Online Retail Today

3 Ways to Brace for Online Sales Tax Changes

So far, June’s U.S. Supreme Court ruling on sales tax collection has had little effect on merchants. But amidst ongoing debate in Congress and statehouses nationwide, sellers should brace for change in the coming year, and prepare to mobilize omnichannel efforts to smooth the transition.

The Supreme Court’s South Dakota v. Wayfair Inc. decision opened the door to sales tax collection for online purchases, but states are still formulating their responses. A Congressional hearing last month gathered input from supporters and opponents of the ruling, while past attempts at creating federal policy to simplify the existing patchwork of sales-tax rates and rules have continued to stall.

With so much variance in state-by-state sales tax rates, compliance can be tricky and costly.

With so much variance in state-by-state sales tax rates, compliance can be tricky and costly.
Source: Wikideas1 on wikicommons https://commons.wikimedia.org/w/index.php?curid=57036307

Amidst the confusion, merchants wonder what they can do to prepare for whatever the eventual result may be. The good news is that they can position themselves for success now – and many of the tools they need may already be available to them. Among the moves to consider:

Secure a nimble solution now for eCommerce sales tax compliance. Keeping up to date on changing legislation state by state and municipality by municipality can be onerous for small- to mid-sized merchants. They should verify whether their eCommerce software integrates with specialized solutions that help with up-to-the-minute sales tax compliance. Kibo clients can activate Avalara with a one-click integration, while the service TaxCloud is free to merchants.

Offset online sales tax with alternative discounts. One analyst conjectured that 1 in 10 online shoppers will revert to purchasing in physical stores due to implementation of online sales taxes. Merchants should anticipate that the bump in total order cost may dissuade price-conscious shoppers or buyers of big-ticket items, and find other ways to motivate the sale. Item price discounts, double loyalty rewards, or value-added services such as white-glove delivery and installation are among the options.

Strengthen online/offline connections to win sales. Merchants with physical outlets have an advantage if online sales taxes are levied more widely, in that store and eCommerce site pricing can be completely consistent. Shoppers can opt for stores to receive items instantly – or avail themselves of free store pickup for online orders as a means of skipping delivery costs and  keeping the online order total as low as possible. Merchants should work to fully integrate back-end operations in real time and streamline store pickup processes to encourage fluid omnichannel experiences.

How are you planning for potential sales tax adjustments in the coming year?

Holiday Gift Guide

Distributed Order Management: Holidays in August Edition

As summer swelters, merchants are busy planning for the winter season’s peak sales bonanza. New eCommerce site features and store designs may dazzle shoppers as they make their holiday debuts, but just as important – if not more so – is the engine with the potential to integrate these touchpoints into a seamless whole: the distributed order management system.

Retailers increasingly recognize the importance of fulfillment alternatives such as Buy Online, Pickup In-Store (BOPIS) and “endless aisle” capabilities that link store shoppers to online inventory. That’s because such services are increasingly popular, especially over the holidays.  In 2017, for example, 58% of holiday shoppers reported they planned to use BOPIS – a 25% increase from the prior year, according to Kibo’s Holiday Consumer Trends report.

Furthermore, merchants of all stripes – from online-only retailers to brand manufacturers selling direct to consumer  – increasingly face pressure to boost order fulfillment speed. Thanks to the wide popularity of Amazon’s Prime service, which includes free 2-day shipping and reportedly counts more than 95 million members in the U.S., expectations for swift and free holiday delivery are on the rise. Last year, a holiday survey from research firm, Deloitte, found that 64% of shoppers would pay nothing extra to receive holiday orders in 2 days, and 65% believed they could order holiday gifts after December 17 and still receive free on-time delivery for Christmas.

Robust order management software is key to providing both in-store fulfillment services and the swiftest possible delivery options – but merchants have so far been slow to prioritize overhauling legacy systems. Technology researcher, Forrester, found that just 5% of retailers ranked order management as a top operations initiative for 2018, which means that many sellers may find themselves ill-equipped to realize their holiday fulfillment goals.

Even those who’ve taken steps to modernize their omnichannel fulfillment systems are fast approaching “code freeze”, when new features and integrations are put on hold to ensure the stability of the eCommerce site, mobile apps, and back-end systems through the holiday season. But given the high consumer expectations for seamless fulfillment, merchants can – and should – continue to work on optimizing order management operations through the end of summer and into fall.

Fortunately, there are many order management improvements that retailers and online merchants can make which don’t require a total code overhaul or new integrations.

 

Repeatedly test BOPIS features end-to-end.

Retailers with physical stores, as well as manufacturers who’ve integrated their website offerings to feature retail partners, have much to gain from a seamless BOPIS operation. Not only can fast, free order pickup satisfy holiday shoppers’ need for fulfillment speed; as the clock counts down to the holidays, BOPIS can bridge the gap between online and offline for last-minute shoppers who order too late for home delivery. In fact, some 30% of merchants last year didn’t publicize guaranteed delivery cutoff dates. And those that did set the cutoff an average of one day earlier, compared to the previous year. This change was in part due to the availability of last-minute alternatives such as BOPIS.

