We are well past the point where omnichannel is something retailers just talk about.
Sky-high expectations from time-pressed and digitally enabled consumers have accelerated retail’s move into a buy-anywhere, anytime on-any-device posture that is changing commerce for good.
Consider the recent holiday shopping period, a stretch of consumerism that often acts as a sentinel of trends to come. Adobe noted that buy-online-pickup-in-store orders increased by 39% over 2018. That’s on top of a 2018 holiday season that saw BOPIS increase 50% year-over-year during the Thanksgiving through Cyber Monday weekend.
Retail stalwarts such as Walmart, Target, Nordstrom and others have pointed to in-store pickup as a significant bright spot for their businesses. Walmart’s ecommerce business grew 41% during the third quarter of 2019, driven significantly by its buy-online-pick-up-at-curb grocery service.
Target says that same-day fulfillment channels, which include BOPIS, lower order costs by 90% and that 80% of its third-quarter growth was attributable to its same-day options, including BOPIS.
Jamie Nordstrom, Nordstrom president of stores, told Bloomberg that BOPIS was the single fastest-growing partof the retailer’s business. “Believe it or not,” he added, “buy-online-pick-up-in-store is also our most profitable way to sell something.”
Not only does BOPIS reduce fulfillment costs, by eliminating the cost of moving a package the “last mile,” it also brings traffic to the store. That traffic consists of consumers who often buy items in addition to the items they came to pick up.
It’s no wonder then that in a survey of 250 executives at enterprise retailers that offer BOPIS Signifyd found that 37.6% did so to attract shoppers who make additional purchases. The only larger response was from the 44% who said the main reason they offered BOPIS was to keep up with the competition — with 12.4% specifically mentioning Amazon.
When you think about it, BOPIS is a rock-star sales channel. Creating a system that lets customers order on their phones, tablets or desktops and pick up their orders in a store:
- Improves the customer experience by allowing consumers to shop the way they want to at any particular time.
- Increases foot traffic and sales in the store.
- Eliminates the costs and logistical complications of getting the order to the customer’s front door.
- Reduces the impact of returns by allowing a customer to see and touch a product before leaving the store.
- Avoids the possibility of porch piracy and/or an item not received (INR) claim because the package is not left unattended at a residence.
So, BOPIS is a no-brainer, right? Well, not exactly. Launching a successful BOPIS program requires training associates and possibly reassigning them. Providing in-store pickup of online orders requires speed and agility.
Customers like how they can order online and then pick up their purchases in a store an hour or two later. Providing that experience means retailers need to have accurate and failsafe inventory insight to know that the promised product is actually in the store.
Associates need to be able to quickly locate the goods ordered online and organize them in a way that makes for easy pickup. Managers need to create a dedicated area for package pickup and devise a system that ensures the right package ends up in the right customer’s hands.
BOPIS also complicates risk management. First, the speed with which orders need to be prepared means that there is little time to conduct manual fraud reviews of suspicious orders. Secondly, because the customer is picking up the order, the retailer does not have a delivery address to refer to. That means the retailer’s fraud team can’t compare the billing and delivery address, nor can it use a delivery address to access a host of other important identity signals available through third-party data providers.
More than 40% of respondents in Signifyd’s survey, which was conducted by market researcher Survata, said buy-online-pick-up-in-store increased their fraud concerns. More than one-quarter put their BOPIS fraud losses at 3% to 10% of revenue.
Anytime there is a new way of buying something, fraudsters find new ways to exploit the system. When it comes to BOPIS, the fraud play is hardly exotic. A fraudster or fraud ring, using stolen identities, makes an online purchase. Or the ring makes a purchase from a legitimate online account that they have infiltrated.
The criminal rings take advantage of the relative lack of data available in a BOPIS order and the speed with which the order needs to be fulfilled to capitalize on in-store pickup. They take advantage of store policies that allow a friend or associate pick up an order on behalf of the original customer.
The rings also turn to mules, people who for a fee agree to pick up the orders and ship them to an address where the fraud ring takes delivery. The same mule might have something of a pickup route, visiting several stores in the same vicinity, picking up multiple orders. Multiply that by many mules and you can imagine the kind of scale the illegal operations can achieve.
“It’s a job,” Stephen O’Keefe, a retail consultant who worked as Walmart Canada’s president of loss prevention, told Signifyd when its survey was published. “They work hard at it.”
So, what to do? Fortunately, there are steps retailers can take to enjoy the upside of BOPIS without enduring the potential disadvantages.
- Consider a guaranteed fraud protection model:Guaranteed models, such as Signifyd’s, rely on big data, artificial intelligence and human expertise to sift legitimate orders from fraudulent ones in less than a second. The system relies on signals from millions of transactions across thousands of retailers around the world. Chances are a new customer arriving at a retailer’s site has already made a purchase at a merchant on Signifyd’s Commerce Protection Platform. Past experience provides a strong indicator of whether or not the customer is legitimate. Signifyd’s model avoids customer experience disasters by seeing to it that legitimate customers’ orders are approved, while fraudulent orders are declined. The guarantee model also comes with the assurance that should an approved order turn out to be fraudulent, the retailer will be made financially whole. That confidence means orders will be ready for pick up when customers want them.
- Train your associates:It seems obvious, but your associates are now fulfillment experts along with their other responsibilities. Help them understand how to juggle traditional shoppers and BOPIS customers or consider creating a dedicated BOPIS team. Make sure employees understand the procedures for in-store pickups and follow them. What forms of identification are required? Are people other than the original customer allowed to pick up the order? Have your associates’ backs when conflicts arise in situations when the shopper picking up an order doesn’t meet the requirements you’ve put in place.
- Communicate, communicate, communicate: Send your customers immediate confirmation of an online order. Clearly explain how BOPIS works: When will the order be ready? What identification is required for pickup? Where in the store should the customer go? Can a friend pick up the order? If delays arise, immediately send an email or a text explaining the problem and describing what happens next. Outline the customer’s options. Consider offering a future discount or free shipping on a future order to make up for the inconvenience.
BOPIS is no longer a nice-to-have, either for retailers or in the eyes of consumers. Doing it right requires forethought, focus and finesse. But if recent years have demonstrated anything, it’s that the work required to properly execute on BOPIS is well worth the effort.
Company Bio: Signifyd empowers fearless commerce by providing an end-to-end commerce protection platform. Powered by the Signifyd Commerce Network, its advanced machine learning engine is able to protect merchants from fraud, consumer abuse and revenue loss caused by barriers and friction in the buying experience.
Signifyd leverages big data, machine learning and expert manual review to provide a 100 percent financial guarantee against fraud on approved orders that turn out to be fraudulent. This effectively shifts the liability for fraud away from ecommerce merchants, allowing them to increase sales and open new markets while reducing risk.
Signifyd counts among its customers a number of companies on the Fortune 1000 and Internet Retailer Top 500 lists. Signifyd is headquartered in San Jose, CA., with locations in Denver, New York, Belfast, and London.
Website URL: https://www.signifyd.com/?pid=001o000000qGcPLAA0
For more information on Signifyd and BORN, please reach out to Mackenzie Johnson, Marketing & Partnerships, [email protected]