Introducing BOPIM Mall owners are adapting to fast-changing shopping habits in the digital age. Shopping-center owners are investing in innovative service offerings to tap into consumer demand for convenience and flexibility in product fulfillment options – and to drive foot traffic. BOPIM is an evolution of buy online, pick up in store (BOPIS) and lets consumers collect their online purchases at designated locations in shopping centers. The BOPIM model can feature centralized collection lounges, curbside pickup or smart lockers. How BOPIM Works Mall operators face a choice of two major approaches in implementing BOPIM: 1. The mall operates the service. Mall owners collaborate with tenant stores and online retailers to fulfil online orders at the malls. For example, SmartCentres, a Canada-based real estate company, piloted a BOPIM service in 2014, offering collection services for both tenant stores and online retailers that register for the program. Online shoppers choose the SmartCentre pick-up point and the system tracks orders and receipts, and manages pick-up times and frequency. 2.  A third party operates the service. Mall operators can partner with third-party fulfillment providers. For example, Westfield, a shopping mall brand operated by the France-based real estate company Unibail-Rodamco-Westfield, entered into a partnership with UK parcel collection service CollectPlus to launch a BOPIM offering at its Westfield London mall in 2014. Under this approach, third-party service providers manage the technical aspects of BOPIM. Mall owners need only provide space to set up collection lounges and/or curbside pickup areas. Third-party service providers manage the logistics and customer-service operations. For example, CollectPlus, which is jointly owned by the UK-based payment services provider PayPoint, works in partnership with IT services provider NetDespatch to implement the technology, including integrating inventory and order management systems, and managing point of sale terminals. Some mall owners tie up with online retailers directly, in which orders are filled from retailers’ distribution centers (DCs) to the malls’ collection stations. For example, PREIT, a US-based REIT, was one of the first mall landlords to partner with Amazon to offer Amazon Lockers – now a common site in shopping centers worldwide. With online retailers managing and filling the order, mall operators do not have to worry about back-end operations.   Key Things to Consider When Implementing BOPIM When integrating BOPIM, mall operators should consider the following factors: 1. Integrate and ensure the accuracy of inventory systems. Where mall operators manage the BOPIM service themselves, they may be required to have a view of inventory in their tenants’ stores as well as managing orders arriving from any external retailers participating in the service. Should malls be picking or consolidating orders from their retail tenants, close collaboration on logistics and inventory systems can help ensure swift fulfillment of BOPIM orders. A BOPIM service that is offered through a mall’s own website may require mall operators to provide real-time visibility of product availability to customers. However, if the BOPIM service is operated by third-party logistics firms, mall operators can outsource the management of these services. 2. Adopt technologies that facilitate end-to-end customer experiences. Malls operating BOPIM themselves may need to invest in technologies that integrate online and offline channels. Singapore-based Funan Mall, owned by real estate company CapitaLand, has successfully integrated online and offline by investing in technology and automation. Funan Mall’s in-store smart terminals integrate payment data with other data streams, such as BOPIM orders, stock inventory and customer relationship management, providing a unified view for customers. The mall offers 24-hour curbside pickup supported by its logistics and warehousing facilities. This service is offered for brands in the mall. 3. Getting the mall operations right. The BOPIM challenges are not just technological: Mall operators also need to define the customer experience while managing the functional requirements of BOPIM. Where malls operate BOPIM services themselves, they will see a whole new internal logistics operation. Like the retailers they work with, those malls must ensure associates are trained and equipped with the right information to fulfil orders smoothly and efficiently. Key Challenges Mall Owners Face in Managing BOPIM The BOPIM model can require investment in IT development, support and maintenance. Even if mall owners collaborate with a third-party logistics provider, there may be additional costs, such as logistics provider fees. Mall owners need to allocate space for curbside and in-mall collection – and ensure the operation does not otherwise disrupt every day mall traffic. And, where they operate the service themselves using inventory held by tenants, malls incur the labor costs involved in picking, packing and consolidating orders. Leading Mall Operators Embracing BOPIM Below, we assess the BOPIM offerings of key global mall operators: Unibail-Rodamco-Westfield was formed when Unibail-Rodamco, a France-based real estate company, acquired Westfield, a global mall operator, in 2018. Currently, the company operates the Westfield brand across the US and Europe. Prior to the acquisition, both Unibail-Rodamco and Westfield each piloted the BOPIM model to drive mall traffic and leverage cross-selling opportunities. In 2014, Westfield partnered with UK order fulfillment company CollectPlus to offer a collection lounge at its Westfield London mall. This BOPIM offering not only catered to brands in the mall but also supported online and multichannel retailers, such as Amazon and ASOS. Online shoppers could choose the CollectPlus