To realize the full potential of BOPIS for the holidays, merchants should test the functionality of their system extensively, including monitoring online inventory visibility for accuracy, fine-tuning post-purchase transactional emails and notifications, streamlining mobile BOPIS features, and using outsider “mystery shoppers” to ensure store signage is clear and pickup counter service is on-point.

 

Prepare to capitalize on pickup traffic in stores.

Some 36% of consumers who use store pickup report buying additional items off the shelves, according to Forrester. Anecdotal evidence suggests that during the holidays, that percentage is even higher.

BOPIS users who buy additional items say that special deals highlighted in-store are among the top reasons they make additional purchases, according to Forrester. Merchants should therefore ensure that store pickup customers are cognizant of the latest holiday deals. Transactional emails and pickup notifications should feature an invitation to receive localized deal alerts via email and/or mobile.Signage near the pick-up counter should give shoppers another opportunity to learn about in-store events and promotions. Assortments of stocking stuffers and other gift-friendly merchandise should also be on prominent display nearby.

 

Train seasonal store workers to “save the sale.”

More than half of store shoppers are willing to have out-of-stock items ordered online and shipped to their home, Forrester found, suggesting that merchants who are well-prepared can indeed “save the sale.”  Shoppers are increasingly using this option, with close to 60% of participants in Kibo’s 2018 Consumer Trends Report survey saying they’ve relied on store associates to locate items elsewhere in the past six months – an 18% jump compared with the previous year.

To take advantage of this opportunity, merchants should ensure that regular and seasonal store workers are well-versed in procedures for locating and ordering items from other outlets, and store-to-store inventory tracking should be tested for accuracy.

 

Prepare for the wave of post-holiday returns.

In addition to optimizing the potential for customer acquisition and sales using omnichannel fulfillment, merchants should also spend time before the holidays vetting their reverse logistics. That’s because anywhere from 20% to 30% of items ordered online are returned, according to Multichannel Merchant – and the percentage can surge still higher during the holidays. Indeed, in 2017 Deloitte found that some 44% of shoppers predicted they’d take advantage of policies that enable easy returns.

Fully 58% of shoppers prefer to return items to local store outlets, according to UPS’ Pulse of the Online Shopper report – and given that up to 70% of in-store returns can result in new sales, merchants should promote the option, if it’s available, to encourage disappointed gift recipients to visit and examine alternative purchases. Even if immediate new sales don’t result, flexible and hassle-free returns can engender plenty of holiday goodwill, earning brand trust and a possible future repeat visit.

How are you preparing order management operations for the holiday rush?

increase foot traffic

 5 Ways for Retailers to Increase Foot Traffic  

With store closures skyrocketing in recent years, the retail sector is poised to lose over 100 million square feet of space in 2018. This equates to roughly 3,400 expected store closures stemming from what were once thought to be stable big-box chains, like Toys R Us, Sears, and Sam’s. These closures are a harrowing reminder that consumer expectations are always changing. Household names like JC Penney, Bebe, Radio Shack, Sports Authority, Cabela’s, Payless, Macy’s, and countless others are experiencing the pain striking the retail industry.

The traditional retail landscape has no doubt changed partly due to the global eCommerce industry, which is expected to grow to $3.4 trillion by 2019. Some retailers and brands may feel this is a threat to stores, but we see it as an opportunity.  With changing customer preferences there must be a change in tactics. Consider these five unconventional tips to increase foot traffic to your stores:

  1. Buy Online Pick Up In Store (BOPIS)
    A sure-fire way to increase foot traffic is through BOPIS. It is the perfect example of marrying eCommerce with traditional retail in stores. BOPIS gives customers greater control and convenience when purchasing their items.  Additionally, when BOPIS customers come to pick-up, our research has found that these customers make another purchase at least 40% of the time. The retailer who can flawlessly implement flexible fulfillment options will win the day. But a word to the wise: In order for customers to continue to use BOPIS over and over again, the entire experience needs to be easy and streamlined. It’s always a good idea to check in with in-store operations and get feedback from your customers.
  2. Local Inventory Availability  
    Simply put: if the consumer can’t see on the website that what they want is on the store shelf, they won’t risk a trip to the store. As stated above, customer expectations are changing, and our latest research found that 64% of customers expect to be able to view local product availability prior to visiting the store. Additionally, 81% of consumers said they have looked up inventory on a retailer’s website before visiting the store and 80% are less inclined to visit a store if a website does not provide current product availabilityThis is an enormous set of people who will make their purchase locations based on whether it’s obvious their desired item is available. Consumers have greater choice between individual retailers and will make decisions in their self-interest. Local inventory availability is a giant flag to customers that you have the items they need, right now. The visibility provided by a robust order management system is sure to address this. Find out everything you need to know about order management in this eBook, The Ultimate Guide to Order Management.
  3. Personalized Promotions  
    Retailers have the responsibility of using their online real estate to drive sales, and each pixel on your customers’ screens can be used to better serve them and your stores. Offering in-store promotions, even through email, will help build brand loyalty and invite customers to experience your stores.Customers are moving toward a distaste in generalized targeting, and a real thirst for personalized promotions. Kibo’s patented machine learning engine combines layers of algorithms with the online data hub to create a composite framework that delivers more meaningful results. With advanced individualization and a store-centric call to action, customers will find themselves in your store more frequently than if you were using a typical mailer.
  4. Transform Stores Into Experience Centers
    If the traditional retail store is failing on its own, then something must change. In addition to working hand in hand with eCommerce, a great way to increase foot traffic is to transform your stores into experience centers. It’s easy to look to popular beauty retailers as good examples of stores-as-experience-centers. In another example, some stores are implementing interactive dressing rooms with smart mirrors. Even Amazon has chosen this path, with their physical bookstores providing one of the most coveted experiences of their online shop: product reviews.And don’t forget about the power of the store associate. If the store associate is equipped with knowledge about a product, if only simply on a tablet, it makes in-store purchasing that much easier for the consumer. Drive brand loyalty and foot traffic by providing a consistent, unique, and fulfilling shopping experience.
  5. Go Mobile
    Go where your customers are: on their phones. Sticky sites build loyalty and raise your conversion rates. Any time spent on your site that creates a positive experience will surely capture attention, one of our most precious commodities. Customers are frequently on their phones because they are on the go. If your website isn’t optimized for mobile, no matter if you have BOPIS and local inventory visibility, if the customer can’t see that on their mobile phone then they simply won’t use it.Increase in-store foot traffic by increasing convenience via mobile websites. If a parent waiting to pick up their kid from soccer practice can easily use your website to get a question answered, even something as small as hours of operation, then they are much more likely to make a stop at your store before heading home instead of skipping you all together. Forrester’s annual retailer survey ranked mobile at the top of the list of strategic priorities for the fourth year in a row. This blog has 4 ideas about how to think about stores with mobile.

