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How “Buy Online, Pick Up In-Store” Gives Retailers an Edge

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The pandemic has rapidly accelerated the digital transformation of retail — but as lockdowns come to an end and the economy recovers, many firms are wondering what the future will hold. Customers are unlikely to go back to their old ways of shopping, and yet adapting to online options has posed serious challenges for retailers, many of whom viewed these services as merely stop-gap measures, not long-term solutions. What can retailers do to stay relevant in the post-pandemic world while still retaining the advantages of tried-and-true strategies? In this piece, the authors discuss forthcoming research that suggests that the “Buy Online, Pick Up In-Store” model may be the best option, as it provides many of the advantages of online shopping without many of the downsides of other types of digital shopping experiences. They go on to suggest that many companies could likely benefit from conducting analyses on their own data, similar to the analysis described in the authors’ research, in order to identify the best strategies for their unique contexts and business needs.

For all the talk of digital transformation in recent years, prior to the pandemic, many retailers continued to rely heavily on physical stores. In 2019, less than a third of U.S. retailers had implemented a digital transformation strategy, and just 4% of the 500 largest retailers offered online ordering with curbside pickup.

When the Covid-19 pandemic hit, the American retail landscape transformed overnight. Major brands shuttered storefronts and dove headfirst into a variety of omnichannel experiments, including services like curbside pickup; same-day home delivery; and buy online, pick up in-store (BOPIS). By the end of last summer, the share of retailers offering curbside pickup jumped to 44%. Brands that had long avoided prioritizing ecommerce, such as Costco and TJ Maxx, scrambled to set up online stores. Walmart launched two-hour home delivery in April of 2020, and Walgreens pharmacies implemented a BOPIS option in May.

Now, as lockdowns come to an end and the economy thaws out, many retailers are wondering whether these changes will stick around post-pandemic. Over the past year, 40% of Americans tried a new shopping method, and nearly three-quarters of people who have tried curbside pickup, BOPIS, or delivery want to continue using these services after the pandemic ends — presenting a challenge for businesses that had envisioned the shift to omnichannel retailing as a stopgap measure to be used only until customers could return to stores. Many retailers rely on in-store traffic to drive sales, since getting a customer in the store both reduces the chances they will opt for a competitor and increases the chances they will make spur of the moment purchases.

Furthermore, many companies have found that services like curbside pickup and same-day delivery are expensive to operate. High delivery costs can reduce profitability, and online customers are much more likely than in-person ones to abandon their carts and exhibit lower levels of brand loyalty. So, what can retailers do to meet their customers’ rising expectations for flexible, digital shopping experiences while maintaining the profit margins they need to survive?

Answering this question starts with acknowledging that not all omnichannel strategies are created equal. Our forthcoming research, soon to be published in Management Science, suggests that BOPIS in particular can help retailers boost in-store sales while still providing the experience that today’s (and tomorrow’s) customers want. That is because unlike other digital channels, BOPIS both offers the advantages of digital shopping and encourages customers to continue to engage with brick-and-mortar stores.

To better understand the impact of a BOPIS omnichannel strategy, we analyzed 49 million online and in-store transactions from a national retail chain before and after a competitor launched a BOPIS service (this research was all conducted prior to the pandemic). We found that the company’s sales dropped by 4.7% online and 1.8% in-store, and the decline in in-store sales was greater the closer a store was to one of the competitor’s BOPIS locations. This suggests that by launching BOPIS, the competitor was not only stealing the company’s online sales, but also their in-store traffic.

In addition, we also found that in-store sales of more profitable, higher-priced items experienced a greater drop than sales of lower-priced products, suggesting that the competitor’s BOPIS program was particularly effective in attracting the high-quality foot traffic of customers purchasing more expensive items. This makes sense, because while customers are generally more uncertain about buying higher-priced items online, BOPIS alleviates some of this uncertainty by enabling free and effortless returns if the customer is dissatisfied with the product at the time of pickup.

