order, only to realize that it cannot be picked up at the store.
Once the customer has placed a BOPIS order, the personalization engine can influence cross-sell of related products via hyper-targeted promotional emails that are sent to the customer ahead of time. The important principle here is that these emails would have recommendations that are highly personalized for the customer’s profile — up to the minute when the email is opened.
For example, assume the customer has walked into the store for the pickup and has engaged in window shopping. Now In-store representatives can engage with these customers by using a tablet/mobile app integrated with the online personalization engine via APIs. Through these hyper-relevant recommendations, the retailer can drive more in-store conversions or take the customer further along their shopping journey.
As an additional windfall gain, retailers can also expect customers to engage in impulse purchases once they are in the store. Per a study by Doddle, 85% of shoppers surveyed said they made additional in-store purchases while visiting stores to pick up what they already purchased online. According to retail solutions firm Field Agent, 65% of shoppers said they make more impulse purchases in-store versus online. Another study by new-product analytics firm First Insight discovered that both males and females were more likely to make unplanned purchases in-store vs. online.
Finally, retailers can integrate the in-store customer engagement analytics with the personalization engine to further shape the future online engagement for those customers via search or recommendations. This completes the online-offline-online feedback loop, which is the personalization nirvana that retailers crave.
Choose your personalization solution carefully
To realize these benefits, retailers should select a mature AI & NLP-powered eCommerce personalization solution with the ability to deliver the above-mentioned use cases around the integration of the physical and online retail worlds. This personalization solution should have true 1:1 personalization and a cohesive customer experience across all digital touchpoints — be it homepage, search, product recommendations, category or landing pages, or emails.
At the same time, the solution should deliver contextual-targeting of visitors, granular merchandising controls, intuitive analytics and be built on the latest technologies to scale when needed. Ideally, the solution should have a microservices based architecture so retailers integrate personalization across channels – even via in-store apps, digital signage or kiosks.
Grow with Reflektion
By exploring a mature AI-powered eCommerce Personalization solution like Reflektion, retailers can improve online conversions by 20%, increase average order value by 60% and grow revenue per visit by 75%. Reflektion offers a mature, next-generation, AI-powered personalization platform that’s built on modern technologies such as Big Data, AI / ML, Click Stream, and Microservices to deliver scale, security and performance. If you haven’t had the chance yet, do check out how Reflektion’s AI Magic is helping online retailers achieve dramatic KPI growth across the board.
Reflektion is committed to empowering online retailers to grow their business and offer more value to their shoppers via BOPIS-enabled capabilities.