Will Buy-Online, Ship-to-Store Biz Model Save the Holiday Season?

Brick-and-mortar stores have a lot to celebrate this holiday season, even as online sales are forecast to grow. Despite the traditional divide between in-store and online shopping, a number of retailers are looking to blur these lines to increase overall revenue, according to a new report by commercial real estate firm CBRE.

Retailers such as Macy’s and Kohl’s are introducing a new shopping program in time for the holidays: buy-online/ship-to-store (BOSS). This is a variation of the well-established model of buy-online/pickup-in-store (BOPS) that allows a customer to have an item shipped to their local store if it isn’t currently in stock. Not only does this allow firms to offer a larger range of inventory without carrying additional stock onsite, but it also bypasses the delivery costs attached to shipping the product direct to the customer’s address.

And online customers are opting in. BOPS has already proven successful, with Home Depot reporting that 47 percent of its online orders are picked up in store and Zara reporting nearly a third. Combined with BOSS, the programs are expected to account for much of e-commerce holiday sales. In fact, Michaels predicted that nearly half of its holiday purchases will be made online, and Kohl’s is similarly convinced, with plans to roll out BOSS to all its locations within the next few months.

Getting customers into stores also generates “attachment sales,” which are the additional purchases shoppers make when they enter a store for pick-up. For Kohl’s, this means up to an additional 25 percent in sales, according to the CBRE report.

With that kind of money on the table for in-store purchases, multiple companies are also choosing to launch festive pop-ups. Facebook debuted temporary shops across nine Macy’s doors on Monday morning, while Wayfair is launching its first pop-up in time for the holidays. Such limited stores are proving particularly popular with e-tailers and non-traditional retail brands, due to the minimal real estate commitment.

E-commerce is expected to account for 12.5 percent of total retail sales, up from 11.2 percent in 2017, yet the value of brick-and-mortar on these sales — and vice versa — is still only just beginning to be understood.

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