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JCPenney’s in-store pickup triumphed while others struggled

JCPenney is attributing a portion of its holiday success to an online order, in-store pickup program even as a number of other retailers ran into obstacles with similar omnichannel strategies.

For retailers it is difficult to make a mobile order and in-store pickup program work flawlessly, as there are many steps that can go wrong from the time the order is placed until the customer picks up the product. JCPenney saw a 3.9 percent increase of holiday sales compared to last year, a large portion of which was made up by in-store pickup due to the retailer’s focus on creating a seamless omnichannel experience.

“With pickup in store, the retailer does not have the luxury of deciding which store to direct the customer to, and the systems reporting the inventory availability does not have any insight into whether a store is slammed or had half the employees call in sick or had a road rage incident in the parking lot, for example,” said Nikki Baird, managing partner at Retail Systems Research. “So the first place the order can go wrong is if the company accepts the order at the location the consumer wants, but that location is not prepared to deliver that inventory.

“And while most retailers set thresholds to verify if inventory is available, only show this store as a pickup location if there are four or more of the item in stock, there can still be plenty of situations where employees cannot find the item or it is actually out of stock,” she said. “That is the next place where it can go wrong.”

JCPenney’s wining strategy
It is likely that JCPenney focused on making sure its in-store pickup program could address any problems such as inventory and cross-store communication issues. Many of its customers chose to do their gift shopping through its mobile and online ordering program, prompting the retailer to focus on streamlining the strategy for the 2016 commerce year.

The retailer’s pickup program is available at more than 1,000 stores in the United States. The number of customers leveraging the in-store pickup rose during the holiday season, meaning the program was likely to have assisted with driving over all holiday sales.

A variety of reports suggest many other retailers had trouble meeting the high-expectations of consumers, with about 53 percent of customers expecting items to be ready for pickup within two hours, according to a survey by Forrester Research. These high demands can be difficult for retailers to accomplish during the busy holiday season.

The consumer conjecture regarding speedy service is likely due in part to Amazon, as it is retraining consumers when it comes to seamless purchasing through mobile ordering and delivery. Its strategies are providing shoppers with quick supply on demand, making it all that much more important for bricks-and-mortar retailers to streamline click-and-collect programs as best as possible.

However, even with an optimized program it may not be enough for retailers to compete if consumers continually embrace amazon’s cutting-edge offerings.

In-store pickup problems
The Washington Post reported a series of customer complaints on Twitter, discussing long waits, miscommunication and poor in-store service. Retailers such as Kmart saw many disgruntled social media users take to the platform to voice their disappointments, creating even more of a problem.

“Click and collect is all about setting customer expectations,” Ms. Baird said. “When you take their money, they expect that they own the item, even if it is not in their possession.

“So it is important for retailers to set expectations from the start, that the order is not completed until the item is confirmed, if it needs to be that way or that the item is actually ready and waiting for pickup when the customer gets there,” she said. “I will say that anything that taps into store inventory to meet online demand is a win for retailers.

“The business case for it is very impressive, even without adding in the benefits of a potential additional trip to the store. So if a retailer can pull it off, they have the opportunity to significantly impact their overall sales as a result. If you can do it right, it is worth doing.”