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In-Store Pickup: Offer a Retail Discount or Not?

This is an archived post from OrderDynamics, now Tecsys retail division.
In-Store Pickup: To Offer a Retail Discount or Not? For the most part, consumers have heard of click and collect, or buy online pickup in-store (BOPIS). They may know it as ‘Grab & Go’, the Pickup option, or some other catchy term. Whatever the title, by now most shoppers understand the concept. That being the case, there isn’t a compelling need to educate shoppers about it too strongly. In a yet unpublished OrderDynamics & Clearly Research study – we found that among North American online shoppers, 47% had tried an in-store pickup service over the past 12 months (n=1470). So, it is out there, and after the past holiday season, it is hard to imagine a shopper who does not know about it.

Yet, In-Store Pickup is Still New 

Even for sophisticated markets like the UK, click and collect shopping is still an innovation phase. Yes, the concept has been around in retail for well over a decade. However, for most customers, it is still a new-ish offering. Beyond a few very select, advanced markets like the UK, in-store pickup is a novel offering.

Plenty of Value Without Discounting

Given the relative newness for most markets, discounting is simply not an ideal path. In the early stage there is an innovation effect that entices people to try new things. There are some ‘bragging rights’ that a shopper might feel in trying out an in-store pickup when most of their friends have not. Also, this is a service that is helping your shoppers. It caters to their desire to fulfill that need for instant gratification. They see what they want online, and DON’T have the patience to wait for delivery. Were that not enough, let’s not forget about all our friends who live in apartments and condominium complexes. Yes, some complexes have deliver rooms. But many, do not. Which makes delivery a greater hassle than it is a convenience. With in-store pickup control is in the customer's hands. They choose where they will collect their purchase, and they choose when they will get it. Bonus to your brand if you are already offering this option!    

To Discount of Not

So, to the core question. As a retailer offering omni-channel services for the first time, you will definitely want to advertise the new service. Put it on your ecommerce site prominently. Be up-front about it. Tell your customers they have a creative new way to get their goods. Make it easy and convenient. Then make sure in-store pickup location is as easy to find as it is on your website. In-store pickup spots should be near the front, well advertised (signage it important), and very very convenient your customer a quick collection. Whatever you do, make sure they don’t need to lineup behind the gentleman with 20 questions about whatever they are buying. That will completely erode the quick and convenient value proposition. If you do decide that this is not enough, then OK provide an incentive for your customer to try out the in-store pickup option. Make sure it is a limited time offer. Then stick to your principles, and don’t extend the offer, until you have another special promotional period. It is so easy to become addicted to discount offers. Although it may induce more customer to try click and collect from your brand, it may also train your customers to expect it. That is brand and margin eroding behavior, which you don't want to propagate. Ultimately, there is a solid innovation effect, and good additional value provided to shoppers from in-store pickup services. Most retailers should not have to resort to discounting. If you do take this path, do it sparingly.   Author: Charles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.       Related:       
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