Retailers are increasingly looking to cut costs, become more efficient, and meet ever-changing consumer demands. But how can they do so? The answer is updating their fulfillment strategy to keep pace with evolving customer expectations. As e-commerce continues to dominate the retail space and same-day delivery has become the norm, retailers must look to strengthen their “buy online pick up in store” (BOPIS) and microfulfillment strategies to stay ahead.
BOPIS allows customers to order online and pick up items at the retailers' brick-and-mortar location, and microfulfillment involves housing a retailer’s products closer to the consumer to improve delivery times. While these strategies each serve different purposes, both are centered around getting the product closer to the consumer to ensure faster fulfillment. By combining the two, retailers will be primed to meet customers’ needs—now and in the future.
The store of the future: meeting customers where they are
While e-commerce has become the top way for many consumers to shop today, building the store of the future does not mean focusing solely on an online fulfillment strategy and abandoning physical stores entirely. Instead, retailers can take advantage of their brick-and-mortar locations, often already situated in “hot spot” areas, to support microfulfillment efforts for e-commerce. These locations can also cater to the growing demand for BOPIS options, with 61% of consumers choosing to shop with a retailer that offers BOPIS over one that does not, according to recent Körber Supply Chain Software research.
When developing a fulfillment strategy, retailers should look to be able to satisfy customer needs at any moment in time. With the surge in same- or next-day shipping, consumers are no longer as interested in walking around a store to locate products or waiting many days for their items to arrive. Whether it’s on their doorstep or at the storefront, customers want their products as quickly as possible. For example, Körber Supply Chain Software found 29% of BOPIS shoppers would like their products to be ready almost immediately or within 30 minutes after placing an order.
Shoppers know which retailers can satisfy their need for quick fulfillment and will likely gravitate towards those companies for their shopping needs. For example, I recently placed a BOPIS order with a retailer, and when I arrived later that afternoon, my order still had not been picked yet. The retailer let me know that though I was currently there, based on their picking process, there were still multiple orders ahead of mine. While we both saw the product on the shelf, they were unable to fulfill my order given the inefficient process, prompting me to question whether I would continue to be loyal to that retailer.
To be successful, the store of the future must leverage technology to make the physical store a powerhouse for BOPIS and microfulfillment. By leveraging tools that provide insights on inventory location and consumer demand, companies can make informed decisions on the best approach for seamless fulfillment. So, how can companies get started with future-proofing their storesHow to develop a winning hybrid-fulfillment strategy
While meeting consumer demand is top of mind for retailers, operational efficiency and cost reduction are also priorities. It is not enough to just deploy BOPIS and microfulfillment; companies must focus on finetuning these strategies to maximize success. Some ways to do so include:
1. Utilize the “only handle it once” (OHIO) method: In a warehouse environment, companies keep a close eye on how much it costs to touch a product before they sell it. Typically, it is most cost-effective and efficient for companies to only handle it once. A similar consideration should be used for fulfilling orders through BOPIS or microfulfillment. For a BOPIS order, this might mean the product goes directly from the backroom of a store to a customer instead of being stocked on the shelf. For microfulfillment, this might mean going from a microfulfillment site directly to the consumers’ door.
2. Deploy solutions for inventory visibility, management, and communication: To successfully fulfill both online and in-person orders, retailers must have full visibility into the inventory within their warehouses and store locations and across the supply chain. From a BOPIS perspective, stores may be competing with in-person shoppers for the same items on the shelf. Therefore, it is key for retailers to fully develop their backroom inventory strategy, which may mean keeping some inventory off the shelves. While it is important for shoppers in store to have access to the full breadth and depth of assortment, it is also important that shoppers who buy online can get their order fulfilled.
Some retailers have already started operating like the store of the future. Reformation, a sustainable clothing store, has deployed an innovative retail concept at their Boston location where they only showcase one of each garment. If a customer wants to try on an item, they use a tablet to request their size, and a sales associate retrieves the item from the store’s large backroom and brings it directly to the customer’s dressing room. BOPIS could be added to this arrangement, so that customers shopping in the store will have their needs met and customers shopping from home can ensure they will not receive a late order cancellation or delayed fulfillment.
Furthermore, having full visibility into inventory at physical stores can be leveraged on the microfulfillment side as well. Given that brick-and-mortar stores are strategically placed in areas where there is high consumer demand, their backrooms can also function as fulfillment centers for online orders, ensuring that the product gets into the customer’s hands as quickly as possible.
3. Continually analyze fulfillment strategy and fine-tune operations: Consumer demand is always evolving, making it difficult to predict what will be the next shift in expectations. Given this, it is critical for retailers to continually collect and analyze data, such as stock keeping unit (SKU) velocity, to ensure that they have an effective strategy.
With the demand for faster fulfillment, retailers will need to utilize this data to fine-tune their operations and ensure they are able to access the necessary products. To do so, retailers must examine backroom operations to make sure stocking items can readily be picked and staged for pickup. This approach also makes it possible, and easier, for retailers to ship direct to the consumer if they want to provide that option.
Looking ahead: hybrid fulfillment strategies in 2025 and beyond
As we head into 2025, companies are going to increasingly focus on how they serve their customers and ways to stand out among their competitors. If they have not done so already, many major retailers will utilize both BOPIS and microfulfillment to effectively and efficiently meet customers where they are. Looking ahead, customers will continue to demand faster fulfillment and more convenient ways to shop, making it critical for companies to fine-tune their BOPIS and microfulfillment strategies to avoid falling behind. By utilizing the above tips, decision-makers will have the insights they need to properly stock their stores and microfulfillment centers and meet customer needs.