 

The retail space is certainly changing, and  companies must take a more nimble, calculated approach to promoting and selling their products. Those keeping up are the ones who place high priority on the complete unified omnichannel experience. Don’t give up on stores, just use them differently. How have you increased foot traffic?

customer experience with omnichannel

Manufacturers: BOPIS is for You, Too

Manufacturers are increasingly taking advantage of their online presence to establish direct connections with shoppers. Crucial to continued success is offering popular store pick-up options – or BOPIS, in the current lingo – which can not only meet rising expectations for omnichannel fulfillment, but strengthen retail partner relationships in the process.

Given that online browsing and research influence fully half of all retail sales, brand manufacturers are seizing the opportunity to establish direct relationships with consumers through website offerings. Investment in deep product information has paid off, with consumers saying such content is the leading reason they seek out manufacturers’ Web sites, according to the Kibo 2018 Consumer Trends Report.

But many manufacturers hesitate to go all-in on transactional eCommerce software and order management systems – both because the prospect of wading into the world of direct-to-consumer retail sales is daunting, and because of potential channel conflicts with retail partners.

Many brand manufacturers invite shoppers to link away to retail partners’ eCommerce-enabled sites in order to purchase online. But such disjointed experiences are increasingly inadequate in a world where eCommerce juggernaut Amazon trains shoppers to expect frictionless, one-click transactions.

Indeed, Kibo’s Consumer Trends Report survey found that shoppers already look to manufacturers to provide fulfillment options as comprehensive as their product content. Fully 45% of surveyed shoppers said they expected manufacturers to offer a wider assortment of products, and 40% expected more products to be in-stock, than could be found at local retailers. Nearly a third of respondents said they expected manufacturers to offer the broadest array of order fulfillment options when compared with retailers.

To meet those expectations, manufacturers should invest not only in eCommerce transaction capabilities, but also robust omnichannel fulfillment software – and then prioritize Buy Online, Pickup In-Store (BOPIS) as the first feature they enable.

BOPIS is widely popular, with 66% of Kibo survey respondents saying they use it. Because it’s fast – some stores offer pickup within hours – BOPIS satisfies shoppers’ increasing expectations for swift and free fulfillment; 63% of online shoppers now say they expect to receive items ordered online within three days, according to the Kibo study.

With the right order fulfillment software, manufacturers can use BOPIS to cement the store-brand connection, by:

 

Leveraging existing retailer relationships.

When Mizuno USA’s 5,000 retail partners saw the athletic gear manufacturer broadening its eCommerce capabilities, they feared channel conflict – a concern Mizuno put to rest by integrating retail outlets and their inventory into online fulfillment options.

“Initially, our small mom and pop retailers were concerned that we were going direct-to-consumer; then we got them to understand that we want to include you in that process. We want to use you guys for fulfillment on our behalf,” explained Keith Neeley, vice president of Operations and eCommerce for Mizuno USA.

Thanks to the real-time inventory capabilities of Kibo’s order management system, online shoppers can instantly find the Mizuno retail partner with the product they want nearest them.

Such integrations are a win-win for manufacturers and retail partners alike. Manufacturers burnish their reputations with consumers for offering a seamless eCommerce experience, while retail partners stand to gain when shoppers visit outlets to pick up orders and make additional purchases.

Some 44% of shoppers who pick up orders in-store buy more items on the spot, according to data from the UPS Pulse of the Online Shopper report for 2018. During the recent holiday season, leading retailers such as Kohl’s, Target, and Lowe’s reported that anywhere from 20% to 40% of BOPIS customers went on to buy more in-store, and added an average of 25% to the order total.

 

Driving traffic to manufacturers’ own retail outlets.

In an effort to forge tighter bonds with consumers, more and more manufacturers are opening the doors on branded stores, which can serve as powerful platforms for events, strategic content, and promotions. The number of manufacturers planning to open brick-and-mortar channels in the next three years has jumped by 18 percent, according to a study by international retail consultant Ebeltoft Group.

Manufacturers can add their own outlets into the BOPIS mix, encouraging online shoppers to visit and immerse themselves in branded store environments. With the backing of robust order management capabilities, manufacturers with stores can transform outlets into fulfillment hubs, with store pickup enhanced by associates’ ability to source and order items at other locations.

Apple, legendary for its sleek and streamlined product designs, also offers streamlined order fulfillment with fully-integrated and fast Apple Store pickup. Notifications and tracking are available via a mobile app. Customers who opt to use the service can avail themselves of knowledgeable store staff to help set up devices, increasing the likelihood they’ll be satisfied with their purchase – and purchase further accessories on site.

Example for in-store pick (BOPIS) up from Apple's website
Do you offer in-store pickup as a manufacturer? Or, if you’re a retailer, do you handle orders direct from manufacturers?

eCommerce, Order Management, instore pickup, ship from store

To Compete On Prime Day Retailers Must Deliver Omnichannel Relevance

Amazon.com’s Prime Day is now widely recognized as both a threat and a boon to other merchants, who stand to lose ground to the online giant or benefit from increased shopping activity across the Web — or both. With last-minute tactics that spotlight omnichannel capabilities, merchants have the opportunity to tilt the balance in their favor.

 

Prime Day is thought to be set for July 16 this year and will offer Prime club members exclusive deals on a bevy of items. Initially held as part of Amazon’s 20th anniversary celebrations, Prime Day is now heading into its fourth year, and has become a Christmas-in-July-like event that generates hype — and sales — for the online giant. In 2017, Amazon reported that Prime Day sales topped the prior year’s Black Friday and Cyber Monday totals, and generated more new Prime club signups than on any other day previously.

 

As the event’s popularity has soared, not only have merchants selling via Amazon’s third-party marketplace seen a boost — but other retailers have succeeded with promotions intended to compete with Prime Day. Last year, close to half of the sellers on Internet Retailer’s list of top 100 companies offered Prime Day alternatives in the hopes of capturing the attention of the 76% of shoppers who told Bazaarvoice they’d check sites other than Amazon for deals.

 

The lift for other retailers on Prime Day can be substantial, with brands seeing conversion rates jump by as much as 41% and a sales boost of some 57% last year, according to commerce marketer Criteo; even those not offering a Prime Day-related promotion saw a revenue bump of 5%.

 

While it’s too late for merchants to upgrade their eCommerce software or Web site personalization in time for this year’s Prime day, they can still position themselves to take advantage of the spike in shopping activity — with omnichannel fulfillment and one-to-one personalization playing a key role. Among the techniques to consider:

 

Put stores front and center. Amazon’s acquisition of upmarket grocer Whole Foods was too fresh on last year’s Prime Day to have had much impact on the day’s offerings — but this year is likely to be another story. Amazon has recently rolled out Whole Foods discounts available exclusively to Prime members, and Prime Day 2018 is likely to see a similarly integrated effort.

Retailers with physical outlets should make stores the centerpiece of their own Prime Day promotions — both by highlighting special store events and discounts for the occasion and by touting the ability to use stores for fast, free, convenient order fulfillment via Buy Online, Pickup In-Store (BOPIS) that rivals home delivery via Prime.

 

Play up the everyday savings contrast. Promoting BOPIS as a year-round, free fulfillment option isn’t the only way merchants can position themselves against Prime Day’s flash-sale hype. By spotlighting such omnichannel offerings as everyday free shipping policies, fuss-free returns in stores, and post-purchase support across touchpoints, merchants message brand value that goes beyond individual product prices.

 

Spotlight concierge loyalty service. Given that Prime Day is, at heart, a giant promotion of Amazon’s paid membership club, merchants should do their utmost to showcase the perks that come with their own loyalty programs — from easy reordering via mobile eCommerce apps to in-store clienteling services that draw on past interactions with the brand. Potential loyalty rewards should be spotlighted extensively both in stores and online, as Kibo merchant World Market does with a dedicated page accessible from the global header.

Demonstrate relevance.

Shoppers increasingly appreciate brands’ abilities to save them time and money by curating offerings to reflect their preferences; indeed, more than half of shoppers say their purchase decisions are influenced by personalized content, according to Kibo’s Consumer Trends report. Merchants who can combine shoppers’ preferences and order histories with deep, rich content can go beyond Amazon’s broad-but-shallow carousel of products to create unique, engaging shopping experiences. Merchants can further demonstrate real-life relevance by creating campaigns on social media, the eCommerce site, and in stores that spotlight user reviews, photos, and testimonials.

 

Save discounts for where it counts.

While the impulse to slash prices across the board to keep up with Prime Day deals is tempting, merchants are unlikely to win a race to the bottom, given Amazon’s deep pockets. Instead, sellers should focus their Prime Day discounting on the top sellers and trending items that shoppers seek out most, and drop prices for those items as low as their margins can withstand. To drive volume, merchants should align paid search spend and other digital advertising for the day to focus on those products, and optimize content resources to the hilt with how-to instructions, product demonstration videos, and imagery.

