Apr 03, 2015I'm a scientist, so I like to experiment. To see how "buy online pickup in store" (BOPIS) works—or doesn't work—I went to several retailers' websites and chose products I know they carry in local stores. When the sites told me the stores didn't have the items in stock, I went to the stores to see for myself. Most often, the items were on the store shelves. If you're curious about this phenomenon, try the experiment where you live. I bet you'll find the results replicated.
Why would a retailer show you a product is unavailable for pickup when it is actually in the store? There are a couple of reasons, and they represent an old-school mentality and way of conducting business.
One reason I often hear is: "We want to make sure we have the product available for our in-store customers to buy." Sorry retailers, but in this age of omnichannel shopping, it's not smart to separate customers into channels, such as online customers and in-store customers. If your aim is to sell a product, why give preference to a potential in-store customer over an actual omnichannel customer?
A second, usually unspoken reason is: Retailers don't have much confidence in their inventory accuracy. To compensate, they build in a buffer when showing inventory counts. A retailer, for example, might have a business rule that says: "If inventory at the store shows fewer than three items in stock, show it as out of stock online."
One retailer recently told me it uses a buffer of nine items. I have to admit I was astounded. But like most retailers, this company doesn't want to get it wrong by sending an online customer to a store to pick up an item that's unavailable. That scenario would embarrass the retailer, and it's quite possible the unhappy customer would never patronize the company again, either online or in-store. The retailer would rather tell you the product is out of stock and disappoint you in this one sale than upset you by sending you to the store erroneously.
For BOPIS to work, retailers must adopt RFID, which provides high inventory accuracy and the ability—and confidence—to provide a rewarding omnichannel experience for customers. And so I ask retailers: Do you want to tell your customers you are out of stock when you have three or more items—or do you want to make a sale and drive additional traffic to the store (where almost 40 percent of BOPIS customers will make an unplanned purchase)? The answer seems clear.
Bill Hardgrave is the dean of Auburn University's Harbert College of Business and the founder of the RFID Research Center. He will address other RFID adoption and business case issues in this column. Send your questions to hardgrave@auburn.edu. Follow him on twitter at @bhardgrave.