Determinants of the intention to use Buy-Online, Pickup In-Store (BOPS): The moderating effects of situational factors and product type

Highlights

• This research investigates which factors would affect the BOPS consumers’ intention.

• The characteristics of innovation and the online risk would affect the BOPS intention.

• This proves the moderating impacts of locational convenience and product type.

• This suggests those moderators be considered more carefully to manage BOPS services.

Abstract

Despite the wider introduction of the buy online and pick up in-store (BOPS) service by retailers, research on BOPS is still sparse, especially those from the consumer perspective. This paper employs the scenario-based factorial survey method to investigate how the perceived characteristics of innovation and the perceived risk of online shopping influence the consumers’ intention to use BOPS while also considering the moderating effects of situational factors (location convenience) and product type (involvement). Our findings indicated that the consumer perceptions of relative advantage, complexity, compatibility, and risks involved in online shopping are important antecedents to intention to use BOPS, and that these relationships were significantly moderated by locational convenience and product involvement. The implications of the findings and suggestions for future research are discussed in detail.

Introduction

With the explosive growth in electronic commerce and mobile usage, new patterns of consumption have emerged to allow consumers to cross online and offline freely. Now, consumers can search for information at brick-and-mortar stores but make actual purchases at a lower price using online channels. In fact, such “research shopper behavior,” the consumer’s propensity to research for a product in one channel but to purchase it through a different one (Verhoef et al., 2007), has become a common process engaged by consumers when making decisions on purchases. To reflect this trend, many retailers have integrated their existing channels to improve customer value proposition (Gao and Su, 2016) to create an omnichannel environment where different sales channels are seamlessly and interchangeably used during the consumers’ product search and purchase process. Consequently, scholars and practitioners have been paying increasing attention to omnichannel management, defined as “the synergetic management of the numerous available channels and customer touchpoints, in such a way that the customer experience across channels and the performance over channels are optimized” (Verhoef et al., 2015).

One of the main business models under the omnichannel management strategy is the Buy Online, Pickup In-Store (BOPS) service. Under BOPS systems, consumers can first search for the item they want online and then check to see if it is in stock at a nearby brick-and-mortar store. If the item is in stock, they can purchase it online and pick it up at the offline store of their choice shortly after closing the purchase. The BOPS option has been gaining popularity over the years among consumers. According to the 2016 survey¹ conducted by the U.S. supply chain management company JDA Software on 1,000 U.S. consumers, 46% of the respondents had used BOPS in the past 12 months. Furthermore, Best Buy, the U.S.-based transnational electronics retailer, announced that for approximately 40% of its online purchases, consumers opted to pick up their purchasing items in-store².

Implementing the BOPS service can provide benefits to both retailers and consumers. According to the New York Times (2011),³ BOPS may bolster store traffic and potentially increase sales. Consumers who use BOPS often make additional purchases at the offline store when they pick up their orders (Gallino and Moreno, 2014). For this reason, retailers across different categories, such as Macy's, The Home Depot, Apple, Crate& Barrel, Toys “R” Us, Best Buy, have been providing the BOPS service to their customers, as a strategic business model to improve retail sales. From the consumer perspective, BOPS allows them to reap the benefits of each channel (e.g., ability to search merchandise information online, instant pickup) while avoiding their inherent costs (e.g., traveling costs to pick up, shipping fee, psychological cost of waiting) (Chatterjee, 2010).

Since BOPS is still in its early stage, literature dealing with BOPS is still sparse. In particular, while there are a few existing studies on BOPS from the retailer perspective (Gallino and Moreno, 2014, Gao and Su, 2016), those that examine the service at the consumer level are exceedingly rare. Therefore, this study aims to fill this knowledge gap by identifying the antecedents to consumers’ intention to use BOPS and their direct and indirect effects. Specifically, this research examines the characteristics of innovation adoption given in the Diffusion-of-Innovations (DOI) theory (Rogers Everett, 1995) and the risks involved in online shopping (Cho, 2004) as the main antecedents to the intention to use BOPS. Our assumption is that, since BOPS is a relatively new business model which is uniquely distinguished from traditional business models such as brick-and-mortar and online-only stores, the BOPS service can be considered a type of innovation. Therefore, the main characteristics of innovations (i.e., relative advantage, complexity, and compatibility) could be substantial factors in forming the intention to use BOPS, while the perceived disadvantages (risks) of online shopping, as an alternative to BOPS, could be influential in inducing a positive attitude toward BOPS.

Another dimension considered in our research design is the possible moderating effects of external factors on the intent toward BOPS usage. For instance, if, after purchasing an item online, a consumer realizes that the offline store for pickup is further away than originally thought, will s/he still have a positive view of BOPS or have the intention to reuse the service? Also, will a consumer be more willing to use BOPS when they are purchasing products that have higher economic significance and require relatively more effort and information searching than when s/he is buying a cheaper, consumable item? The two external factors – the situational factor of (pickup) location convenience and the level of product involvement – are incorporated in our investigation to refine the predictability and significance of the main antecedents.

In sum, the purpose of this study is to examine 1) how consumers’ perceptions of the innovation attributes of BOPS affect the formation of the intention to use BOPS and 2) the moderating effects of situational factors (location convenience) and product type (involvement) within our model for BOPS. This paper is composed as follows. Section 2 reviews the literature on BOPS in the omnichannel context. Section 3 describes the conceptual framework of this study and presents the hypotheses. Section 4 explains the research methodology, and Section 5 demonstrates the analysis results. Finally, Section 6 presents the conclusions, implications, and limitations of this study as well as suggestions for future research.