A Playbook to Store Design Driven by The Package Journey
By Melissa Gonzalez, CEO of The Lionesque Group and Principal at MG2
August 24, 2020
It’s no mystery that one of the largest takeaways from COVID-19 is the growth of curbside pickup and buy online pick-up in-store (BOPIS). Businesses ranging across verticals from specialty retail to big-box retailers are offering the option and consumers are embracing it as evidenced with the latest Target earnings, where same-day services increased by 278 percent and drive up units were higher in Q1 than all of 2019. Additionally, of the millions of guests who used their Drive Up service, 40 percent were new to the service. With such a dramatic increase in adoption, stores can no longer just analyze the customer journey when thinking about store design. The journey of the package itself, its dwell time and conversion rate, will be an important input towards analyzing layout optimization.
According to a recent RSR study, 42 percent of U.S. retailers surveyed think BOPIS will drive 11 percent to 40 percent of their revenue in the next three years, while 26 percent think it will generate 40 percent to 65 percent and 25 percent think BOPIS will drive 65 percent or more of their revenue. Factors driving demand, outside of COVID, gives us conviction this is a longer-term shift and permanent factor when thinking about store formats and design. The practice of BOPIS as an offering has grown as customers have become continuously too busy to browse items in-store and want more optionality as to how they shop. Most view BOPIS or order ahead as a way to get their items faster than waiting for online delivery, a way to ensure an item of interest in available in-store if one is going to make an effort to pick it up or is a solution to one’s style of being a last minute shopper and need the option of same day pick-up.
BOPIS alone isn’t shifting the need of the package journey, however, as buy online, return in store (also known as BORIS) continues to gain traction as well. Three of four consumers list the returns experience as the worst part of shopping online, according to research conducted by Forrester and Happy Returns, and 87 percent say they won’t shop again with a retailer after a bad returns experience. Efficient in-store returns are a key way to encourage repeat purchases and get money back into a consumer’s hands quickly, as new models for in-person returns at third-party store networks show. Consistent evidence also shows that seamless, in-person returns motivate customers to reinvest those dollars before walking back out, particularly when coupons are offered. One Happy Returns partner recently discovered that Happy Returns’ service directly increased existing customer spend 3.2 percent and acquired new customers that spend 20.5 percent more—while increasing store sales 6.3 percent and online revenue 16.8 percent.
With a post-COVID era of shopping approaching, there is a huge opportunity for retailers to shift their space designs to capitalize on what isn’t a trend, but a full-scale lifestyle change in how consumers will be purchasing from and interacting with brands. But where to begin?
Companies should start by adopting lessons learned from the package journey. Spaces should remain flexible, allowing layouts to ebb and flow as customer volume inevitably increase and decrease with phased reopening procedures. By modularly designing their layouts, brands have flexibility to bulk up merchandising for holidays and events, and iterate during slower periods so shifting focus to product launches, pop-in shops, or demo events floors aren’t sparse
Creative modularity also allows for expansion or abridgment of processing stations for product intake, optimizing package dwell time, or how long a package sits on the floor. And, companies can easily rearrange and use valuable floor space when customers aren’t on-site to more efficiently process, pack, unpack, or reallocate merchandise, saving both time and money. This expands further and translates into the purchase-for-pickup experience, allowing more brands to create dedicated spaces for effective queue management, and technologically optimizing for package tracking, customer, and staff notifications.
Finally, we return to the underestimated aspect of handling returns. “No shopper enjoys the arts and crafts project involved in printing labels and packaging boxes,” says David Sobie, co-founder and CEO of Happy Returns, “When given the option, online shoppers love returning in-perso—provided the experience is fast, easy, and free. The key today is making the experience box, label, and contact-free.”
Through modular optimization of their brick-and-mortar spaces, brands and retailers have the opportunity to enhance not only the processing and adding of returns back into the supply stream for resale, but the additional freedom to efficiently separate the experience from new order pickups. By treating returns as their own service, brands ensure improved wait times, better customer service, the optimized flow of packages both in and out of their stores, and of course, happier, brand-loyal consumers. It’s no longer a conversation about the customer journey alone when planning store design, as it also requires a closer look at the package journey in order to create a superior customer experience.
Article was originally published here.