BOPIS: What Does It Mean for Shippers?

Buy-online-pickup-in-store, or BOPIS, has turned desktop computers and mobile phones into digital shopping carts.

Linearity is on the way out. So is the shipper’s control of the supply chain. E-commerce has spawned the “omni-channel fulfillment” model where orders, distribution and deliveries occur from anywhere, anyone, and at any time. The traditional supply-push scenario with shippers calling the shots is giving way to a demand-pull approach with consumers in control of the transaction.

The “Buy Online, Pick Up In Store” (BOPIS) concept has become a key part of the asymmetrical, demand-pull world we live and work in. Who ever imagined a consumer ordering an item on an electronic device, having a retailer immediately pick and pack the product at one of multiple locations, and having it ready for the consumer’s arrival at a pre-arranged time, typically within a few hours and sometimes under an hour? 

Experience Depends on BOPIS Excellence

The COVID-19 pandemic is driving BOPIS toward mainstream adoption. Contactless interactions remain the order of the day – especially during the holiday season as health-conscious consumers continue to minimize time spent shopping in confined spaces. But BOPIS and other alternate fulfillment practices will outlast the pandemic. They will become permanent additions to the logistics landscape.

To execute an effective BOPIS strategy, shippers must understand retailers’ two overarching objectives: 

  • Ensure a seamless customer experience regardless of the order touchpoint.
  • Maintain adequate in-store inventory while expanding digital buying opportunities.

It is essential for retailers to have the right goods always available, and at the right place at the right time for the consumer. The “right time” could involve shipping to a residence or to another physical location. It could mean an in-person brick-and-mortar sale. It could mean BOPIS, or its first cousin, “Buy Online Pick Up at Curbside” (BOPAC). It could be a drop-shipping model where the shipper delivers directly to the store, thus minimizing the need to hold inventory in a space-constrained facility.

Striking the correct balance between in-store and digital inventory is just as critical. In-store customers are typically more loyal and buy more per visit than online customers. Retailers are loath to broaden their digital channels if doing so threatens to siphon off in-store activity.

Allowing both scenarios to thrive requires elevating visibility and analytics tools to new heights. A clear line of sight across the ecosystem allows shippers to align production with the retailer’s current replenishment needs. Analytics like Machine Learning and Artificial Intelligence also provide shippers with vital clues about consumers’ future buying habits so they and their retailer partners can stay a step ahead.

Technology is only as productive as the knowledge of the people managing it. Seasoned third-party logistics specialists understand how to design and implement a consistently successful BOPIS program that leverages cost-effective automation. They have worked extensively with all stakeholders, and can quickly adjust the go-to-market processes to optimize outcomes and avoid costly missteps.

Final Delivery Drives Loyalty or Brand Damage

If your customer's purchase isn't ready for the promised, rapid in-store fulfillment, your BOPIS strategy could have a negative result.

Online fulfillment is a fast-paced, often-unforgiving business. You are only as good as your last delivery. The margin for error narrows still further in a BOPIS transaction. Failing to execute an order after the consumer was assured the product was in stock and went out of their way to retrieve it is a breach of the “trust covenant” between the stakeholders. A BOPIS-related stock-out can seriously damage both brands, especially if a negative review spreads on social media.

The good news for shippers is that mastering this intense pivot point should result in enduring brand loyalty from consumer and retailer alike. Consumers prize convenience, and will favor retailers who make the BOPIS experience as easy as “pulling up and popping the trunk.” This goodwill extends to the products they pick up and take home.

Retailers, meanwhile, know how complicated it is to make life easy for today’s consumer.  Shippers who consistently execute will become sticky to the retailer. Product quality is obviously important. However, consumers often cannot discern between the nuances of multiple products of similar craftsmanship. What they do know, and will remember, is how, when and where they received their product. Or why they didn’t. That is how your brand will be remembered. In today’s world, logistics, more than any part of a shipper’s business, is becoming the competitive differentiator.

Navigate the New “Never Normal”

Planned properly, the BOPIS fulfillment model is a valuable tool in the highly competitive e-commerce space. 

The devil is in the execution.

Transportation Insight specializes in designing and executing supply chain strategy adjustments that empower you to provide the final mile delivery options required to wow end customers.