These findings are consistent with our earlier research, in which we found that after introducing BOPIS, retailers would experience a drop in online sales and an increase in in-store sales that added up to a net increase in overall sales. But why is this? There are a number of important factors at play.

One of the main advantages of BOPIS is that it enables customers to research products online and then buy them in-store at their convenience, without delivery fees or inflexible pickup times — in fact, a 2019 survey found that 48% of people who used BOPIS did so because of the lack of shipping costs. BOPIS also gives customers visibility into which stores have a given product in stock, helping them avoid wasted trips and thus improving their overall shopping experience.

Moreover, BOPIS isn’t just good for customers. Eighty-five percent of consumers who have used BOPIS say that they have made additional unplanned in-store purchases when picking up an order placed online, which is one of the main reasons that traditional, in-store shopping is advantageous to retailers. In addition, because BOPIS is more profitable than other omnichannel services, it gives retailers the opportunity to offer a small discount or other incentives to encourage customers to opt for the BOPIS option, creating a win-win for both the customer and the business.

Ultimately, foot traffic is and will continue to be the lifeblood of retail, and BOPIS can bridge the gap between the convenience of ecommerce and the profitability of in-store shopping. Given its many advantages, retailers should consider focusing their marketing efforts on promoting their BOPIS services, and they should highlight the features that consumers appreciate, such as the lack of delivery fees and the guarantee that products will arrive in their hands safe and sound. In addition, because BOPIS enables customers to examine products before leaving the store, retailers should prioritize ensuring a returns process that is as smooth as possible. One of the greatest downsides of home delivery is its notoriously difficult returns process, and so offering quick, painless returns and exchanges is one of the best ways to differentiate BOPIS from delivery (and thus keep customers coming back to stores in person).

Digital shopping has been gaining traction for years. Now, after a year of massive investment into omnichannel infrastructure, we have reached a tipping point. Customers are accustomed to online and omnichannel shopping experiences, and they are not going to go back. The good news is, leveraging digital solutions does not have to mean foregoing the advantages (both to the customer and to the retailer) of in-store shopping. Rather than trying to fight against the tide of digital transformation, our research suggests that the BOPIS approach may be the key to helping retailers engage their customers — both online and in stores.

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How to Start a Niche Foam Party Business: Kid’s Party

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Foam parties have become popular and are great fun. If you didn’t know what a foam party is, it is a party or event where participants have fun dancing amidst foam created by a machine. The machine creates bubbles of foams that envelop the place, creating a fun environment at the party. If you are a business person, then a foam party business is a great idea.

You can get a foam machine and use it to throw foam parties and make money from it – relatively affordably.

photo credit: Roaring Foam

Can you make money through foam parties?

Yes, you can make money if you have a foam machine. Parties are common, and party-goers get bored with the usual stuff. A foam party is an innovative way of partying. It allows participants to let go, dancing in joy amidst the foam. This kind of party would be popular, and you can make money by offering a different experience to participants.

Creating a niche market

When you want to make money from a business, you will find that there are many others with the same idea. You need to do something different so you can succeed. This is where finding a niche market helps. A niche market is a specific category to which you can cater. Kids Foam Party is such a niche market. While there are many businesses catering to foam parties in general, foam parties for kids is a niche idea. This is a business idea that can help you succeed and make money.

Planning your business

Now that you have found your niche, it is important to plan your business before you get started. The first thing is to be clear with what you are offering. You are offering a foam party, which is an event where there is a dance floor filled with suds. When this party is offered for kids, they will enjoy it the most. They would not only dance but play in the foam and have a great time in general.

Taking proper safety precautions like setting the depth of the foam and insisting on face coverings ensure there are no problems.

What do you need?

It is obvious that you need a foam machine if you plan to run foam parties. A foam machine is not too expensive. However, you need not buy one immediately. Since you are starting off with a new business, you can get a foam machine for rent. This is a cheaper option allowing you to rent a machine and use it whenever you need it. This will allow you to do a pilot run of your party business.