 

How are you preparing for Prime Day, and what special discounts will you offer, if any?

 

in-store fulfillment

3 Tips to Getting the Most from Your In-Store Fulfillment

Reports of the death of stores have been greatly exaggerated. In fact, savvy merchants recognize that their networks of physical locations – far from being costly liabilities – have the potential to give them an edge when it comes to fast, efficient order fulfillment. But to take advantage of that opportunity, sellers need to implement not only modern order management software, but the best practices that fulfill customer expectations.

Merchants need look no further than the biggest names in retail to see the power of in-store omnichannel fulfillment. After purchasing Whole Foods for $14 billion last year, Amazon has now installed lockers in some 16% of the grocer’s 473 locations for pickup of online orders. Walmart, meantime, offers 700 pickup towers of its own, which act like large vending machines dispensing products purchased online prior to the store visit. And department store Kohl’s enjoyed 6.3% year over year holiday revenue growth in 2017, thanks in part to operational efficiencies that saw more than a third of online orders fulfilled through its store locations.

Such gargantuan efforts to integrate order management systems, eCommerce software, and store point-of-sale terminals help meet rising customer expectations for integrated omnichannel experiences. In-store fulfillment capabilities:

  • Enable popular in-store pickup options — fast. Some two-thirds of participants in Kibo’s 2018 Consumer Trends survey said they used Buy Online, Pick Up In Store (BOPIS), and 30% said that when they did, they expected to be able to retrieve items ordered online within 24 hours. Store-to-store networks help merchants fulfill pickup orders more quickly than shipping to stores from a remote distribution center.
  • Enable faster home delivery. Kohl’s reported that home delivery timeframes were 25% faster when using store fulfillment — satisfying shoppers’ growing need for speed even for economy or free shipping. And thanks to proximity, costs can be lower than shipping across state lines from the distribution center.
  • Make out-of-stock a rarity. Access to the brand’s entire inventory is crucial to both online and offline consumers: Some 57% of shoppers in Kibo’s study report relying on store associates to source out-of-stock items at other locations, while online, access to store inventory can prevent cart abandonment on the part of some 24% of shoppers who report leaving sites when they discover items aren’t available for immediate fulfillment, according to technology researcher Forrester.

 

Retailers additionally benefit when they leverage their networks of store locations, because:

  • They achieve optimal inventory efficiency. Processing online orders with existing in-store inventory can help manage stock organically, instead of relying on tactics such as deep end-of-season discounts. And retailers who draw on local inventory to fulfill both online and offline purchases can better understand regional demand.
  • They earn incremental revenue. Customers who pick up items shipped from another location are likely to add more to their orders. Forrester found 34% of customers who used in-store pickup made additional purchases in the store.

 

To realize these omnichannel benefits, however, merchants must make significant investments in order management and eCommerce software – and follow through with extensive reorganization to support new offerings. Among the line items to include when scoping the project:

 

Store layout overhaul and stockroom expansion.

Retail stores and fulfillment warehouses are very different facilities for good reasons, largely related to maximizing revenue per square foot. Traditional physical stores are designed to maximize showroom floorspace, leaving the stockrooms in often-cramped quarters not designed for employees to efficiently pick orders.

In many cases, merchants have opted instead to send associates into the aisles to pick orders for shipment, which comes with its own inherent inefficiencies — such as shoppers interrupting pickers with time-consuming requests for assistance. Retailers who can dedicate more room to stockroom inventory and streamline showroom space can keep employee functions separate.

 

Development and testing of new procedures.

Merchants should engage store management to develop new routines for modern omnichannel operations. For example, merchants should have a plan for how to handle orders that contain items sourced from multiple store outlets – an increasingly-common situation that requires logistical prowess. Such new practices should be tested extensively before introducing them to store staff and customers.

 

Staff diversification, expansion, and training.

With omnichannel fulfillment comes new roles for store employees, such as servicing online order pickup and picking and packing orders for delivery. Retailers should include the cost of hiring additional associates for such tasks when budgeting for omnichannel fulfillment expansion.

And, of course, ongoing employee training is crucial if new offerings are to succeed. Training in omnichannel processes is key, as are incentive programs that reward associates not only for closing sales in the aisles, but taking advantage of store capabilities as service and fulfillment hubs.

Despite the logistical and technological complexity of mastering store-to-store fulfillment, the potential rewards are significant. One Kibo customer integrated order management functionality, eCommerce software, and in-store operations in order to offer swift in-store pickup for online orders – and reported 110 percent year-over-year online revenue growth as a result.

 

What’s holding you back from implementing new in-store delivery services?

omnichannel fulfillment, OMS customer experience

Three Ways To Entice BOPIS Customers To Shop In-Store

The biggest brand in retail, Walmart, is continually announcing plans to further invest in technology to support buy online, pickup in-store, aka BOPIS — signaling that omnichannel fulfillment is an essential offering for retailers. But with shoppers’ convenience a prime imperative, merchants must accompany BOPIS with ultra-relevant promotions to drive supplemental in-store sales and long-term engagement.

Walmart’s latest move, announced earlier this month, will bring its gigantic automated pickup towers to 100 more locations after an initial pilot showed promising results. Shoppers scan a bar code stored on their phones at pickup tower kiosks to retrieve the items they ordered online, which are stored inside the machine.

