October 30, 2018

Approach avoids expensive last-mile delivery, tempts consumers with extra purchases, report says.

By DC Velocity Staff

As retailers head into the make-or-break holiday peak shopping season, many companies will try to cap off a strong year by doubling down on strategies to draw online shoppers into stores, CBRE Group Inc., the Los Angeles-based real estate and logistics services giant, said today.

One of the most common approaches in the effort to combine online and in-store shopping is to offer buy-online/ship-to-store—or BOSS—a fulfillment technique that helps stores avoid expensive, last-mile delivery fees, even as they lure shoppers into brick and mortar stores where they may be tempted to make additional purchases, CBRE said in its annual Holiday Retail Trends Guide.

According to CBRE, BOSS is a refinement of the popular buy-online/pickup-in-store (BOPIS) strategy that allows retailers to ship items to stores that are not regularly stocked there, allowing them to offer more inventory than they could typically stock at a single store.

The two approaches have been rising in popularity, with Zara saying that nearly one-third of its online orders are picked up in-store, The Home Depot using in-store pickups for 47 percent of its online orders, and craft retailer Michaels forecasting that its BOPS and BOSS programs will account for almost half of online sales this holiday season, CBRE said.

An additional retail trend expected this season will be a push by stores to reward customer loyalty in ways aside from discounts. For example, chains such as Macy’s, Kohl’s, Target, Sephora, Nordstrom and Victoria’s Secret are offering exclusive experiences such as invitations to a Fourth of July fireworks show, exclusive cooking classes from famous chefs, or trips to New York Fashion Week, CBRE said.

One more holiday trend described in the report will be an expansion of sales opportunities for toys, as retailers scramble to capture consumer dollars that were put into play by the recent closure of Toys R Us.

The various strategies all feed into one common goal: using enhanced capabilities to seamlessly cater to shoppers in stores, online, and on their mobile devices. “Retailers have been refining and improving their omnichannel playbooks for several years, and those efforts now appear to be paying off,” Melina Cordero, CBRE’s global head of retail research, said in a release. “Several of the trends we see this holiday season – including buy-online/ship-to-store services and enhanced loyalty programs – are designed to encourage and reward shoppers’ use of multiple channels.”

Retailers are optimistic about a busy holiday season, on the heels of recent reports by the National Retail Federation (NRF) and other groups, predicting a 4 percent rise in consumer holiday spending compared to 2017.

“This looks to be a strong holiday season for retail for several reasons,” Brandon Famous, chairman of CBRE’s Global Retail Occupier Executive Committee, said in a statement. “In addition to the tailwinds of the robust economy and strong consumer confidence, retailers as a whole have gotten smarter and more efficient with their omnichannel strategies and their programs for attracting and retaining customers.”

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