US retailers taking advantage of e-commerce to draw customers into stores



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Logistics US retailers taking advantage of e-commerce to draw customers into stores

Published on 20.11.2019 by Cathy Morrow Roberson, Founder & Head Analyst, Logistics Trends & Insights LLC, Roswell, GA 30076, USA

Estimates are for a jolly US holiday season, according to a number of groups. According to a Deloitte survey, holiday retail sales are forecast to increase 4.5% to 5%, exceeding $1.1 trillion. Meanwhile, global consulting firm AlixPartners expects holiday sales growth of 4.4% to 5.3%, while the National Retail Association (NRF) anticipates holiday sales to grow 3.8% to 4.2% over the 2019 holiday season.

The biggest driver of retail sales growth is e-commerce. The NRF expects e-commerce to grow between 11% and 14%, or in the range of $162.6 billion to $166.9 billion for the holiday season.

Indeed, representing about 10.5% of total US retail sales, e-commerce has redefined the retail industry. Amazon, eBay, Etsy and Wish are among the leading e-commerce providers in the US. But bricks-and-mortar retailers are fighting back, and their biggest weapon is their physical stores.

However, year-to-date, retailers have closed about 7,300 stores, more than any other full year according to accounting and consulting firm BDO. For some retailers, the need to scale back the number or the size of store is necessary in today’s environment, while for others such as Payless, Gymboree and Charlotte Russe, stores were part of liquidations due to bankruptcy.

Combining the online and the store in the form of buy online, pick up in store (BOPIS) has proven successful for many retailers. During the 2018 holiday season, Adobe Analytics found that there was a 47% adoption rate among retailers in terms of utilizing BOPIS.

Target and Walmart are considered the most popular retailers that offer BOPIS. A recent report by Coresight Research found that about 50% of consumers that use the service did so at Walmart and 34% did so at Target. But the list of retailers that offer BOPIS continues to grow, with recent announcements from Rue21, Nordstrom, Stein Mart and Banana Republic.

Financially, it is a benefit for retailers. This year, Salesforce expects those retailers that offer this service will see a 28% higher revenue share over the last five days of the holiday shipping season.

In addition, a Doodle survey found that 85% of shoppers have made an additional in-store purchase while picking up an online order, and 15% say that they do so “somewhat frequently.”

For consumers, the benefits of BOPIS include:

  1. Saving on shipping costs
  2. Speed
  3. Convenience

Buy online, return in store (BORIS) is also a growing trend among US retailers, with 42.1% offering the service versus the international average of 46.7%, according to a 2018 OrderDynamics survey of retailers in seven countries. The Amazon and Kohl’s partnership has proven quite successful for both companies. The relationship allows customers to return unpackaged items purchased on Amazon to any Kohl’s store in the US for free. Kohl’s noted that since offering this service, its shopper traffic to its stores has increased. inMarket data shows that shopper visits to Kohl’s stores rose nearly 24% in the three weeks after it started accepting Amazon returns compared to the previous three weeks, and that “micro” visits lasting under five minutes increased the most. Visits lasting longer than 16 minutes also rose by about 14%, indicating a potential sales lift for Kohl’s.

Expect more partnerships such as the one between Amazon and Kohl’s. The combination of e-commerce and bricks-and-mortar can be powerful when utilized in the best way. Plus it provides an additional option for the customer, which is always good.

Cathy Morrow Roberson, Founder & Head Analyst, Logistics Trends & Insights LLC, Roswell, GA 30076, USA

Cathy Morrow Roberson spent eleven years at UPS, primarily at the Supply Chain Solutions subsidiary, where she was responsible for competitive and market analysis, and assisted with M&A due diligence and new product development. In the final years, Cathy gained valuable experience in freight forwarding operations, working as part of a support team for a large UPS customer.

After UPS, Cathy worked for a UK-based logistics research firm for almost five years, and then struck out on her own by establishing Logistics Trends & Insights in 2015.

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