The world’s largest retailer will end free shipping for online orders under $50 Canadian starting April 2.
At REI Inc., which operates more than 70 stores and two web sites, customers coming into stores to pick up goods ordered online ring up an average of $90 in incremental in-store purchases.
What’s good for the consumer is good for the retailer. That’s the lesson that multi-channel retailers learn when they let their customers order online and pick up at a store.
At REI Inc., which operates more than 70 stores and two web sites, REI.com and REIOutlet.com, customers coming into stores to pick up goods ordered online ring up an average of $90 in incremental in-store purchases, says Joan Broughton, vice president of multi-channel programs.
The in-store pick-up service is especially popular for orders of large items like canoes and kayaks, she adds. “It’s been so compelling that it has led to an 800% increase in our paddling category sales,” Broughton says.
The service, introduced a year ago, quickly won a following among REI customers, Broughton says, even though REI did little to promote it other than placing notices on its web sites, Broughton says. By the end of the first day that REI offered the service, 60 of its 66 stores processed in-store pick-up orders.
At the end of the first month of the service, customers chose it for 25-30% of online orders-and that share has continued to increase to about 40% today, Broughton says.
REI is able to offer free shipping for in-store pick-ups because it delivers online orders on trucks already scheduled for store deliveries, Broughton says. And because the distribution center that serves REI’s stores also serves its web sites, REI can place online orders on a truck headed for any store.
REI’s average time to get products to stores for pickup is one to two weeks, depending on a store’s location.
Other retailers are more concerned about offering pick-up times in minutes. Sears, Roebuck and Co. is targeting an average of 15-30 minutes, down from 90 minutes to 2 hours, says Bill Christopher, chief of customer care for Sears Direct.
In a project that will take several months, Sears is re-coding software to better organize batch reports of online orders passed to stores, and charging its store personnel to work out faster means of checking in-store availability of merchandise ordered online. Sears fulfills about 60% of its online/in-store pickup orders through store inventory, the remainder from distribution centers.