The tower deployment follows Walmart’s decision last year to offer discounts on selected items ordered online and picked up in-store, and is further proof that the mega-retailer is willing to invest heavily to engage online/offline shoppers for omnichannel fulfillment. 

The investment is no doubt based on consumers’ growing expectation that retailers with physical store outlets will offer an integrated omnichannel solution: Kibo’s 2017 Consumer Trends study found that not only do 78% of shoppers use BOPIS, but 49% are willing to remain loyal to brands offering the service. On the flip side, 55% will switch retailers if their preferred fulfillment method isn’t available, and 80% report they’re less likely to shop with a retailer whose website doesn’t provide information about local inventory availability.

Furthermore, shoppers expect BOPIS to be ultra-convenient and fast. More than half of shoppers said they used the service because they needed items that day, according to research by Bell and Howell, and 56% said a quick in-and-out experience was important when picking up orders.

Walmart is striving to meet those expectations for immediacy and convenience by placing their towers in the front of the store, with self-service functionality that completely circumvents pickup counters and their attendant lines. Together with Amazon’s recent (and decidedly mixed) experiments in checkout-free shopping, Walmart’s pickup towers represent a vision of the shopping future that is quick, convenient, and devoid of human interaction.

And therein lies the rub. Close to 60% of BOPIS users currently report making additional purchases in-store, according to Bell and Howell — but merchants fear frictionless experiences like Walmart’s that barely bring shoppers inside the store may jeopardize such add-on purchases. And automated processes that replace store staff endanger the one-to-one interactions that can foster sales and loyalty. More than four in five shoppers told Kibo they’ve been persuaded to complete purchases thanks to store associates equipped with mobile point-of-sale tools.

That doesn’t mean merchants should fight innovations that streamline buy online, pickup in-store fulfillment or, worse, manufacture a meandering pickup process in the hopes of luring shoppers into additional store purchases. A poor experience will only make any future brand interaction less likely.  

Instead, merchants should deliver first and foremost on the promise of BOPIS convenience, and then capitalize on the positive experience with savvy promotions that encourage shoppers to return for further purchases.

To achieve that vision, merchants should:

 

1. Lay the foundation with the right technology. Integrated order management, eCommerce, and fulfillment systems that can serve shoppers nimbly whether online or in-store are key. A unified solution gives merchants maximum flexibility to integrate in-store information within the eCommerce environment, enable swift omnichannel fulfillment from store inventory, and connect mPOS-enabled associates with comprehensive customer history profiles, among other benefits.

 

Kibo merchant World Market integrates store information seamlessly into the eCommerce product page, enabling shoppers to view inventory status and store hours and choose a fulfillment location via a modal window.

 

2. Use personalization tools to deliver time-sensitive offers. We’ve discussed before how the benefits of personalization extend well beyond cross-sells and up-sells on the eCommerce site — and buy online, pickup in-store represents a ripe opportunity to reach existing customers with highly relevant offers, converting self-service pickup stops into additional store purchases. Based on order history and store pickup location, merchants can deliver:

  • In-store coupons for items that complement the order, good for a limited time. Such offers can be delivered to mobile devices or included in BOPIS packaging.
  • Invitations to attend store events or try in-store services such as personal shopping consultations.
  • Real-time shopping alerts highlighting items of interest that are in low supply on the store shelves, new items in the customer’s preferred size or style that have just arrived in-store, or brands or products that are trending on social media and available in the store.

Learn more about how Kibo’s patented personalization technology delivers real-time insights to enable relevant promotions wherever customers shop.

 

3. Award BOPIS customers store loyalty points. Merchants should not only invite BOPIS customers to join loyalty programs, but they should consider using bonus points strategically to encourage subsequent return visits and purchases. As a starting point, sellers can offer bonus points to those who use in-store pickup as a means of passing along savings on last-mile delivery. Once BOPIS customers enroll, merchants can then promote further opportunities to re-engage and earn rewards, such as rating the store pickup experience, signing up for in-store events, or redeeming store-specific coupons.

 

How are you balancing the need to boost buy online, pickup in-store convenience with the opportunity to drive additional store sales?

omnichannel fulfillment - buy online, pickup in store

How To Use Omnichannel Fulfillment For Better In-Store Experiences

In the increasingly intense battle for survival, retailers are focusing more than ever on the in-store experience. So far, the crucial role stores play in omnichannel fulfillment has been undervalued — suggesting that more retailers should focus innovations on the stockroom as well as the showroom.

By multiple measures, shoppers’ expectations for omnichannel fulfillment are growing. More than three quarters of consumers say having multiple fulfillment options is important when deciding to purchase, according to survey data in Kibo’s 2018 Consumer Trends Report. Fully 78% of shoppers have looked up store inventory online prior to a visit, the survey found, while two-thirds have completed purchases online for store pickup.

Furthermore, investment in omnichannel fulfillment can not only help online researchers become store buyers; it can help retailers deliver shoppers in the aisles the same unlimited options and availability they might find with a keyword search online. Indeed, 57% of participants in Kibo’s survey reported completing orders in-store with the assistance of associates who located out-of-stock items and arranged delivery — an increase of more than 18% compared with the prior year.

