Why ‘Buy Online, Pickup in Store’ Isn’t Working for Retailers

November 5, 2015, 7:28 PM UTC
online shopping
online shopping
Photograph by John Lamb—Getty Images

Retailers aren’t delivering the goods—at least not to a satisfactory degree when it comes to “buy online, pickup in store” strategies.

Stores such as Home Depot (HD) and Walmart (WMT) have implemented these strategies as a way to attract more online shoppers while also reducing delivery costs, propping up overall profits. About 61% of stores with online and brick-and-mortar operations offer such an option. However, a new study shows that it isn’t working as smoothly as customers and retailers hoped, according to a survey by JDA Software Group.

The study looked at over 1,000 online shoppers in the U.S. and found that 35% of those customers opted to use a buy online, pickup in store option. Of those people, 50% dealt with problems related to getting their items.

That’s a surprisingly high failure rate, Wayne Usie, senior vice president of retail at JDA, told the Wall Street Journal. The reason behind it is that stores aren’t set up like warehouses. It’s easy to collect disparate items in a streamlined, dedicated storage facility, but in-store sales people are bombarded with their daily duties helping customers on top of packaging online orders.

A service meant to help the bottom line by saving on the additional costs related to extra labor and shipping may actually be alienating customers. Another study by JDA found that half of the customers polled who had an issue with an online delivery were unlikely to buy from that store during the peak holiday season.

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