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Buy Online, Pick Up in Store (BOPIS): Know the risks (and rewards)

Omnichannel shopping is one of retail’s biggest trends. And it’s growing. In fact, according to the Retail Industry Leaders Association, omnichannel presence is the new, No. 1 ‘imperative’. BOPIS, part and parcel of a modern omnichannel strategy, is now an ecommerce necessity. Yet it also comes with a price tag, including potential fraud and added operating costs. Is it really worth it?
buy online, pick up in store

Jan Florian Richard | Oct 25, 2022 5 min

About two-thirds of shoppers buy online and pick up in store multiple times per year

BOPIS gives consumers flex and control, as online purchases can be picked up in store, at their convenience. The time-consuming search for goods on site is reduced, while hands-on ‘inspection’ is central to the experience. BOPIS often comes with the option of instant in-store returns. Potential shipping costs can be avoided too. Together, these have made it a business model of choice.

The pandemic has also boosted the relevance of BOPIS, as customers are either banned from shopping in person or focused on avoiding contacts. According to a Shopify study, 64% of pre-pandemic BOPIS shoppers use the service more than before the ‘new normal’.

Almost half of the TOP 500 merchants already offer BOPIS

At first glance, there are lots of benefits to BOPIS. These go to the merchant too, as delivery and packing costs are cut, while they can still meet the customer, face to face. However, some benefits come at retailers’ expense. BOPIS demands extra in-store storage, leaving some to re-invent their entire in-store setup.

Here’s an example

According to RetailWire, (quoting Corie Barry, CEO of Best Buy), the company is ‘shrinking its sales floor in four locations in Minneapolis from 27,000-square-feet to 15,000-square-feet in order to make more space for the staging and fulfilment of the newly popular services’. That’s almost half the floor plan! While Best Buy is experiencing big success, the ‘new normal’ is leaving some merchants struggling. It can be tough to adapt to the ultra-boosted omnichannel environment.

Some merchants are overwhelmed by handling ‘instant’ BOPIS orders. Customers tend to show up in store before their order has been processed.

While operational issues should not be underestimated, the biggest potential BOPIS headache for merchants is fraud. Fraudsters are recognizing the weakness of some retailers’ processes, taking advantage of the short time between order creation and pick up.

Make every minute count

BOPIS fuels the need for fast, accurate fraud management.

The lack of vital shopper information (like shipping address) and time sensitivity can leave fraud management spinning. Less data means less information for fraud engines, which are designed to assess risk automatically. Many large US retailers promise that BOPIS orders will be ready for pick up in 30 minutes or less. That’s great for the customer. But it also means there’s hardly any time left for fraud departments to manually check orders for abuse.

Fraudsters use this window to avoid such manual verification. This can lead to either tighter BOPIS fraud rule sets (and higher false positive rates) or climbing fraud levels. In peak seasons, this becomes a pain and a drain.

Should you care about BOPIS? You bet!

Studies indicate that (by 2024) at least 40% of all sales in the US will be generated via BOPIS. I see great opportunities for the European market too. Implemented in the right way, BOPIS bridges the gap between in-store and online sales, creating win-win scenarios the industry has been longing for. These stores don’t need to be turned into warehouses either: almost 50% of all shoppers make additional purchases in the store while picking up their BOPIS order (that calls for attractive floor plans!). However, retailers need to remain vigilant, especially for bogus orders conducted by criminals. By understanding these risks, they can reap the rewards.