We created “The BOPIS Revolution: Navigating the New Never Normal” to offer insight into the many variables involved in meeting consumers’ evolving demands for service. Read it today to understand the strategies that we can help you leverage to enhance customer service, grow market share and increase competitive advantage.

Drop Shipping: The Path to E-Commerce Growth for CPG Companies

We can thank brick-and-mortar retailers for some of this. Many now require consumer products manufacturers to support e-commerce initiatives by drop shipping online orders to consumers. 

This drop shipping requirement can seem daunting to operations that aren’t set up for direct-to-consumer fulfillment, especially when it needs to begin quickly. Even so, as the face of consumer retailing evolves, this forced entry into e-commerce fulfillment has its advantages:

  • Retailers save money because they aren’t warehousing the merchandise and managing fulfillment.
  • The manufacturer’s carbon footprint is reduced because drop shipping eliminates transportation of goods from the manufacturer to the retailer’s warehouse for order fulfillment.
  • Shoppers often receive their orders more quickly.
  • The brand can explore e-commerce growth potential on a smaller scale.

Manufacturers responding quickly to retailer drop shipping needs often get outside help, at least initially. This strategy offers significant benefits: 

  • It minimizes disruption in the warehouse while allowing companies to respond quickly. 
  • When contracting with experienced professionals, logistics managers learn best practices before bringing the process in-house.
  • Manufacturers can test e-commerce feasibility without making the often-significant changes required internally. 

E-Commerce Expansion Comes in Many Forms

Drop shipping often leads manufacturers to accept that in order to keep growing, they need a direct-to-consumer sales channel of their own to protect market share and remain relevant.

Their e-commerce expansion can take many forms that include:

  • A musical instruments manufacturer that provides extensive product information on its e-commerce site, but encourages shoppers to buy the product from a local brick-and-mortar retailer so they have it immediately.
  • An athleticwear brand that uses its online platform to add value through an upsell to product customization and personalization that isn’t offered in brick and mortar stores.
  • The jeans maker that intensified branded e-commerce site marketing and enhanced delivery options after watching in-store sales decline.

Some ease into e-commerce by selling through Amazon. The mega e-tailer’s Fulfillment by Amazon program lets manufacturers avoid establishing their own e-commerce system by shipping merchandise sold on Amazon to one of that company’s warehouses. Amazon handles all order processing and fulfillment. 

This end-to-end out-sourcing simplifies things for the manufacturer, but has a significant disadvantage. In this model, Amazon, not the brand, sets the product price. Consider the potential impact of price-cutting on the brand’s image when reviewing this option. 

Others sell on Amazon, but control pricing and order fulfillment by becoming Amazon Prime-certified through the Seller Fulfilled Prime option. Yet another option that lets brands avoid establishing their own e-commerce platform involves selling on Amazon, but partnering with a Prime-certified third-party logistics provider for fulfillment. 

Options such as these give manufacturers time to gather and analyze data. This helps determine which products to sell from a brand site, how many they can expect to sell, and where to set up fulfillment to meet consumer demands for speedy delivery.  

Can You Go It Alone?

Companies that go to the next level and launch a branded e-commerce platform often partner with experienced enterprise logistics providers on the fulfillment side. This significantly reduces the learning curve as they staff up. It also lets them identify existing fulfillment processes that are ripe for improvement.

That was the case when a national brand expanded from brick-and-mortar locations to online sales. When it encountered problems with shipping trends analysis, invoice audits, and payment protocols, its leadership knew that reducing transportation costs and creating a more efficient supply chain had to become a top priority.

The company turned to our experts at Transportation Insight for help. By providing services that included optimizing the company’s logistics operation, providing auditing services, and creating greater shipping data visibility, we helped the brand save an average of $9 million-plus annually

In addition to partnering with outside resources, manufacturers that pursue direct-to-consumer sales do two other things that make a difference. 

  1. They add leaders with relevant expertise to the staff.
  2. They include representatives from all affected areas, from finance to product development to logistics, in all planning.

Adding e-commerce to an established operation requires organization-wide collaboration plus insights, guidance, and advice from experts who are steeped in this growing segment. To help you improve your ability to serve online customers, download our resource guideStart the Cart: A Manufacturer’s Guide to Achieving E-Commerce Fulfillment Excellence. You’ll discover insights into how e-commerce logistics challenges and solutions are affecting CPG companies.

What’s your biggest e-commerce fulfillment challenge today? Tell us in a comment.