Brick & mortar borrowed this from online retail and increased revenue by 5.1%
Brick and mortar has learned a thing or two from online retail, and last December shoppers took a meaningful notice.
By focusing on and improving their buying online and picking up in-store (BOPIS, also called “click and collect”) offerings, retailers experienced a never-before-seen surge in shoppers using the service.
Retailers saw the strongest holiday sales growth in six years, with revenue increasing 5.1% to more than $850 billion this year, according to Mastercard Spending Pulse.
Online shopping also saw large gains of 19.1% compared to 2017. And established brands were a significant part of that good news: Walmart, Kohl’s and Macy’s reported healthy sales and saw stock gains.
Giving shoppers anytime access to goods pays off
By offering true 24/7 access to goods, retailers were able to provide what customers wanted at a time that was convenient for them to shop.
For those who wanted to do some thoughtful shopping but were short on time during regular business hours, being able to browse selections from the comfort of a sofa or bed, pay and pick them up when convenient added some much-appreciated stress relief during what can be a very busy season.
“By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Inc., in a release.
And Frank Layo, managing director at Kurt Salmon, part of Accenture Strategy, told CNBC in an interview that the top five “click and collect” or BOPIS retailers were Bed Bath & Beyond, Best Buy, Kohl’s, Target and the Home Depot.
BOPIS was up 47% this holiday season compared with last year, according to analyst reports.
For example, Target reported that it expected order pickup volume would triple this holiday season compared with last year’s.
Incremental sales increase from wider product offerings
During the past few seasons, brick-and-mortar retailers have worried about being bested by their e-commerce competitors and for good reason.
Online stores are conveniently open around the clock, offer a level of personalization and can provide an inventory with variety that couldn’t be accommodated with the footprint of any department store.
Click and collect changes the game, however.
Many stores now let shoppers view inventory in stock, allowing them to place an order that is ready for pick up within a couple of hours.
But they also feature the ability to shop from a wider variety and have that item shipped to the store for pickup. The shopper saves on delivery charges, can see the product before accepting it and is able to take advantage of a wider selection than is offered on the retail floor.
And the stores benefit from incremental sales at pickup too. For example, Kohl’s reports an average attachment rate of 20% to 25% for additional in-store purchases.
Retailers this past holiday season seem to have taken the adage, “Nothing ever changes if nothing ever changes” to heart.