Target offers incentives to buy online/pick up in stores
In late July, Target ran a promotion offering $10 off any online order of $40 or more if the customer chose in-store pickup. By all accounts, it could be the first or possibly a rare case of in-store pickup being incentivized.
The deal comes as Target has been ratcheting up its promotions, including offering $10 coupons when you buy a threshold amount in certain categories.
But Target spokesman Eddie Baeb told the Minneapolis Star Tribune that store pickup, which debuted nationally in November 2013, already consistently makes up more than 10 percent of Target’s online sales. The promotion was designed to "to drive more engagement and use."
In an interview with RetailWire, Lee Peterson, EVP, creative services, WD Partners, saw the promotion as a way to test the broad appeal of BOPIS (buy online, pickup in-store).
"The thing is, from a retailer’s perspective, you don’t know how big something like this can be, so you have to get people to try it to see if it has any merit in terms of driving significant volume," said Mr. Peterson, "and then measure its scale."
But Mr. Peterson believes it’s worth incenting the use of BOPIS. In a recent article in WayfinD, a quarterly e-magazine from WD Partners, he asserts that BOPIS could be a major differential for retailers with physical stores, arguing that service at retail has been effectively supplanted by convenience. To work effectively, however, stores will have to evolve more into fulfillment centers, he argues.
"From what I can see from our research, people already like BOPIS a lot, but the ‘top 2 boxes’ numbers really never cross 60 percent," Mr. Peterson told RetailWire. "Throw 10 bucks in the mix and I’d bet on that number going over 75 percent."
Indeed, he believes free shipping — the popular incentive many e-tailers use to encourage shoppers to avoid the trip to a physical store — will disappear as an incentive, but that BOPIS is just getting under way.
"Every item in any store today has shipping built into its cost, you just don’t see it," argues Mr. Peterson. "Buying online will soon be the same. However, I see the 10 bucks for BOPIS purchases as a way to begin to understand what it means to their business on a macro level, not just a way to drive traffic. I don’t think we know what that is yet. But Target will soon."
- Target’s promotions get aggressive; Online store pickup gets $10 off – Minneapolis Star Tribune (tiered sub.)
- Amazon Can’t Do That – WayfinD
Is BOPIS (buy online, pickup in-store) worth incenting? Should it be more of a one-off offer or a permanent incentive to drive BOPIS use? When should shopper actions be incented?