The Acceleration Of In-store And Curbside Pickup And The Risks That Come With Them

When Walmart, Target, Dick’s Sporting Goods and Best Buy announce that they will close on Thanksgiving, rather than invite customers in to get a jump on their traditional Black Friday shopping, you know we’re headed into a holiday shopping season like no other.

Sure, everyone has talked about how holiday 2020 will be like none we’ve seen in our lifetimes, but isn’t that true of nearly everything in 2020?

The important thing for retailers to understand is how holiday shopping in 2020 will be different and how they can best serve customers and protect their businesses as the coronavirus pandemic’s upheaval presents both opportunities and challenges.

Put simply, the ongoing pandemic has acted as a great accelerator, propelling retail’s digital transformation forward. Signifyd has seen it in our data since the pandemic began, starting with a dramatic increase in online orders.

The combination of non-essential store closings, shelter-at-home orders and some consumers’ anxiety about shopping in brick-and-mortar stores ignited a dramatic increase in ecommerce sales.

Early in the pandemic, overall ecommerce sales were tracking at 85% higher than they were before the pandemic, according to Signifyd’s Ecommerce Pulse data. Some commerce verticals saw much higher gains. For instance, Commodities & Collectibles, a category that includes gold bars, saw sales in mid-March that were 165% higher than pre-pandemic figures.

And while the short-term fluctuations moderated as non-essential stores reopened and consumers settled into new pandemic-era routines, the more telling year-over-year ecommerce gains remained impressive, even more than three months into the pandemic. Online spending in June 2020, for instance, was 102% higher than June 2019, Signifyd’s data shows.

COVID-19, then, created something of a second holiday shopping season for ecommerce — in terms of volume, logistical complications and stress. The good news regarding actual holiday season 2020 is that unlike the pandemic, retailers have time to plan for the real thing.

So, let’s take a look at just what the acceleration of retail’s transformation means, as we move into the holiday season.

It’s not just what shoppers are buying, it’s how they’re buying it

Not only are people buying more online during the pandemic, the way they are buying is changing too. With non-essential stores closed for months and with a significant number of consumers hesitant to spend time in stores even once they opened, consumers in historic numbers have turned to various forms of buy-online-pick-up-in-store.

Signifyd data showed a breathtaking increase in orders involving online purchases picked up in the store or at the store’s curbside. Within a month of the pandemic’s official start, BOPIS orders on Signifyd’s Commerce Network had increased by more than 450%. The number of buy online pick up at the curb or in the store orders declined from that early pandemic peak, but even four months into the pandemic, with many non-essential stores open again, BOPIS orders were still 275% higher than their pre-pandemic level.

There is ample evidence that consumers’ enthusiastic embrace of BOPIS will outlive the coronavirus. Half of consumers have turned to BOPIS because of COVID-19, the National Retail Foundation reports. The finding was part of an April poll that also found that 25% of consumers have relied on BOPIS more than once and that 90% who had tried BOPIS found the service convenient.

In fact, a May survey by Shopkick, a shopping rewards app, found that nearly 70% of respondents said they would turn to buy online pick up at store options when they were available. When asked specifically about curbside pickup, 42% of those who started using curbside pickup in the pandemic told Accenture they’d continue the practice once the pandemic had passed, according to Digital Commerce 360.

BOPIS is the answer, but it doesn’t mean it’s an easy answer

The truth is enterprise retailers have long understood the importance of BOPIS. In a Signifyd survey of enterprise retailers published in 2019, 44% of respondents said BOPIS was a business imperative, either to gain an edge on Amazon or to keep up with competitors in general.

What was true in 2019 is doubly true in 2020. But that doesn’t make BOPIS any easier for merchants working to implement it. Doing BOPIS right requires flawless inventory visibility. It means training staff to handle a new kind of order.

Adding a curbside pickup option, which has proven critical during the pandemic, means finding dedicated space in the store to hold orders, configuring parking lots and calculating how many employees — and what kind — you need to run the program.

BOPIS and curbside both require new ways of communicating with customers about when an order is ready, when an item is actually out-of-stock and what they should do to pick up their orders.

Moreover, in-store and at-the-curb pickup both introduce novel fraud risk. Holiday time is already among the most challenging for fraud protection and risk management. The nature of gift buying means that a retailer will see a significant number of new customers. Great to see them, but merchants have no order history to help them understand whether that new customer is legitimate or a fraudster.

The holiday also means orders that have a mismatch between billing and delivery address, as shoppers send gifts to loved ones. In fact, holiday shopping means the same credit card account will make purchases that are being sent to several different addresses. Shoppers may buy more expensive items than they have in the past and what they buy might appear to be out of the ordinary for that particular consumer.

Now add BOPIS and BOPAC into the mix.

Consider first of all that BOPIS and BOPAC orders need to be fulfilled quickly — within no more than two or three hours — or the option loses its appeal for consumers. The orders are made online, meaning they are card-not-present transactions, which like any ecommerce order, shifts the liability for fraud to the retailer.

Order-on-line, pick-up-in-store orders come with no delivery address, which means retailers can’t match delivery and billing addresses — and it means a number of other identifiers are not available to the merchant filling the order.

How to do holiday BOPIS and BOPAC right

All of which means, as retailers, you must be thoughtful as you roll out BOPIS programs. A few key steps that will go a long way:

Train your associates: This is a new program that needs new ways of thinking and working. Some retailers might want a dedicated BOPIS team. Others are more likely to have associates splitting duties between BOPIS and traditional in-store responsibilities. Just make sure someone is responsible for ensuring that BOPIS runs smoothly and is adequately staffed.

Combine your online and in-store order management and inventory systems:You need to know exactly what products you have in stock, where they are and when they’ve been purchased by an online shopper.

Follow best practices when it comes to risk management: Consider a customer’s order history. Have you seen this customer before? Has he or she previously ordered online? Has he or she used BOPIS before? Have orders from the same customer come in unusually quickly or in unusually high numbers — even at other stores under your brand? Without a delivery address, turn to other data points, such as the device used for the order, the proximity of the IP address to the store, corroborating information on social media. Oh, and, speed matters. Design systems that can protect you from fraud while still delivering the customer experience your shoppers expect.

Consider order automation and dynamic fraud protection systems: Consumers turn to curbside and in-store pickup for convenience and speed. Pick-up orders should be filled in no more than two to three hours. Signifyd works with retailers to manage fraud. We’ve seen how rapidly filling online orders that come without key buyer identifiers, like a delivery address, opens them up to fraud and how automated systems help.

Be thoughtful about identification requirements for pickup: This is a delicate balance but one that must be thought through carefully. Will you require a driver’s license or other form of photo ID for pick-up? Will an order-confirmation email be enough? Can you incorporate identification verification into your app or website so that you know not only that a BOPIS customer has arrived at the store, but also that it’s the rightful customer? Will you allow an order to be picked up by someone other than the customer who made the order? There aren’t right or wrong answers. The trick is to provide the security you need for your business while not degrading the customer experience. Remember BOPIS and BOPAC are about convenience — and lately about health and safety.

We can certainly stipulate that holiday 2020 is going to be unique. And it’s true that the season is approaching with a good bit of uncertainty. But with some strategizing, ecommerce retailers can put themselves in the best position to find success despite the disruption.

Interested in learning more about 2020 holiday trends and tools? Download our free e-book here!

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