Retailers missing the mark with BOPIS, shipping
Inconsistencies in operational processes are killing the customer experience.
This was according to a new study by strategic retail advisory firm HRC Retail Advisory (HRC), which revealed that 100% of companies offering omnichannel services are experiencing operational challenges. Specifically, retailers are experiencing execution issues that have caused customer frustration and increased cost to the retailers.
Buy online, pick up in-store (BOPIS) is a major source of retailers’ headaches. Companies describe the initiative as consistently unreliable, as systems often tell shoppers that an item is available in a specific store, yet the store does not actually have it in stock. In fact, 66% of retailers blame BOPIS inconsistencies on inventory inaccuracies.
There are also inefficiencies when it comes to shipping online orders. For example, 77% of retailers ship primarily from e-commerce fulfillment centers instead of from local stores that may be closer to customers’ homes or offices — a move that would enable customers to receive their orders quicker.
The biggest challenge overall is identifying which is the most cost-effective location to ship e-commerce orders from, and how to allocate merchandise to stores based on consumer demand. Currently, 70% of retailers are not optimizing their customer order systems to prioritize filling the entire order from one location, causing split shipments and increasing freight costs.
A lack of analytics are also impacting omnichannel experiences. Only 14% of retailers surveyed use predictive analytics, and most of these retailers are struggling to figure out how to integrate such analytics into operational processes, according to the study.
“Brick-and-mortar retailers have overextended themselves as they’ve tried to leverage their physical store fleets,” said Antony Karabus, CEO of HRC Retail Advisory.
“E-commerce and omnichannel fulfillment and related returns have led to sharply rising freight costs and product margin challenges,” Karabus continued. “Meanwhile, consumers expect ever-faster delivery, pressuring retailers to meet those expectations in order to remain competitive. Very few retailers have formal scorecards to measure the performance and profitability of their omni-channel efforts, which often means they can’t effectively and efficiently take the corrective action needed to improve customer service and profitability.”
Retailers Nationwide were late coming to the party to utilize all their store assets and to be able to compete with shipping accuracy and efficiency like Amazon. If analytics can be perfected to the point a particular item can be realized by the consumer immediately for pick up or 24 hr. delivery at the cheapest most effective cost passed through to the consumer I think physical stores can beat Amazon at their game. Michael Sapir, CEO, Sapir Real Estate Development