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The word “convenience” is fast becoming an important part of the customer experience and something that our industry can leverage to better compete with large, big box retailers. Independent retailers have the industry expertise, dedication to customer service, and community involvement that gives an edge on national competition. By making it even more convenient to do business with independent retailers, we can improve loyalty for generations to come.
Convenience is becoming the key
According to a 2018 Nielsen Study, The Quest for Convenience, in today’s hyperconnected world, convenience is the ultimate currency. The study focuses on six key drivers that are influencing the need for convenience solutions and key to our industry are generational needs and the uptake in technology.
The study suggests that convenience “transcends products, services and store channels. Packaging, preparation, storage, portability, disposal, ordering, replenishment and fulfilment, as well as device, payment and application technologies are all key considerations in providing an overall convenience experience.”
If independent LBM and hardlines retailers are already providing superior products and customer service, the question becomes whether we can also add a level of convenience that surpasses that of the competition. If so, we can recognize that convenience is the key to unlocking our industry’s potential for significant sales growth, customer satisfaction, and loyalty.
The future of convenience—omnichannel retailing
According to Square, omnichannel retailing is an integrated approach to selling that enables customers to browse, shop, and purchase through a variety of channels, like brick-and mortar store, social media, website and mobile.
The lines have blurred between B2B and B2C with today’s consumers and new business owners are playing by a totally different set of expectations than their predecessors. Today’s up-and-coming consumers are much more tech-savvy with e-commerce, speedy delivery, and instant gratification as the norm. They are used to doing research on the web, and customer experience is important to their continued loyalty.
Your ability to expedite product fulfillment and exchange through omnichannels will provide a new level of convenience, increase cross-sell opportunities, and drive customer loyalty for increased profits.
BOPIS—what is it and why should you care?
Important to this broader new fulfillment strategy is Buy Online Pickup In Store (BOPIS). Otherwise known as “click and collect,” BOPIS has been growing in popularity over the past five years and is quickly making its way into lumberyard and hardline retail locations.
A 2019 report from Business Insider predicts that BOPIS is expected to hit 90% retailer adoption by 2024.
Today, the true omnichannel experience means that you can order something online and choose whether you want it delivered today or tomorrow or to pick it up at the curb or in the store. And, if you want to return your purchase, simply swing by the retailer and drop it off. The more convenient you make it, the happier the consumer.
And, your customers are being wooed every day by more and more large companies offering BOPIS in addition to lower shipping fees. As an example, according to Home Depot’s most recent Annual Report, more than 50% of $10 billion in online orders were picked up in store. This past July, Amazon introduced its own BOPIS options with lockers installed at many partnering retail locations.
According to the Business Insider report, BOPIS growth will be driven by the services’ ability to reduce shipping costs and inspire impulse purchases from customers who are picking up or returning items in- store. Customer adoption will also grow, as those who use BOPIS can avoid shipping fees, have their orders fulfilled more quickly, and physically see their items before taking them home.
BOPIS fuels additional purchases in store
Impulse purchases are a great side-effect of pick-up-in-store as the additional revenue occurs when customers physically come into your store. A 2018 Risk & Reward Report by Signifyd reveals that 37.6% of respondents say the biggest boost from BOPIS is the additional purchases consumers make when they arrive to pick up their orders.
Closely mirroring those results, a recent JDA Consumer Survey, Cure for the Store, shows that nearly half of their survey respondents who use BOPIS say that they make additional purchases in-store when picking up their online purchases.
Compete and win with BOPIS
The LBM and hardware retailing industries are growing as we’re seeing significant enhancements being made to homes throughout North America. Did you know that 80% of the nation’s 137 million homes are now at least 20 years old and 40% of homes are at least 50 years old?
The next-generation home buyers are quickly becoming the “renovation nation.” According to HomeAdvisor’s 2018 True Cost Survey, millennials are twice as likely as baby boomers to complete bathroom and kitchen remodeling projects.
In the study interview, Brad Hunter, HomeAdvisor’s chief economist, says that, “Most millennials have had to compromise on the size and condition of their starter homes—with many purchasing older homes in need of repair just to be able to afford homeownership. Many of the millennials who did buy a home in the last few years are seeking to upgrade. But a lack of housing inventory, coupled with inflated home prices and rising mortgage rates, has them renovating their existing homes instead of selling and moving.”
Coupled with BOPIS, small-to medium-sized retailers can really take advantage of opportunities in the market and trends like the millennial push to home ownership to find and retain customers for the long haul.
Fulfillment challenges are possible
The logistics of offering BOPIS can cause major headaches if you’re not prepared. To ensure success, you must have an accurate accounting of all sales information, credit card details, and inventory quantities so that when a customer picks up their purchase, everything is ready and the experience runs smoothly.
According to Signifyd, 45.6% of retailers surveyed say that logistics and inventory tracking presents the biggest challenge to managing BOPIS. They suggest that retailers should combine their online and in- store order and inventory management systems.
Be sure to think through the entire BOPIS plan from having the technology that allows you to analyze all purchases, to develop processes that ensure the accuracy of credit cards and to whom employees are giving purchases at pickup. The good news is that when Signifyd asked what percentage of a store’s BOPIS sales revenue turned out to be fraudulent orders, 43% of retailers reported 0-1%. Of course, as in any retail environment, scammers do exist, so it’s essential that associates remain vigilant and follow processes to protect the business.
According to PwC, even if people love your company or product, in the U.S. 59% will walk away after several bad experiences, 17% after just one bad experience.
With the right systems in place to monitor purchases, inventory, and business data, you’ll be set up for the future of retail. Remember, convenience is what is going to keep your customer coming back and BOPIS is the next-generation tool to ensure a great customer experience.
Interested in learning more about BOPIS for LBM Businesses? Watch this free online webinar for tips to get started: https://www2.ecisolutions.com/bopis
About ECI Spruce
ECI business management software, designed for the LBM industry, provides real-time visibility into every area of your lumber and building materials operations. Our solutions give you smarter data so you can make informed business decisions, provide a seamless experience for your customers, and compete at a higher level. Learn more at www.ecisolutions.com/spruce.