Nailing Omnichannel in the Pandemic Age: BOSS and BOPIS

For years, retail visionaries have been calling for legacy retailers to prioritize digital transformation and technical disruption in their business, and ignore at their own peril. Given that the industry is in constant flux, and instituting a truly unified omnichannel experience comes with a slew of complexities, it’s no surprise that some retailers have lagged behind. With the COVID-19 crisis, retailers have found themselves in another state of upheaval—one that demands those who are lagging to catch up or risk losing their business.

Customers have dramatically shifted their shopping experience to digital channels, and their expectations for service options have not waned during the pandemic. With inventory scattered across stores, retailers must implement omnichannel capabilities like BOSS and BOPIS to meet the changing needs of customers’ new normal.

Best Practices for BOSS and BOPIS

Ultimately, omnichannel retailing is about meeting customer demands anywhere (through multiple touchpoints) and in they way they want. We have outlined some best practices for BOSS and BOPIS below:

BOSS: Buy Online Ship from Store

• High levels of inventory accuracy, and/or well refined safety stock calculations. We recommend our retailers only promise shipments that have a 95% likelihood of being filled. Many retailers learn quickly that too many cancelled orders due to inventory inaccuracy results in lost customers and decreased brand value.
• Ability to utilize business rules to send orders to stores to optimize desired results, for example, ship complete orders from one location, ship from store closest to customer, or ship from stores with highest level of overstock or item in markdown mode. This typically requires a modern Distributed Order Management (DOM) solution.
• Mobile technology to assist store “pickers” in finding, confirming, and matching items for shipping.
• Integrated shipping stations in the back room of brick-and-mortar stores to complete and ship orders to customers, complete with all the packing materials and invoicing capabilities as one would receive from the distribution center. Associates should be able to pick, pack, and ship in 5 minutes or less.
• Ability to assign an order to a secondary, tertiary, or pool of stores if the first store cannot fulfill the order.

BOPIS: Buy Online Pickup In-Store

• With BOPIS, retailers need even higher levels of inventory accuracy since a customer is about to come to the store to pick up the order. According to IHL, 24% of orders are not ready for pickup when a customer shows up at the store after receiving an order-ready confirmation.
• A confirmation step, to ensure you have the item in hand before the customer heads for the store. Triggered email and text communications are required to communicate to the customer, and the initial pick must be completed, confirmed, or cancelled within a couple hours.
• Alternatively, many retailers can ship from the DC to the store for customer pickup. This allows customers to see and try on merchandise before completing the sale and typically avoids shipping charges. It is critical to communicate to customers about when they can expect to pick up items.
• For Curbside BOPIS, additional capabilities are required, including mobile technology to complete the sale outside the store, and messaging communications for customers to alert store personnel that they have arrived.

What Are the Opportunities?

By following the steps above, you can improve customer satisfaction through higher fill rates than if you shipped from the warehouse alone. During COVID-19, some of our clients fulfilled up to 40% of their orders from stores that were otherwise closed, due to limited access to DC inventory due to COVID restrictions, but by implementing BOSS and BOPIS,

• “Add on” sales are typical when an online customer comes into the store to pick up items. Additionally, some customers will learn to shop in stores who may not have otherwise.
• Saved sales. Mathematically, you will always sell more by sharing inventory across channels.

Additional Considerations

Before implementing your BOSS or BOPIS initiatives, it is important to take a few things into consideration.

Picking and shipping in the store is typically twice the cost of doing so from a centralized DC, because stores are organized for shopping, not batch picking processes, and product is generally more spread out than a DC with pick bins. Retailers should expect higher shipping rates when implementing BOSS unless negotiated within an enterprise logistics contract.

For both BOPIS and BOSS, high retailer cancel rates can cause serious customer defections. To prevent this, we recommend retailers are conservative with how low they sell store inventory to ensure they can fulfill the orders at a 95+% rate. Additionally, you must be very astute and resilient in managing the channel conflict that arises when selling items from a retail store to online customers. While we always advocate “saving a sale” and servicing the customer, the store assortment needs to be maintained at a level where customer still find it appealing to shop there.

Conclusion

Before the pandemic, BOSS and BOPIS were well on their way to having a growth spurt in 2020, and the pandemic accelerated the rate of change. We don’t know what new customer behavior will stick around once pandemic lockdowns are lifted, but it’s clear that BOSS and BOPIS are here to stay. Newmine has assisted several omnichannel retailers in implementing BOSS and BOPIS as retailers continue to become more and more unified in their commerce capabilities—some initiatives completed in as little as 2 weeks.

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