DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL LAST MILE

Inventory Capabilities Still Lag While evolved retailers have begun to leverage their stores as fulfillment centers, inventory management capabilities still lag behind traditional omnichannel leaders. Specifically, not all evolved retailers that offer in-store pickup fulfill these orders through in-store inventory. Instead, many offer a “ship-to-store” option, which curtails the immediacy of click-and-collect that attracts many consumers in the first place. 12 For example, Yogibo, an evolved home furniture company with 26 store locations, requires five days to fulfill in- store pick-up orders, owing to shipping speeds from fulfillment center to store. Stores can also act as a point of return for online purchases, giving retailers the ability to recapture sales, via exchanges and upselling, from customers unsatisfied with their original orders. While buy online, return in-store services are ubiquitous across the 20 leading omnichannel brands analyzed, just 32 percent of evolved retailers promote the service online. Some evolved retailers, including Birchbox, explicitly state their inability to accept online returns at their store locations, suggesting POS systems limitations. As evolved retailers continue to expand their store networks, they must capitalize on their lack of legacy POS investments and implement order management systems that allow them to take advantage of omnichannel experiences.

Omnichannel Leaders

100%

Death of Pureplay Retail: Availability of Buy Online, Return In-Store, by Business Model Percent of Retailers October 2015, n=20 Omnichannel Leaders, n=19 Evolved Pureplay Retailers

Evolved Pureplay Retailers

32%

Source: L2 Intelligence Report: Death of Pureplay Retail, January 2016.

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1. Customers who choose to pick up their purchases at one of Yogibo’s 26 stores must wait 5 days after placing an online order.

2. Although Birchbox allows customers to return online product purchases via delivery, the brand does not allow customers to return products bought online at their flagship store.

3. Frank and Oak allows customers to pick up their online purchases at one of its 12 stores, but the brand does not fulfill these orders with in-store inventory.

12. “ Customer Pulse Report 2015 ,” JDA and Centiro, June 2015.

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January 12, 2016