With Walmart and Amazon both offering next-day delivery, buy online/pick up in-store (BOPIS) options are becoming critical for retailers trying to compete. These services are particularly important for retailers that specialize in CPG goods —two-thirds of regular e-Commerce customers already purchase these goods online, and the added convenience of in-store pickup could help brick-and-mortar retailers capture a larger market share, according to Nielsen data powered by Rakuten Intelligence.
The popularity of BOPIS is on the rise, growing from from 4% of all e-Commerce orders in 2017 to 11% in 2019 and continuing to expand, according to estimates by Nielsen. Along with this increase, statistics point to an expanding market for digital sales of CPG products:
- Online CPG sales have increased by more than 30% year-over-year;
- 60% of shoppers have browsed and ordered for CPG items online;
- 28% of shoppers have purchased CPG products online several times per month.
“In just the past two years, 29 million new people purchased CPG products online, so there's a lot of energy around in the space right now,” said Justin Belgiano, VP, U.S. E-Commerce Practice at Nielsen in an interview with Retail TouchPoints. Despite this growth, there’s still a large potential market for CPG retailers, Belgiano noted: the 64 million people who shop online, but not for CPG products. “Identifying those shoppers and helping convert them into CPG buyers is a huge opportunity, and since they have already dipped their toes into online shopping, it's not as tall of a task as finding new completely new buyers.”
Brick-And-Mortars Should Play To Their Strengths
Retailers that want to ride the wave of growing CPG e-Commerce sales should focus their efforts on areas where they can leverage their existing capabilities and expertise. For instance, retailers with established physical footprints are well-positioned to support widespread BOPIS deployment.
“The goal should always be to play to your strengths,” said Belgiano. “Being able to quantify for the first time the annual growth rate of CPG items online gives retailers a benchmark for comparison on their growth rates. For these particular retailers, capitalizing on the success of click-and-collect is a good opportunity. Having a physical presence, which Amazon doesn't have much of right now, lends itself to the click-and-collect model.”
Biggest Challenge: Customer Concerns Over Food Quality
However, even retailers without a large store base can take advantage of BOPIS to boost CPG sales. The key is overcoming one or more of the barriers that prevent shoppers from purchasing CPG goods online in the first place:
- Concerns about food quality (76%);
- Delivery costs or fees (42%);
- Lack of trust in the process (32%);
- Not as fun as shopping in-store (30%); and
- Delivery takes too long (27%).
Expanding from in-store sales to pickup and/or delivery requires retailers to honestly assess their own capabilities. For instance, a supermarket with local produce already meets shoppers’ demands for high-quality food, but ensuring those items are packed without being bruised by associates may require help from third-party specialists.
“The single greatest barrier that exists is concerns over food quality,” said Belgiano. “Shoppers still don't trust that someone else will give the same due diligence he or she would when selecting their perishable items. Providing a consistent, quality experience will gradually help them overcome this.”
Overcoming these barriers to BOPIS adoption is a fruitful path for retailers looking to more effectively compete with e-Commerce companies. While in-store pickup has become a well-established service, there is still plenty of room for further development — 22% of global shoppers don’t currently utilize BOPIS but are willing to try it, according to a 2018 Nielsen survey. By continuing to develop their fulfillment options, brick-and-mortar stores can create better omnichannel experiences.
“Physical retailers have built trust and equity over time and this is a great asset for them to leverage,” said Belgiano. “Given consumers are shopping in both online and offline channels, creating synergy between experiences is a real opportunity.”