Meet Your Customers Where They Are
When I sat down to write this blog, I planned to talk about the growing importance of “buy online pick-up in store” (BOPIS) and “buy online return in store” (BORIS) to today’s omnichannel retailers. These customer service tactics are increasingly popular with consumers who like the convenience of accepting deliveries or returning online purchases in person instead of waiting for delivery by mail.
But the more I thought about it, the more I realized that in-store fulfillment is just one facet of a much more significant retail transformation: by shifting from conventional channels to local fulfillment centers, large e-tailers and big department stores are becoming hyper-focused on neighborhood needs. The ability to meet customers where they are is an increasingly important competitive advantage for even the most successful brands.
Convenience is a Winning Strategy
One thing’s clear in today’s sometimes murky retail environment — the online-only or brick-and-mortar-only value chain is no longer enough. According to Invesp, 67% of shoppers in the U.S. have used BOPIS in the past six months, and 50% of consumers have decided where to shop online based on whether they could pick up their order in a store.
Native brick-and-mortar stores like Home Depot and Walmart are improving their e-commerce channels by allowing customers to shop their online sites, then pick up or return goods in their stores.
Amazon, on the other hand, just launched an expanded in-store pick-up concept it calls “Counter,” a partnership that lets customers pick up an Amazon order at their local Rite Aid drug store. It’s also experimenting with BORIS in Kohl’s department stores. In effect, the world’s biggest online market is using strategic partnerships to simulate all the convenience of local shopping within a physical location in the neighborhoods where its customers live and work.
Why are they experimenting with seamless cross-channel distribution strategies? Because customers like to purchase and return goods when and where they want.
When Distribution is Also Marketing
Nordstrom’s innovative neighborhood service hub is one of our favorite examples of new local distribution strategies for diverse urban markets. It takes the brand’s much-admired reputation for exceptional customer service to a new level in a smaller, neighborhood-sized retail footprint.
Nordstrom Local combines value-added services such as in-store pick-up, alterations and tailoring, personal styling, and customer events in a more convenient, more intimate version of a department store.
Each location is customized to reflect the unique needs and personalities of city residents. Shea Jensen, senior vice president of customer experience, said: “We first introduced Nordstrom Local to customers in Los Angeles with the goal of better serving them on their own terms. We know this strategy is driving outsized market share gains in LA and increased convenience for customers.”
The neighborhood stores are also growing sales and attracting new customers. Shoppers tend to be younger and shop more frequently, and 30% of all customer next-day pick-ups in Los Angeles are happening at Nordstrom Local locations.
Home Depot figured out that the combination of BOPIS and BORIS is not just a distribution strategy: it’s a marketing strategy that can grow your customer base. The company grew online sales by 23% year-over-year by using its digital platform to expand into new product categories such as pool maintenance, workwear, and home furnishings. It’s also targeting new market segments and expects to have more than a million new Pro Customer accounts using a customized “pro” website by the end of 2019. Contractors, professional renovators, and property managers can find materials and supplies they need and source delivery options to meet their unique requirements.
In a recent earnings call, Home Depot CEO Craig Menear cited how the company continued to make progress, pointing to efforts to enhance the interconnected customer experience by investing in stores, improving the front-end checkout experience, continuing to roll out automated lockers, streamlining the customer service desk and simplifying tools for Home Depot associates. As a result, the company's satisfaction scores for customer service checkout time improved by 5 percentage points and 54% of online orders are picked up in stores.
Analysts say these changes put the home-improvement retail giant “on the correct side of several trends (by making) the right investments to stay on top of potential e-commerce competitive threats, as well as its primary rival, Lowe’s Companies.”
Worth the Effort
It’s not easy to establish a neighborhood retail presence, especially if you don’t have experience building and managing properties in large cities. But making it easier for customers to do business with you is always worth the effort. Cura Resource Group offers time-saving, cost-effective ways to enhance your retail business by expanding to physical locations without the traditional investment in real estate and location development.