Target shoppers have been able to pick up products purchased on Target.com without leaving their cars for a while. This insight explores how retailers can use this feature as the next logical step in the “buy online pick up in store” (BOPIS) concept and build some differentiation with Amazon.
Table of Contents
Introduction – Target’s New Feature
Did you know: More than half (55%) of consumers surveyed say they’ve written off future purchases at a given retailer based solely on an inflexible return policy? but 86% have made another purchase during a product return at least once during the past year, according to the logistic company, Optoro.
While retailers make significant strides in transitioning consumers to online shopping during the pandemic, the return process has not changed much during the same time. The long wait to get merchandise returned at a physical location contradicts directly to the ease of shopping online. This is especially the case when the return desk typically has three or fewer team members working.
Target studied the merchandise return patterns and designed a new feature under its Drive Up Service to allow its customers to return merchandise without leaving the comfort of their vehicles. This new feature will be rolled out to over 2,000 retail locations in the next six to eight months.
How Does It Work?
Target customers can log into the account through the mobile application or online to process the return.
1. Pick the item(s) they want to return and pick the location for drop off
2. Inform the Target location that they are on their way
3. Park by a designated zone for processing
4. Target Drive Up team member will process the return and refund to the original form of payment used
Tip: This new feature eliminates the need to queue up inside the store for quick returns and can be combined with new merchandise pick-up and Starbucks orders at the same time.
“Our journey to expand our fulfillment options starts with making it easier for our guests to shop with us,” says Mark Schindele, Target’s Executive Vice President and Chief Stores Officer. “That’s why we’re launching Drive Up Returns. Allowing our guests to process a return from the comfort of their car underscores our commitment to helping our guests shop — and return — however they choose.”
What’s In It For The Customers?
Customers benefit from this new feature in three key ways:
1. The biggest benefit would be convenience. This is especially the case for families with kids and elderlies in the car and does not want to mobilize them into the physical store. This can also be useful in hot/cold weather scenarios.
2. Instead of returning and waiting for an online purchased item to be processed through a mail drop-off site (like the post office), the speed of return and refund is reduced significantly through the feature.
3. This new feature is complimentary for all eligible customers. Who doesn’t like free? Additionally, customers have more flexibility and control over when and how to return merchandise.
What’s In It For Target?
By introducing a new method to process returns, Target can benefit from the following:
1. Incurring lower shipping costs from customers using the mail drop-off method for returns. This is an area that many online retailers spoke out about. Shipping costs as part of free delivery and returns can impact already thin profit margins. Processing returns on-site also improve inventory management.
2. Engaging customers to use the mobile app and the website. This creates a better data flow between purchases and returns which allows Target to form a more complete customer profile with fewer systems and data interfaces. The retailer would also receive richer customer behavior data points (e.g., which products are more likely to be returned, which locations have a higher ratio of drive-up pick-up and return?)
3. Differentiating itself from other retailers (especially Amazon) who rely on the mail drop-off return method currently.
Target’s Recipe For Success
Since its launch in 2017, Target’s Drive Up Service has been a certified success and is one of the contributing factors to its improved financial performance. The new return feature will add another feather to its focus on customer experience. With that said, the service’s acceptance in the marketplace would be determined by:
1. Awareness – Tell its customers about the new feature using a mix of its social media assets (637k YouTube subscribers, 5.3 million Instagram followers, 2.4 million TikTok followers, etc.), cross-channel interviews with news organizations, email/mobile app notifications, and press releases.
Once the new process is in place, the retailer can work with content creators to showcase how it is easy to pick and return merchandise and build upon the initial awareness. An extended feedback system should be created to collect data on customer satisfaction. This will help the retailer adopt improvements as quickly as possible.
2. Employee experience – Building a more streamlined return process is only one component of a great customer experience. Employee example especially training is equally important in delivering the new brand promise (i.e., team members servicing the returns and information technology support desk should be trained on the new process with workbooks and on-hand experience). Any initial service issues should be documented and resolved prior to a bigger implementation.
Returning items will likely require more time for merchandise verification. As such, employees should be supported to handle customers in various weather conditions. Customers can see if employees are suffering from challenging weather elements. Target should speak about employee experience as part of the program’s introduction in different locations.
Target is the first general merchandise retailer in North America to process returns through its BOPIS customer solution. Competitors should take a closer look if they offer a similar process of their own and determine how their customers and the company can benefit from this new feature.
Given it takes some effort and resources to reprogram, modify, implement, and communicate changes, Target’s competitors should consider how BOPIS return would fit into their existing customer experience journey sooner than later.
Target’s new return service is an innovative and welcomed addition to its Drive Up program. Convenience, seamlessness, and efficiencies will drive faster customer adoption without adding significantly more operating costs to the existing program.
Good awareness building and employee experience design will ensure that the customer journey will not be impacted beyond the initial teething challenges. The retailer can build big customer experience differentiator for themselves if the new feature is well executed.
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