option and select Westfield London as their preferred delivery location. Consumers could shop items online from over 260 retailers and collect them from the CollectPlus Lounge, which was equipped with fitting rooms so customers could immediately return unwanted apparel items. In May 2015, Unibail-Rodamco launched BOPIM at its Paris mall Les Quatre Temps, allowing online shoppers to order products from any website or marketplace and collect from the mall. Les Quatre Temps also features fitting rooms. After BOPIM, the mall saw 7,000 online order pickups in less than seven months. Following the success of its BOPIM program at Les Quatre Temps, in 2016 Unibail-Rodamco entered into a partnership with Amazon to offer collection lockers at nine of its shopping malls in France. CapitaLand, a Singapore-based real estate company, in 2017 tied up with e-commerce company Lazada Group, owned by Alibaba, to offer a BOPIM service across its malls in Singapore. The company launched BOPIM at five malls: Plaza Singapura, Bugis+, IMM, JCube and Westgate. Under the deal, CapitaLand aggregates retailer tenant offerings on Lazada’s site, so customers can order on Lazada and collect at lounges at the five malls. The pick-up lounges feature collection lockers, as well product-testing benches and fitting rooms so customers can try products before taking them home. The BOPIM service also includes a loyalty program. The company stated that it hoped the BOPIM model will draw shoppers to its malls and reduce last-mile delivery costs for retailers. CapitaLand is also encouraging online retailers to open physical shops in its malls. In June 2019, CapitaLand reopened Funan Mall after three years of redevelopment. The reimagined Funan Mall has automated guided vehicles (AGVs) and robotics. The AGVs pick items from stores and deposit them at one of the 100 pick-up boxes in the mall. Customers collect using a QR code sent to the phone. The Funan Mall offers a 24-hour drive-through collection service, supported by warehousing facilities. [caption id="attachment_98558" align="aligncenter" width="700"] Funan Mall’s automated concierge service
Source: CapitaLand [/caption]   SmartCentres, a Canada-based real estate company, piloted pick-up depots in 2014, dubbed Penguin Pick-Up, in three of its Toronto-area malls. Penguin Pick-Up serves tenant stores and online retailers. Shoppers can also order products from international retailers that ship to Canada. Mall staff bring the orders to the customers’ cars. SmartCentres developed the IT system in house and tracks total inventory across its tenant stores as well as online retailers. The Penguin Pick-Up program has driven mall traffic and benefitted its tenants, according to Egil Moller Nielsen, former Senior Vice President at SmartCentres. In a 2015 survey by the company, about 42% of customers said that once they collect a package from Penguin Pick-Up, they visit other stores in the mall to continue shopping. [caption id="attachment_98560" align="aligncenter" width="700"] Source: SmartCentres[/caption]   Sektor Gruppen (acquired by Finland-based mall operator Citycon in 2015) became the first Norwegian mall operator to pilot BOPIM, in 2014. Sektor partnered with communications and logistics provider PostNord to test automatic lockers at three malls in Norway. Online shoppers can choose to have the items delivered by PostNord to the shopping mall. PostNord manages the IT systems and logistics services. When the parcel is ready for collection, PostNord sends a text or email to the customer. [caption id="attachment_98562" align="aligncenter" width="700"] Source: Citycon[/caption]   Factors Driving BOPIM Adoption BOPIM offers the following benefits, on the supply side and the demand side: 1. Higher mall traffic and cross-selling opportunities. BOPIM drives foot traffic, which in turn drives discretionary sales. BOPIM is a strategic weapon for mall owners to compete with pure-play online retailers and marketplaces, which don’t have the benefit of extensive physical footprints. 2. Convenience for consumers. BOPIM lets shoppers potentially save on shipping costs and, where orders are picked from stores in the mall, get items more quickly than if they were delivered. Our View on How Malls Can get Their Omnichannel Right with BOPIM Where malls are directly operating BOPIM services, we believe operators can take the following measures to make the most of BOPIM initiatives: 1. Get the communication right. As shoppers continue to demand more fulfillment options, mall operators need to make it simple for shoppers to get what they want and in the way they want it. Mall operators should ensure they get the communication right. Firstly, they should tell customers BOPIM is available – clearly and obviously on their sites and in their centers. Secondly, mall operators must ensure they give customers accurate information and directions on how and where to collect online orders. 2. Integrate inventory and order management systems. Mall operators can invest in technologies to ensure seamless communication between parties. With integrated inventory and order management systems supporting in-mall picking, customers can have almost-real-time visibility into inventory to ensure the product they want is in stock. 3. Train and incentivize mall staff. Ensure staff are well trained and incentivized to perform as fulfillment experts and deal with BOPIM customers. Information and training can reduce delays and confusion – which can damage customer loyalty. The Way Ahead BOPIM offers significant opportunities for mall owners to boost traffic and gain a competitive advantage over online-only competitors. Partnering with third-party service providers or directly investing in technology, staffing, training and automation can help mall operators take advantage of growing consumer demand for collection services.