How Larger Retailers Integrate Physical Stores with Ecommerce Sites

Most large retailers I work with have brick-and-mortar stores in addition to ecommerce sites. Better integration between these two channels is always one of their goals. Though the integrations vary for every retailer, a few key strategies are consistent. I will describe them in this article.

Pick Up Internet Orders at Physical Stores

Store pickup is a basic requirement for integrating a brick-and-mortar store with an ecommerce site. Almost all retailers have this implemented with varying degrees of success. The following best practices make a huge difference in enhancing the store pickup experience for the customer.

  • Create separate department. Create a separate department in the physical store for handling Internet pickups. This makes it easy for online customers to pick up their orders. The separate department also avoids competing for employee time with the other customers. This can be handled by the existing customer service department, but have a small part of the department dedicated to Internet pickups. Also, make sure that the existing physical-store customer service team can facilitate Internet pickups without impacting physical-store customers. Don’t please online customers at the cost of neglecting customers in the physical store.

  • Prepare in advance. The order should be ready for pickup when the customer comes to the store, versus making the customer wait. The customer needs to be notified as soon as the order is ready for pickup. The store presumably does not have unlimited space to keep all the orders ready forever; give customers a 3-to-5 day window to pick up.

  • Remember to cross-sell. Store pickup is an opportunity to cross-sell or up-sell as the online customer is now in the physical store. You can offer other products — usually at a discount — that go with the customer’s order. Or offer the customer products similar to what was ordered or products that are sold exclusively in the brick-and-mortar store. A lot of retailers miss this revenue opportunity in the rush of fulfilling the order or assigning a junior employee to the “store pickup” department who is not trained to provide cross-sell or up-sell recommendations. is an excellent example of how store pickup works. Walmart calls this “Site to Store.” This has been a strong competitive advantage for Walmart — versus the online-only retailers — and one of the major reasons for Walmart’s online success.

Walmart calls its in-store pickup "Site to Store."

Walmart calls its in-store pickup "Site to Store."

Return Online Purchases to Physical Stores

Store pickup is only half useful without also allowing your customers to return their online purchases in the physical stores. This requires a different level of integration from the pickup function.

  • Accept returns for any online products. This can be straightforward if the items sold in the brick-and-mortar store are the same as the items sold in the online store. Customer service employees will need access to online orders. They can process the returns and the undamaged items can then go on the store shelves for resale. However, this becomes an operational challenge if the brick-and-mortar store does not sell the same products as online. When the products are different, the retailer needs to store and transfer returned online goods back to the warehouse or the vendor. The best practice is to separate items by source and then periodically ship them back. This is also the more expensive option as the retailer typically has to pay for return shipping. But if the item was damaged, you can usually negotiate with the vendor or manufacturer to pay the return shipping.

  • Processing Refunds. If the retailer maintains the online store and the physical store as separate accounting entities, then it requires creative accounting to balance the books for processing a refund for an online transaction in the physical store. The best practice is to either move the full transaction to the physical store — if the products on the order are sold in the store — or move the full transaction (including the refund) to the books of the online entity.

J.C. Penney supports returning of online purchases in the physical store. The following text from its site explains that policy.

J.C. Penney's online return policy states, in part, "Bring your order to one of our 1,500 jcpenney stores."

J.C. Penney’s online return policy states, in part, "Bring your order to one of our 1,500 jcpenney stores."

Disclose Physical Inventory Online

Ecommerce sites serve as gateways to brick-and-mortar stores. Consumers often use the ecommerce site to find the nearest store, and to check the inventory of different products in the store. To facilitate these consumers, provide the following on your ecommerce site.

  • Inventory check. Allow customers to find products sold in the brick-and-mortar stores and check the inventory levels for those product across different physical stores.

  • Lead time. If the product is unavailable at a brick-and-mortar store, the ecommerce site should display the lead-time for the item.

This functionality is offered by leading retailers. Below is an example that shows the Best Buy site showing the availability of an item in different stores.

Best Buy discloses in-stock inventory in physical locations with the "Available Now" text.

Best Buy discloses in-stock inventory in physical locations with the "Available Now" text.

Keep Pricing and Promotions Consistent

Operating costs are typically higher in a brick-and-mortar store versus online. That difference results in many retailers pricing their products differently across these two channels. However, for consumers, both channels belong to the same company and they expect to see the same product price, whether they buy it online or in the physical store. The same applies to promotions; consumers expect promotions to apply across channels. So, for product pricing and for promotions, keep the following practices in mind.

  • Consistent product price. Pricing products the same in both channels means that consumers will be less confused. It’s easier to handle refunds and exchanges for products bought online.

  • Promote physical stores online. Use online campaigns to bring traffic to the physical stores. These campaigns typically use promotions that can be used by a certain date at the brick-and-mortar store. Michaels, the arts and crafts store, does this very effectively. It sends out email coupons to its customers and these coupons can only be redeemed for in-store purchases by a certain date.

Michael's uses online campaigns to bring traffic to the physical stores.

Michael’s uses online campaigns to bring traffic to the physical stores.

Integrate Online and Brick-and-Mortar Customer Service

For retailers with both online and physical stores, customers frequently use both channels to browse and buy products. It is important, therefore, for customer service employees to have visibility into all customer interactions and be able to answer questions related to both the channels. The best practices in this area are as follows.

  • Access online orders in physical store. Physical-store customer service personnel should be able to look up online orders and answer any questions related to products, pricing, shipping or order status. This requires these employees to be trained on the online system and kept informed on all site changes, product changes, promotions, and other changes.

  • Access to customer service history. Customer service personnel also need access to a customer’s prior customer service interactions. This can help resolve problems, and the offering of discounts where applicable. A customer that complains about every order — or complains unreasonably — may not be the right customer to receive further discounts.

Gagan Mehra
Gagan Mehra
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