BOPIS May Drive RFID Adoption in Retail

"Buy online, pick up in store" is becoming increasingly popular around the world, but it's placing greater demands on retailers to have accurate, near-real-time data.
Published: April 28, 2019

More and more retailers are offering customers the option of buying items online and picking them up at stores. This is known as BOPIS (or BOPUS) in the United States and “click and collect” in Europe and elsewhere. According to data published by CommonSense Robotics, the number of locations offering BOPIS nearly doubled among leading U.S. grocery retailers in January 2019 to 5,800 stores, from 2,451 the previous January. And a February 2019 Periscope By McKinsey study found that 78 percent of U.S. consumers polled would definitely or probably buy items online and pick them up in stores.

The problem for retailers is that as they merge their online and store channels, the need for accurate, near-real-time inventory increases dramatically. Retailers cannot disappoint shoppers by not having products when customers go to pick them up.

Some retailers try to avoid this problem by hiding inventory from online customers. If they don’t have at least three or four units of a product available at a customer’s local store location, then they don’t show the customer that item, simply because they lack confidence in the accuracy of their inventory. Maybe there is only one unit and it will be sold before it’s picked for the online customer. The problem with this is that the retailer loses sales.

Some retailers are now realizing how bad their inventory accuracy is, as they receive complaints from customers who arrive to pick up items, only to be told, “I’m sorry, we don’t have that in stock.” The retailer ends up having to ship the goods to the customer, which reduces the margin on that sale and leaves the customer unhappy about having wasted a trip to the store and then having to wait for the product to arrive.

Dr. Bill Hardgrave, Auburn University‘s provost and senior VP of academic affairs, and the world’s foremost expert on the use of radio frequency identification in retail, will present data at RFID Journal LIVE! Retail @ RetailX regarding the execution of BOPIS orders. Hardgrave told me that retailers are struggling to find every item ordered by the time a customer arrives at their store, and Auburn’s RFID Lab has conducted research into how serious the problem is.

As BOPIS increases in popularity, and as more retailers start shipping items from stores, promising same-day delivery, inventory issues will become even more serious. I think this will be the thing that pushes retailers to adopt RFID on a mass scale. You simply cannot execute a true single-channel strategy without knowing precisely what you have in inventory and where it is located in near-real time.

Or maybe retailers will just continue to hide inventory from customers. Which strategy do you think will win in the marketplace?

Mark Roberti is the founder and editor of RFID Journal.