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In The Midst Of Pandemic, Do ‘The Profitability Twins’ Emerge?

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Later this week, we’ll be launching a full benchmark report on a topic we’ve never researched before. For the first time, we surveyed retailers on a specific pair of cross-channel shopping behaviors: Buy-on-line-and-pick-up-in-stores (BOPIS, also known as click-and-collect) and buy-on-line-return-in-stores (BORIS). While the survey was performed prior to the COVID-19 pandemic’s impact outside of China, we believe it is even more relevant today.

The crisis has only accelerated the adoption of these behaviors, and more than likely, those behaviors are here to stay. We can see from the data that BOPIS had already risen in importance prior to the crisis (the behavior had grown from 4% of eCommerce sales in 2017 to 11% by 2019). We believe it will only increase in the future. BORIS and BOPIS may just be “the profitability twins” after all.

Here are some of our key findings:

  • While retailers still obsess over competition from Amazon and its marketplace, and the company’s activities are the most frequently cited Business Challenge there is a sense that stores can be used as a key differentiator, particularly through BOPIS and BORIS. Of course, the rise in BOPIS and BORIS create operational challenges for retailers, including labor, enabling technology and process management.
  • Retailers clearly believe that BORIS and BOPIS represent significant Opportunities For them – both in incremental sales and incremental traffic. Retailers selling Fast Moving Consumer Goods (FMCG) in particular see an increase in overall revenue through supporting consumer wants in this way. It is also a winning behavior for retailers overall.
  • Processes lag, and the labor required to support what’s in place today are significant Organizational Inhibitors to BOPIS and BORIS adoption. Retail respondents believe the best way to overcome these challenges is to make them more efficient by automating as much of these processes as possible. Non-winners look for a mandate from above, while winners simply “get” the need.
  • Any Technology Enabler that supports inventory visibility in near-real-time is critical for the success of BOPIS and BORIS, and retailers know it. Retail Winners say they have moved ahead in adoption of visibility-oriented technologies, but likely they still also have a way to go.Non-Winners are clearly behind in this adoption curve, and are now in the dicey situation of having to basically put the wheels on the BOPIS/BORIS bus while it’s racing down the highway.

As always, we always conclude this report with some baseline suggestions about moving forward. Retailers have to move. They can’t wait. An emerging trend has accelerated to the point where it’s going to be table stakes for some time to come.

We enjoyed writing this report, and certainly hope you find it useful. We’ll be certain to let you know the moment it is published.

 

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Articles & Opinions April 21, 2020
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