Walmart and Target made the correct wager based on what customers want

Walmart and Target made the correct wager based on what customers want ...

People today shop differently than they did before, partly due to the way covid changed the world when it came in 2020.

Retailers vowed to remain steadfast in order to meet changing needs of customers who were under stay-at-home orders or, for safety reasons, avoided public places.

Curbside pickup evolved from a unique specialty service to a standard service offered by most major retailers, enabling customers to pay online in advance and simply stop by to pick up their purchases.

Home-delivery services such as Instacart, Doordash (DASH) - Get DoorDash Inc. Class A Report, and Shipt (TGT) - Get Target Corporation Reportalso made it possible to skip the drive altogether. A third party went to the store, recovered your order, and delivered it to your door. Although their initial popularity has dropped, they remain very popular.

Although many Americans have felt comfortable enough to put their masks off and return to the shops they used to shop at prepandemic, these services have shown no sign of going away. In fact, they have become a part of our daily lives.

New research from a Harvard university reveals how much we've grown to depend on the conveniences of "Buy Online, Pick Up In Store," or Bopis.

Target is a term used to refer to the size of a target.

Convenience has become a requirement.

Before and after a competitor introduced Bopis services, Harvard studied 49 million online and in-store transactions from a national retail chain.

TheStreet Recommends This Post

Dunkin' and Starbucks Are Making a Play for a New Market

Cannabis sales may be something surprising in the recession.

Three Must-Know Ways to Assess Volatility

According to the study, the company that did not offer Bopis lost 4.7 percent of online sales and 1.8 percent of in-store sales.

The study also found that the decline in the category was greater if the competitor in question was closer. This suggested that customers choose stores that would enable them to buy online and pick up their goods rather than those that did not.

If Bopis was offered in stores, Harvard found that higher-ticket items fell in favor of nearby competitors. This showed that shoppers were more willing to purchase more expensive items as long as the handling of picking them up (or returning them) was effortless.

For this exact reason, stores like Target (TGT) - Get Target Corporation Report have leaned even further into the Bopis methodology. The Minneapolis retail giant also expanded the number of drive-up parking spaces at its stores and announced in February that it would also offer returns and Starbucks (SBUX) - Get Starbucks Corporation Report drink delivery for customers driving until pick up orders.

Yes, it's convenient.However, it costs money.

Bopis' services come at a cost to the business. The store must employ additional employees, maintain adequate inventory management software, and provide parking space for customers who use the service.

According to the statistics, retailers will be forced to modify and add Bopis to their omnichannel retail strategies or lose out on sales. Bopis is still used by two-thirds of customers as of 2022, many of whom chose to use it in order to avoid shipping costs.

Despite all of this, Harvard says Bopis isn't as beneficial to the consumer as it might appear (although the shop still benefits).

"Almost half of consumers who have used Bopis say they have made additional unplanned in-store purchases when picking up an order placed online, which is one of the major reasons that traditional, in-store shopping is advantageous to retailers," according to the Harvard Business Review.

You may also like: