How to launch in-store pickup that goes beyond 'grab and go'

In-store pickup is fast becoming an expectation among consumers: More than three quarters (78%) say they want to be able to order merchandise online and pick it up at a physical store location, according to research from the CFI Group.

Many of the nation’s leading retailers, including Target, Home Depot, Macy’s, and Nordstrom have embraced the fulfillment option, allowing customers to browse online at any time of day or night and pick up purchases when and where they want. Home Depot estimates that one-third of its online orders are picked up in-store.

But other retailers see in-store pickup as too burdensome to implement, thinking that it requires complicated systems to track inventory and orders.

“A lot of retailers are hesitating on in-store pickup because they think you need to have access to the entire inventory, so you can tell the customer with 100% accuracy whether you have the products in stock, in that store,” Gregg Aamoth told Retail Dive.

But Aamoth, CEO of POPcodes, a retail solution focused on online to in-store fulfillment, and former vice president of Customer and Marketing Systems for Macy’s, says that in-store pickup doesn’t have to be complicated to satisfy its main goal.

Driving sales, online and in-store

So what exactly is this main goal? According to Aamoth, its getting the customer to fulfill an online order efficiently, while bringing them to a physical location where they can shop for additional items and drive incremental sales in both channels. Ace Hardware, for example, claims to have seen an average lift of 18% to 20% in e-commerce sales since installing in-store pickup.

Many store locations keep multiple units of certain items in stock, Aamoth says. Rather than installing a system that purports to tell you exactly what’s in stock (and is probably out-of-date anyway), he advises building an in-store pickup service with the items stores regularly keep in quantity, avoiding the need for a complicated inventory management system or the hassles of in-store holds.

“If you treat every purchase like it’s a grab-and-go model—where you pull it off the shelves and hold it behind the counter—it can become a burden,” Aamoth says. “Keep it simple—focus on the customer dialog, and differentiate between high-quantity items and low-quantity items.

“The goal is to drive traffic to the store,” he says. “Retailers invest so much in merchandising a product, and then take it out of that space and put it in a storage shelf. Not only does it take inventory out of circulation and take time to do, it brings the customer out of the environment where you want them to buy more products.”

In-store pickup can pay for itself

In-store pickup offers the advantage of being faster and cheaper than shipping, especially with new rates based on package size in effect at UPS and FedEx. “The customer wants the product sooner than you can get it to them, and they don’t want to pay you to ship them,” Aamoth says.

Retailers can incentivize in-store pickup with loss leaders and money-off offers, and still save money on shipping. Stores can also predict demand when customers order online. And best of all, online orders ask the customer to disclose information they wouldn’t offer when shopping in stores, making it easy to prepare custom offers and upsells.

“You have their contact information as part of the normal purchase process,” Aamoth says. “If you ask them in-store for their email and address, they wouldn’t give them to you, but online, it’s normal. If 30% of your customers are buying online and picking up in-store, you already know who 30% of your customers are.”

Empowering a relationship

The information customers share online can be used to empower sales associates and build relationships.

“Right now, a lot of the in-store pickup models make the associate accountable for authenticating who the customer is,” Aamoth says. “Don’t make your associates into cops. Just work to give them a good experience when they get there.”

Make initial redemption easy, and customers will be free to continue shopping if they feel inclined to do so.

“Some are grab-and-go customers, and some are looking for a deal. Some are actually looking for more service,” Aamoth says. “If I shop online for a camera, I don’t want that camera just to be waiting on the doorstep. Show me how it works; tell me that there are two critical accessories it needs when I get there.

“The main objective is to start the process online,” Aamoth adds. “About 95% percent of transactions still take place in stores. The goal is to get customers as far down that path to purchase while they are online, so you have a level of confidence that they will come to your store to complete the purchase.”