Dive Brief:
- Luxury retailer Kate Spade will roll out a buy online, pickup in store (BOPIS) fulfillment option this year.
- The 175-store chain says that a ship-from-store option introduced in the final quarter of 2015 proved successful, especially during the holidays.
- Net revenues for Kate Spade grew 7.6% to $429 million in the fourth quarter, while sales from direct channels were up 14%.
Dive Insight:
Aware that the path to purchase more often begins online, Kate Spade is experimenting with fulfillment options that allow customers to shop its selection of luxury bags, apparel and accessories online, and access their purchases in stores. The 175-store chain will launch a click-and-collect option later this year.
Kate Spade had already turned select locations into fulfillment centers during the fourth quarter with the introduction of a buy online, ship from store option. According to CEO Craig Leavitt, the fulfillment option helped Kate Spade manage inventory, sell more items at full retail price and add incremental sales.
Online sales make up about 20% of Kate Spade revenues, which grew 9.1% in 2015 to $1.243 billion. The company optimized its mobile site in the third quarter, spurring new growth from the platform. According to annual reporting, sales from the company’s direct-to-consumer channels were up 14% in the fourth quarter and 13% for 2015.
In-store pickup of orders made online is getting to be big business. According to Slice Intelligence data published earlier this year, BOPIS sales made up substantial portions of 2015 e-commerce sales for Sam’s Club, Kmart, Toys ‘R' Us, and other big-box chains. Almost a third (30.2%) of Sam’s Club e-commerce sales are picked up in-store, Slice reported, and 22.6% of Kmart’s online sales are fulfilled in-store.
Savings and speed are major incentives for consumers to try BOPIS options. According to a separate study from Blackhawk Engagement Solutions, 86% of shoppers surveyed would try in-store pickup if they could save $10 on a $50 item, and 78% would try it if they could take delivery three days sooner.
Stores offering BOPIS can usually offset any incentives by building incremental sales from the added foot traffic. “Every retailer should be running BOPIS rebates to drive incremental in-store traffic and reduce overall costs,” Rodney Mason, general vice president of marketing for Blackhawk, told Retail Customer Experience late last year.