Given such clear indications of consumer preferences, it’s surprising to learn there’s a disconnect between the goal of omnichannel excellence and an investment in the omnichannel fulfillment solutions that support it. Buy Online, Pickup In-Store (BOPIS) and “endless aisle” capabilities do indeed top the list of customer-facing store priorities for retailers in 2018 — but just 5% of retailers said order management software was a key initiative on the operations side, according to technology researcher Forrester.

Perhaps because of this gap between store-experience vision and operational reality, many retailers give themselves low marks when it comes to omnichannel execution. Forrester found that just 16% of retailers agreed completely that they had the right omnichannel technology in place, for example.

This glum assessment nonetheless presents an opportunity for retailers who want to differentiate themselves in a crowded marketplace. By using modern omnichannel fulfillment software, sellers can increase inventory transparency and fulfillment flexibility, leading to improved store experiences that:

 

Connect online shoppers with (more) products faster.

Services such as BOPIS give shoppers an alternative to home delivery for online orders — enabling them not only to save on shipping costs, but to set their own fulfillment schedule. Indeed, 85% of Kibo survey participants said BOPIS was beneficial because they could pick up orders when they wanted, while 73% said they used store pickup so they didn’t need to wait at home for a delivery.

But given shoppers’ growing expectations for speed, it’s not enough for retailers to offer BOPIS without the order management moxy to back it up. Indeed, 30% of shoppers in Kibo’s survey said they expected to be able to pick up items in-store within a day — signaling that slow freight from a distribution center is no longer adequate.

Merchants who meet rising expectations for speedy store pickup are more likely to win additional business from BOPIS customers. The latest UPS Pulse of the Online Shopper reports  that 44% of those using store pickup go on to buy more items while in-store — so the opportunity is significant for those merchants who get BOPIS right.  

Kibo client Cost Plus World Market allows many of its home furnishing items ordered online by 5 p.m. to be picked up that same day at local stores — giving shoppers immediate access to their chosen goods. Real-time transparent inventory is coupled with up-to-date store information to give shoppers all the information they need in the moment to select a location and commit to purchasing prior to pickup.

 

 

 

Give store shoppers access to the “endless aisle”.

Given that shoppers consistently cite unique finds and broad selection as top reasons to shop online, merchants should open their entire inventory to store visitors — including limited-edition and exclusive items and products from prior seasons housed elsewhere. Omnichannel fulfillment software that connects inventory from store outlets and distribution centers through a seamless portal can help store shoppers source products from across the network, without needing to drive from location to location.

Real-time inventory can also make “out of stock” obsolete — if merchants equip store associates with the tools and technology they need. Forrester found that 61% of store associates can locate items at other outlets or the distribution center, but just 23% can access eCommerce site product information, and a mere 17% can actually “save the sale” on the spot with a mobile point-of-sale. Merchants who invest in mobile connectors to integrated order management software and omnichannel fulfillment options can differentiate their store experiences significantly.

 

Keep revenues from returns and exchanges in-store.

The benefits of flexible omnichannel fulfillment extend beyond the purchase process. Given that 13% of online orders are returned, according to Forrester, merchants should also leverage order management software and omnichannel capabilities in reverse to deliver a hassle-free experience that encourages further spending along the way.

Not surprisingly, the UPS Pulse of the Online Shopper survey found that 58% of U.S. shoppers prefer to return items bought online to physical store outlets.  Many merchants still charge a restocking fee in addition to postage for online returns — and, of course, making a special trip to the Post Office is an added hassle.

Merchants who help shoppers avoid such a tedious process can earn plaudits for customer service — and, once shoppers are in-store, they can be enticed to spend refund or exchange monies on new products more to their liking.

 

How are you leveraging order management and omnichannel fulfillment capabilities to enhance the store experience?

retailers digital transformation

Retailers: It’s Not An Apocalypse, But An Evolutionary Event

What’s really going on in retail? Bankruptcies and store closures splash across front pages, while at the same time Amazon and Walmart make headlines with their latest and greatest innovations. To determine what is really going on in retail, a recent retail technology study produced by Retail Info Systems with research partner Gartner and sponsored by Kibo, received results from 90 retailers on the following:

  • annual sales volume,
  • primary business model,
  • top obstacles over the next 18 months,
  • top technology driven strategies over the next 18 months,
  • stage of their organization’s digital transformation, and more.

It was found that 77% of retailers did not achieve the average gain recorded for the overall industry in 2017. They either went backwards, stayed the same, or registered a sub-par increase.

Despite this finding, it was concluded that no, retail is not going extinct, but instead is experiencing an evolutionary event. The study encourages retailers to jump on the big opportunities and strong headwinds accelerating the pace of unified commerce and digital transformation.

From the study, “Amazon is not the asteroid that struck planet retail. Competitive pressures from disruptive, pure-play e-commerce players and new physical retailing models are causing radical changes to antiquated business models, driving down prices and driving up costs. Retailers are rightfully concerned about how to accomplish the herculean task of transforming a traditional, multichannel retailer into a digitally enabled provider of unified retail commerce.

To combat market share erosion and take advantage of the opportunities offered by digital transformation, multichannel retailers need to recognize that their extensive network of stores can be part of an effective, unified commerce strategy. Expanding unified commerce initiatives takes the number one spot on our list of top technology strategies pursued over the next 18 months.”

