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5 Ways “Buy Online Pickup In Store” Increases Omnichannel Retail Profits

  1. • July 2017
  2. Sources: (1) U.S. Department of Commerce, 2017, (2) Pew Research Online Shopping and Ecommerce Survey, 12/19/16, (3) Retail Dive Survey, 2/22/2017 Retail Landscape – Despite double-digit growth, ecommerce represents only 10% of US retail sales Brick-and-Mortar • $4.4 trillion U.S. sales in 2016 1 • 2.9% growth vs. 2015 ($124B) 1 • ≈90% of total U.S. retail sales 1 • 64% of Americans indicate that, all things being equal, they prefer buying from physical stores to buying online 2 E-Commerce • $395 billion U.S. sales in 2016 1 • 15.6% growth vs. 2015 ($53B) 1 • ≈10% of total U.S. retail sales 1 • 79% of Americans make purchases online. 2 • 67% of millennials and 56% of GenX “prefer to search and purchase on e-commerce sites rather than in-store” 3 © Pulse Commerce 2017 - All rights reserved 2
  3. Omnichannel Retail combines the power of online and offline retail to delight customers Omnichannel Retail • Serve customers online, in stores, via contact centers and much more • Deliver amazing, consistent experiences across channels • Omni-channel capabilities include: • Click & Collect (Buy Online, Pickup In Store) • Ship from store • Research online, purchase in store • Research in store, order online • Buy online, return to store 3© Pulse Commerce 2017 - All rights reserved
  4. Customer Benefits - Ship from store improves shipping cost and speed, 2 factors that heavily influence online purchases 4 Source: Big Commerce, “Omni-Channel Retail in 2017: What Brands Need to Know and Modern Consumer Shopping Habits” 80% Shipping Cost and Speed © Pulse Commerce 2017 - All rights reserved
  5. Customer Benefits - Click & Collect improves shipping cost and speed Click & Collect Consumers order products online (click), and collect their merchandise at a local store. Customer Benefits • Cost: $0 shipping cost and price • Speed: Near Immediate gratification • Certainty that item is in stock • Easier returns • Flexible pickup times 5 Ninety percent of Target’s online orders are ready to be put into customers’ hands within two hours. Source:, “Target and the Troubles with Ship from Store,” June 2016 © Pulse Commerce 2017 - All rights reserved
  6. Trends - 86% of customers will choose Click & Collect to save on shipping – one reason why more retailers are offering it Customer Expectations • 86% of consumers would consider buying online and picking up in store to save $10 on a $50 item1 • 57.5% have used click & collect2 • Motivating factors2 • 65% claim shipping cost a key factor • 29% for convenience • 23% for easier returns 6 (1) Blackhawk Engagement Solutions Survey, 2015 (2) Ivend Retail “Great Omnichannel Expectations 2016-2017 Shopper Survey Report (3) Sources: Retail Trends • 95 of the top 500 retailers offered click & collect in 2015 (up from 63 in 2014)3 • Retailers offering click & collect include: Saks Fifth Avenue, Nordstrom, Macy’s, Neiman Marcus, JCPenney, Sears, Kohl’s., Staples, Office Depot, Dick’s, Wal-Mart © Pulse Commerce 2017 - All rights reserved
  7. Retailer Benefits - Click & Collect increases retail sales by 20% or more Significant source of revenue • 30.2% of Sam’s Clubs 2015 online sales • 22.6% of Kmart’s 2015 online sales Higher in-store sales • Typical Macy’s Click & Collect customers spend an additional 25% • More than 20% of Kohl’s Click & Collect customers buy additional items 7© Pulse Commerce 2017 - All rights reserved
  8. “For John Lewis the service has turned out to be a godsend. The company has only about 40 stores, but click and collect allows customers to pick up any items bought from the John Lewis website from its sister company, Waitrose. This adds 300 outlets.” Source: “Click & Collect -- the New Way to Go Shopping,” The Telegraph, 1/8/2013 Retailer Benefits - Click and Collect expands distribution footprint for multi-chain retailers (e.g. John Lewis & Waitrose) Expand Distribution Enable item pickup across stores and even across chains. 8© Pulse Commerce 2017 - All rights reserved
