BOPIS retail trends show that the buy online pickup in store trend is only growing. In fact, almost 70% of US consumers already use BOPIS. What was once an experimental service stores offered customers has gone mainstream. However, considerable obstacles remain. One of those is how to manage the risk of eCommerce fraud posed by BOPIS programs.
To help executives and fraud managers get their head around the size of the challenge they face, we’ve put together some retail trends from reliable sources. We hope you’ll use them to understand why BOPIS is a channel that while no longer ignored, is far from receiving the amount of attention it deserves.
- BOPIS Retail Trends Show Customers Increasingly Demand BOPIS Retail Options
- BOPIS Retail Trends Also Show Its Popularity Is Attracting Ecommerce Fraudsters
- The Most Important BOPIS Retail Trend: You Must Be Fast But Also Secure
- What are the challenges BOPIS presents for eCommerce fraud managers?
- How do Fraudsters Try to take Advantage of BOPIS?
- How can you decrease BOPIS pickup times for customers?
- How do you balance BOPIS fraud prevention with the in-store customer experience?
- How can you train in-store associates to detect BOPIS fraud?
BOPIS Retail Trends Show Customers Increasingly Demand BOPIS Retail Options
1. Research by Forrester found that 77% of consumers are interested in picking up items at a store, highlighting the importance for retailers to offer this channel as part of an omni-channel strategy. Failure to do so will mean getting left behind competitors. — Payments Next
2. This consumer demand is driving in-store pickup in all verticals, with Juniper Research predicting the channel will grow to account for $78b in sales by 2022. — Brightpearl
3. This is because reports of the death of the physical store are greatly exaggerated—58% of Generation Z has purchased something online and then headed to the store to collect it. — Package Concierge
4. Moreover, 60% of Gen Z said this hybrid option was something they consider when deciding which retailers to purchase from. — Retail Dive
5. In fact, Home Depot reports that 43% of orders placed online are actually picked up in the store by customers. — Home Depot
6. Further strengthening the reality of this sales channel is the fact that 14% of Walmart customers actually use BOPIS every single time its available. — National Retail Federation
7. And if all that wasn’t enough, more than 40% of shoppers now report going to the store to get a purchase during the critical holiday sales period. — Big Commerce
BOPIS Retail Trends Also Show Its Popularity Is Attracting Ecommerce Fraudsters
8. Unfortunately, fraudsters are on to this shift—as well as retailers’ uncertainty with how to secure it. As a result, BOPIS fraud rates have recently increased more that 250% year-on-year.
In the past, retailers could expect to see much lower fraud rates than what they experience with online-only sales. That is no longer the case. Today, retailers must take measures to understand and defend against the threat—or pay the price. — Payments Next
9. Adding to the urgency, approximately 25% of shoppers that begin their purchasing decisions online end them with a visit to a retailer’s physical store. Such a high number means it is impossible for retailers to eliminate the fraud threat by simply “focusing on online channels”. — ForSee
10. Overall, a survey by eCommerce fraud prevention company Signifyd found that at least 20% of online revenues from their retail clients came from the BOPIS channel. — BizTech
11. Research from the JDA Voice of the Consumer Survey showed that 80% of consumers were likely to purchase online but pickup in store when incentivized with things like price discounts. — Fierce Retail
12. But the discount strategy is sound because retailers can also expect to enjoy additional revenue from consumers with this approach—research shows that as much as 40% of them will spend additional money once they are inside a physical store. — The Paypers
13. This is why 37.6% of retailers report that they offer in-store pickup programs so they can get customers into their stores so they can sell them additional items. — Payments Next
The Most Important BOPIS Retail Trend: You Must Be Fast But Also Secure
14. One of the main reasons ‘click and collect’ has emerged as a legitimate alternative for consumers is they are seeking to mix convenience with speed. As many as 40% of consumers have abandoned an online purchase once they realized it would take over a day to arrive. — BluePay
15. In addition, Forrester research shows that 48% of consumers in the key 25-34 age demographic have ‘no-showed’ a purchase they needed to go to the store to get. One best practice for retailers to lower this number is to notify consumers their order is ready for pickup as quickly as possible. Fraud considerations cannot slow this process down. — Forrester
16. In fact, research by eMarketer shows that 50% of consumers picking packages up from a store after purchasing them online did so because they had an ‘immediate need’ for their goods. — eMarketer
17. And BOPIS fraud prevention becomes even more important when you realize that 12% of channel users cited ‘curbside pickup’ as an incentive. The demand for not just fast, but instant-gratification options requires retailers to make decisions about fraud very quickly while still maintaining a high degree of accuracy. — ForeSee
18. Moreover, 17% of customers think retailers should have their order ready for pickup within just an hour of placing it. — BizRate Insights
19. Just to drive the point home, customers who received notification their order was ready for pickup within 4 hours were 19% more likely to place another order through the channel. — Bell and Howell
20. And yet retailers still haven’t made streamlining the customer experience an absolute priority—25% of customers that have used the channel said they had some kind of issues when they arrived at the store to pickup their order. — BizRate Insights
FAQ: How to Use BOPIS Retail Trends to Prevent BOPIS Fraud
Even Generation Z—traditionally thought of as an ‘online only’ generation continues to find a place for the store in their shopping habits. Given that fact, the importance in-store pickup as a sales channel will only continue to increase for retailers, especially as today’s young consumers gain additional purchasing power.