The top four technology driven strategies over the next 18 months are:

  1. Expanding unified commerce (omnichannel) initiatives 54%
  2. Leveraging social media engagement 54%
  3. Increasing customer engagement 51%
  4. Developing personalized marketing capabilities 47%

More and more we see the need to focus on the customer experience. This focus is represented in all three strategies above, as retailers aim to connect with consumers wherever they may be.

 

To learn more from this report download it now.

Order Management System, Direct to Consumer Order Fuflfillment

3 Priorities For Manufacturers To Build Direct-To-Consumer Sales

Establishing direct-to-consumer relationships is more important than ever for branded manufacturers — many of whom hesitate to embrace eCommerce for fear of alienating retail partners. But with the right order fulfillment software in place, manufacturers can both establish strong direct relationships with customers while also driving business to their partner networks.

Branded manufacturers are considered definitive product resources. Superior product content was the leading reason shoppers would choose to purchase directly from a manufacturer’s Web site, according to consumers surveyed for the Kibo Consumer Trends Report 2018 Given that some 85% of shoppers start their research online before visiting stores, offering a robust online catalog is crucial.

But perhaps surprisingly, survey participants also favored branded manufacturers because of their enhanced inventory and fulfillment capabilities. Fully 45% of shoppers said they expected manufacturers to offer a wider assortment of products and 40% expected more products to be in-stock than could be found at local retailers.

Furthermore, close to a third of respondents said they expected manufacturers to offer the broadest array of order fulfillment options when compared with retailers — signaling that manufacturers should invest in robust omnichannel fulfillment software with capabilities such as real-time inventory visibility, Buy Online Pickup In-Store (BOPIS) features, and connectors to order management software.

Adding these capabilities to match modern eCommerce standards needn’t conflict with manufacturers’ existing retailer partnerships. Instead, implementations can leverage — rather than cannibalize — these relationships to create a broader network of fulfillment options. For example, manufacturers who implement omnichannel fulfillment software can use retail partners’ physical locations to fulfill BOPIS orders. By inviting customers into local outlets to pick up orders, manufacturers hand retail partners an opportunity to win additional purchases. That opportunity is a growing one: during the recent holiday season, for example, leading retailers such as Kohl’s, Target, and Lowe’s reported that anywhere from  20% to 40% of BOPIS customers go on to buy more in-store, and add an average of 25% to the order total.

Similarly, partnering with retailers to provide ship-to-store services enables manufacturers to offer another free fulfillment option to consumers. And manufacturers who adopt distributed order management processes can rely on retail partners to pick, pack, and ship orders from stores for home delivery, speeding order completion for the customer and potentially realizing a cost savings compared with shipping direct from the manufacturer.

 

To seize the opportunity to build direct relationships with customers, drive sales, and benefit partners, manufacturers should:

 

Facilitate accurate inventory with real-time inventory feeds.

Nothing is more frustrating for shoppers than researching online to find where a product is available locally, only to discover upon arrival that the item is actually out of stock in the store. Manufacturers should avoid that scenario at all costs by ensuring that omnichannel fulfillment software can support constant updates to inventory feeds from multiple retailer sources.

If need be, manufacturers can step gradually into broadening their fulfillment options, keeping in mind that delivery  speed is increasingly of the essence for shoppers, 63% of whom say delivery within three days is now the norm. Manufacturers may want to test the fulfillment capabilities of their retailer network by offering free site-to-store shipping, then attempting ship-from-store home delivery before launching BOPIS.

 

Develop deep product content.

Shoppers have a keen appetite for robust content from manufacturers, who should deliver by offering deep-dive technical details, notes on product sourcing and development, comparison guides, and interactive fit and sizing tools. Customer reviews are important to shoppers, 61% of whom they expected manufacturer sites to have them, while customer Q & A, expert or celebrity testimonials, media mentions, and other endorsements from authoritative sources can also be aggregated and displayed.

Such investments not only satisfy shoppers’ expectations, but can help manufacturers earn visibility in natural search results — especially if content is presented in mobile-friendly format, which boosts rank in Google’s algorithm. An eCommerce software solution that supports responsive design can help manufacturers make the most of their content storehouse, as handbag maker HOBO did on the Kibo platform. The manufacturer has boosted visitors’ time on page by 24% with engaging features such as the Look Book, which renders equally well on desktop computers and mobile devices, and has seen revenue jump 62% year over year.

 

  

 

Smooth the path to (immediate) purchase.

Regardless of to what extent they integrate with retail partners, manufacturers should aim to move site visitors from research and consideration to immediate purchase on their own eCommerce sites. With Amazon and other industry giants setting high expectations for frictionless transactions, 78% of shoppers in Kibo’s survey reported that a simple, smooth checkout helps sellers win sales — so manufacturers should avoid bouncing visitors away to complete transactions. Instead, they should integrate retailer partner options together within their own branded hub, with orders routed to the order management system after purchase. In so doing, manufacturers cement their status with consumers as definitive information hubs for both product content and product distribution and availability.

 

By leveraging their dealer networks and implementing robust order management, omnichannel fulfillment, and eCommerce capabilities, manufacturers are well-positioned to earn sales and loyalty through direct customer connections.