Online Shopping Is Actually Boosting In-Store Sales Thanks to BOPS

In Customer Engagement, Delivery, Featured on App, Loyalty & CRM by Vaughn HighfieldLeave a Comment

BOPS, Buy Online, Pay In Store, Shutl, Quartz, Antonio Moreno

That sounds absurd doesn't it? I don't blame you for wondering if I've taken a blow to the head or ingested some form of narcotics while reading a report, but it's true.  That's according to Antonio Moreno, the professor of managerial economics and decision sciences at the Kellogg School of Management, who has been investigating the impact of Buy Online Pick Up in Store (BOPS for short) options that gives customers the best of both worlds: ease of purchase, and amazingly fast procurement times that suit them best.

The "BOPS Effect", as Quartz so neatly put it, seems to show that this initiative is actually decreasing online purchases and increasing store purchases – beyond the expectation. It's not an incredibly hard trait to imagine though as my colleague Julia so eloquently put it in her article ‘Is Mobile Marketing the Key to Increased Brick-and-Mortar Sales?' which seems to be mirroring the trend of increased in-store sales through simple omni-channel implementation.

Having examined full year's worth from a major US and Canadian retailer – including transaction, total sales and number of shoppers – making sure to account for stores that didn't offer BPOS and those customers who lived too far to make the most of BPOS, Moreno and his colleague Santiago Gallino compared the online purchasing behaviour of those who could use BPOS to those who couldn't.

What they found was that online sales were actually decreasing in areas located close to a store that offered BOPS. To make matters even more puzzling for the team, online traffic to the retailer's website was actually on the rise. Comparing this to the data from brick-and-mortar stores, the data showed increases in visitors and sales in American stores – something that the Canadian stores, which don't offer BOPS, didn't have.

Surely this is the complete opposite of what you'd expect from the implementation of BOPS? So, what in heck's name was going on?

Well, according to Moreno it seems that customers are making use of BOPS not to order goods, but as a means of gaining information on a product or store. It is, after all, a reliable way to check what's in stock at your local store before you make a needless trip out to discover your desired purchase is out of stock. It also means that, if the item is in stock in store, a customer can head on down and take a look at it before buying – something that can't be done online.

This was also reflected in higher amounts of online cart abandonment in areas that were close enough to make use of BOPS services.

"The most surprising thing to me was that online sales went down when the customers were given more options," stated Moreno. "If you're a customer and were planning to buy online, now you have even more reasons to [do so], because now you could buy online and pick up in the store.

"We thought it would make the online channel more attractive, but what happened was that it led to this shift towards brick-and-mortar stores, which is a good thing for the company."

It's not all doom and gloom on the BOPS front though, as the increase of in-store sales actually outweighed the loss of online ones – suggesting that just by being in store customers ended up buying more than what they were abandoning in a cart.

As Moreno points out, it does highlight how companies may need to rethink how they approach the online store – essentially not treating it as a separate entity but making it a facilitator for it's brick-and-mortar stores.

Indeed, I've noticed this in previous jobs I've held. One company I worked for were hit by hard times on the store-sales front. They implemented click and collect services and – while actual click and collect numbers were low due to the stores location – in-store sales rose. They then decided to abandon the model of having a separate online store and instead shared the site's sales amongst the brick-and-mortar stores who had sales online sales delivered within their catchment area.

After all, their presence on the high-street was part of the reason why a purchase was made online – either because they guided a potential customer through their purchase (which was then made at home comfortably), or the sight of it on the street was enough of a memory-jog for them to check it out online. It also managed to keep the stores in business as they're the real cost for retailers.

Could this method have helped your retail offering, and do Moreno's findings about BOPS surprise you?

It all seems to make sense when you put it into perspective.

 

Next year at Home Delivery Wold UK 2014 there will be a whole host of delivery and logistics companies to help you sort and organise the best way to please your customer's shipping demands.

It's also worth taking a look at our interview with Shutl CEO Tom Allason as he explains how their one-hour delivery service has taken off so fast.

[Image: Helen_Smith – Flickr]

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