On the other hand, the sharp increase in BOPIS fraud rates are troubling. Retailers used to believe that something ‘in store’ could not be affected by eCommerce fraud tactics. Data proves this assumption is mistaken. Retailers must know how to prevent BOPIS fraud, or they risk major losses in the future.
Unsurprisingly, retailers have questions about how to accomplish this moving forward:
What are the challenges BOPIS presents for eCommerce fraud managers?
The speed that BOPIS orders to be approved leaves very little time for review. In addition, the lack of a physical address removes the ability to check that against the card holder address.
However, these problems aren’t insurmountable. The use of billing/shipping mismatches has been declining in importance; all of the best eCommerce fraud prevention companies use machine learning technology that analyzes tons of data before making accept/decline decisions.
In addition, the rise of AI eCommerce fraud prevention means the centrality of these types of rule-based systems to overall prevention strategies will only decline in the future.
How do Fraudsters Try to take Advantage of BOPIS?
For starters, they forge identities at the point of pickup. Because in-store associates are not trained to spot fake IDs, this is a loophole fraudsters can exploit. Another common scam is for a fraudster to cancel the order and then pick it up before in-store associates can be notified.
In addition, fraudsters can scale their operations by having a core fraud team operating online, while hiring third-party people to roam around and pick-up the items. Because it is difficult, if not impossible, for stores to communicate across towns or even states, a well organized fraud ring can run the same scam over and over again without getting caught. An example of this is a Chinese fraud ring that was busted operating from Utah to Washington state.
How can you decrease BOPIS pickup times for customers?
An obvious first step is to have manual fraud analysts review these orders first. In addition, the use of automation should not be confided to fraud prevention only.
Retailers should also look at their logistics. Many times, fraud and fulfillment systems are separate, making coordination difficult, if not impossible. In addition, solutions such as automated pickups for in-store collection of items bought online can bring huge speed gains. In fact, Walmart increased speed by 60% using this kind of solution.
How do you balance BOPIS fraud prevention with the in-store customer experience?
Retailers must get out of the mindset that there are ‘online’, ‘in-store’, and ‘hybrid’ customers. In fact, today’s retail landscape is an omni-channel one that offers a single, end-to-end customer experience across all channels. For fraud, this means using the same online signals that evaluate an ‘online’ order when deciding whether or not to fulfill a request to pick-up in store.
The reality is that many of the most important fraud signals, such as site behavior, data enrichment, or cross-checking customers against an internal network of known fraudsters will detect a lot of online fraud attempts. The key, as stated above, is to make sure internal systems are setup to make fraud accept/decline decisions trigger in-store fulfillment commands.
How can you train in-store associates to detect BOPIS fraud?
Overburdening associates—who are not detectives—is a recipe for disaster. The best way to help them is to remove as much of the burden from them as possible. Automated solutions at every step of the process—analysis, verification, and fulfillment—are critical.
Ideally, the in-store associate should receive notification an order is approved, and then simply review a customer’s ID (and possibly the credit card used to make the purchase) to verify to the best of their ability that the person collecting the order is the person that made it.
Ultimately, automating what can be automated and simplifying the role of the associate frees them up to focus on what they do best—provide great customer experiences. Customers will be happy, and retailers will make the most of the positive BOPIS retail trends such as additional in-store purchases, and repeat customers.