Why Consumers and Retailers Like Site-to-Store Pick-Up

By Tim Wilson

Many online retailers today offer some type of site-to-store option, such as in-store pickup from store inventory, ship-to-store or a combination of the two. As a result, now is a great time to look at what site functionality and enhancements retailers should consider leveraging when it comes to site-to-store options. What strategy changes would better engage consumers, and why should you spend scarce dollars on these options?

If The Compete Online Shopper Intelligence report published in the fourth quarter of 2009 is any indication, investments in site-to-store to date have yielded good adoption rates and results. We learned the following, which served as the basis for the report:

92 percent of online shoppers are aware of site-to-store features;
more than half of online shoppers said they used the feature at  least "occasionally";
44 percent said they'd purchase more online with in-store pickup as an option; and
80 percent rated their experience with site-to-store as  "good/excellent."

There's still room for improvement — only one quarter of online shoppers use site-to-store "often" –— but retailers already doing site-to-store are succeeding. A key reason is because their customers are letting them know what's important when it comes to this option, and retailers are listening.

Why Customers  Use Site-to-Store
First and foremost, they want to save money. As the chart to the right shows, 75 percent of folks who chose site-to-store options did so because it was cheaper than paying shipping costs. The next most popular reason? Instant gratification. Forty percent of respondents to our survey said they used the option because they "wanted the product immediately."

Simply put, site-to-store is a win-win for customers. It saves them money and provides the "now" factor — both of which increase customer satisfaction. Retailers also get the opportunity to make customers happy, convert incremental customers and increase basket size. In the Compete report, for example, 23 percent of customers who used a retailer's site-to-store option said they purchased more items while in the store.

Doing Site-to-Store Right
"OK, great," you say. You have some functionality today and are considering building your site-to-store options out, but what can you learn from what customers are saying about site-to-store to understand the best ways to implement it? Here are five key things to keep in mind:

1. Tell shoppers how close you are. Distance from a store impacts use of site-to-store features. As the chart to the right shows, 100 percent of shoppers surveyed by Compete said they'd pick up in-store if the nearest location was less than a mile away. Add functionality that enables consumers to auto-calculate the closest store from their shopping carts. If your stores aren't within 10 miles of a large proportion of your customers, site-to-store may not be worth the investment.

2. Do it quickly or don't bother. Time is of the essence when it comes to in-store pickup. Almost half of shoppers surveyed were willing to use site-to-store if they could pick up merchandise in less than two hours, as the chart on the previous page shows. More than two-thirds would use it if their merchandise was available in under one hour.

3. Remember that in-store shoppers are digital too. Just because someone shops at your store doesn't mean they're not online and don't want increased flexibility. Site-to-store remains a slightly more appealing option to in-store shoppers than online shoppers:

53 percent of in-store shoppers said they would consider using  site-to-store; and
44 percent of online shoppers would consider using site-to-store.

4. Target the right demographics. Age plays a role in the use of site-to-store, so keep demographics in mind. Younger shoppers are "more likely" or "somewhat likely" to use site-to-store, for example. The breakdown is as follows:

60 percent of 18-34 year-olds;
49 percent of 35-44 year-olds; and
40 percent of 40 year-olds and older.

5. Site-to-store can save both consumers and retailers money. Retailers often think of free ship-to-store as an increased acquisition cost, but compared to free/discounted shipping promotions, site-to-store may actually lower costs.

Yes, site-to-store functionality can lead to a vast improvement in customer satisfaction. But the promotion, functionality and logistics of site-to-store options all need to be done correctly or it just won't work.

So, let the right consumers know it exists and how close your stores are to them, and get their merchandise ready for pickup quickly. By doing this, you can drastically improve customer satisfaction and, as a result, your bottom line.

Tim Wilson is the director of retail & consumer products at Compete, Inc., a Boston-based online market research firm (twilson@compete.com).