  9. Retailer Challenges - Retailers have not yet perfected Click & Collect execution and customer experience 9© Pulse Commerce 2017 - All rights reserved Execution challenges • Workforce Management “In the store, you’re asking store labor to do more services for the customers than they had to do before” Wayne Usie SVP of retail, JDA – WSJ, “Retailers Struggle Getting Goods to Customers,” Nov 4, 2015 • Inventory Management • Challenges in ensuring ecommerce systems have up to date store inventory. • Challenges in finding ‘in-stock’ items in stores. Outcomes • 57.5% of consumers have taken advantage of click and collect options . . . • But only 31.6% describe in-store collection, processes as “smooth.” Ivend Retail “Great Omnichannel Expectations 2016-2017 Shopper Survey Report”
  10. Retailer Changes – Stores must dedicate physical space to pack up and distribute online orders Physical space and tools • Physical stores are not designed for packing and holding. • Retailers must find room for packing tables, materials, etc. • Software is needed to assign orders, print packing labels, and receipts 10© Pulse Commerce 2017 - All rights reserved
  11. Resolving Challenges – Successful retailers earmark store space and associates to create a seamless pickup experience Stellar In-Store Experience • Dedicated store space • Pickup location • Packing station and structured storage • Store associates trained and “on board” • Customer Focus • Great signage • Orderly Pickup 11© Pulse Commerce 2017 - All rights reserved
  12. Enterprise-wide Inventory & Order Visibility • Gain real-time inventory visibility and control across the entire enterprise • Ecommerce integration • Inventory Management, WMS integration • POS Integration • Streamline fulfillment with order prioritization, packing slips and labels • Deliver real-time, thorough communications Order updates, store hours, pickup times and location • Track Status and KPIs • Product arrival • Issues (customer refusal, damages, missing items) • Returns 12 It takes 12 positive customer experiences to negate the poor impression left behind from one unresolved, bad experience. “The Customer Service Report for Ecommerce,” Nancee Halpin,March 2016. Poor Experience © Pulse Commerce 2017 - All rights reserved Resolving Challenges – An Order & Inventory Platform generates the real-time insight required to succeed
  13. Pulse Commerce Order & Inventory Platform enables a real- time view of orders & inventory required for Click & Collect 13 Pulse Commerce Order and Inventory Platform is the central nervous system of your omnichannel commerce operations, providing unprecedented real-time, enterprise-wide visibility and control of all orders, inventory and customers. © Pulse Commerce 2017 - All rights reserved
  14. Connect with us! Pulse Commerce 855 Main Street, Suite 400 Bridgeport, CT 06604 Tel: (877) 243-3612 Webinars • How to Market and Sell on Pinterest • Building an Effective Digital Loyalty Program in the Amazon Age Pulse Commerce • Learn more about our Order Management Platform Whitepapers • 5 Hidden Costs To Avoid When Buying an Order Management System • Homegrown, On-Premise, or SaaS: Which Order Management System is Right for me? ADDITIONAL FREE RESOURCES

Editor's Notes

  1. For a long time, the concept of brick-and-mortar retail seemed pretty simple: Get people in the store, get product out the door. Now, it’s not so simple. Today, every retailer faces the challenge of serving a customer that’s more informed, connected, and empowered than ever before. Consumers today are increasingly able and willing to shop online and from their mobile devices. Another major challenge for brick-and-mortar retailers is that consumers today are more prone to spend on experiences than material things, such as vacations and fine dining. This is especially true of the millennial demographic, which is quickly growing in spending power while the baby boomers – for a long time, the largest customer segment in retail – go into retirement. So, the most vulnerable target of the e-commerce boom is brick-and-mortar retailers. With fixed costs from labor, fixtures and leases, downward price pressure is problematic. Further, decreased foot traffic makes maintaining (let alone growing) in-store revenue difficult, and it’s nearly impossible for physical stores to compete with the internet’s speed and convenience.
  2. Physical stores are not warehouses. Nonetheless, retailers will need to find room for packing tables, packing materials, and everything else that goes with fulfilling online orders.