If the response is good and you start getting many events, then you can consider buying your own foam machine. This would work out better for you.

Kid having fun in foam
photo credit: Roaring Foam

Planning and executing foam parties for kids

With these basic concepts in mind, it is time you start planning your parties. Since you have chosen the niche of foam parties for kids, you need to explore different options. You can have foam parties to celebrate birthdays. There can even be parties for no reason but just to allow kids to have fun. Explore different themes for foam parties and plan the events.

Here are a few considerations to keep in mind while planning and executing foam parties for kids:

  • You need to find a venue to host the foam party. The ideal location is outdoors, so the foam does not create a mess inside. When the weather does not permit, you need to find indoor venues with a fairly big hall to organize the event.
  • Apart from the machine, you need the foam solution to create foam. You need to have sufficient foam machine solution to last the entire party.
  • Safety is a very important issue in foam parties. This is all the more important when you are dealing with kids. You need to have a clear plan for ensuring safety in your foam party. Communicate the plan with your clients so they are assured of the safety arrangements.
  • If you are doing the party indoors, you need a tarp to cover the floor and walls. It is important to cover up all the electric and other outlets to avoid them being damaged.
  • Placing plastic furniture is better since it won’t get damaged due to bubbles.
  • Safety arrangements for the kids are very important. Wearing shoes is a must. You can insist on goggles or face coverings to prevent allergies from the suds. You need to take adequate precautions to prevent kids from skidding and falling during the party. There is always a risk of accidents at a foam party, and you need to do everything to prevent it.
  • Preferably, get a waiver from guests to protect against liabilities.

With all this planning, you are now ready to execute foam parties and make neat profits from them.

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What open source-based startups can learn from Confluent’s success story

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It’s common these days to launch an enterprise startup based on an open source project, often where one the founders was deeply involved in creating it. The beauty of this approach is that if the project begins to gain traction, you have the top of the sales funnel ready and waiting with potential customers when you move to commercialize your business.

In the past, this often meant providing help desk-style services for companies who appreciated what the open source software could do but wanted to have the so-called “throat to choke” if something went wrong. Another way that these companies have made money has been creating an on-prem version with certain enterprise features, particularly around scale or security, the kind of thing that large operations need as table stakes before using a particular product. Today, customers typically can install on-prem or in their cloud of choice.

“A key aspect of these kinds of technology-developer data products is they have to have a combination of bottom-up adoption and top-down SaaS, and you actually have to get both of those things working well to succeed.” Jay Kreps

In recent years, the model has shifted to building a SaaS product, where the startup builds a solution that handles all the back-end management and creates something that most companies can adopt without all of the fuss associated with installing yourself or trying to figure out how to use the raw open source.

One company that has flirted with these monetization approaches is Confluent, the streaming data company built on top of the open source Apache Kafka project. The founding team had helped build Kafka inside LinkedIn to move massive amounts of user data in real time. They open sourced the tool in 2011, and CEO and co-founder Jay Kreps helped launch the company in 2014.

It’s worth noting that Confluent raised $450 million as a private company with a final private valuation in April of $4.5 billion before going public in June. Today, it has a market cap of over $22 billion, not bad for less than six months as a public company.

Last month at TC Sessions: SaaS, I spoke to Kreps about how he built his open source business and the steps he took along the way to monetize his ideas. There’s certainly a lot of takeaways for open source-based startups launching today.

Going upmarket

Kreps said that when they launched the company in 2014, there were a bunch of enterprise-size companies already using the open source product, and they needed to figure out how to take the interest they had been seeing in Kafka and convert that into something that the fledgling startup could begin to make money on.

“There have been different paths for different companies in this space, and I think it’s actually very dependent on the type of product [as to] what makes sense. For us, one of the things we understood early on was that we would have to be wherever our customers had data,” Kreps said.

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5 Hobbies That Make Money and How To Get Started

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Money-making hobbies range from walking dogs to blogging to creating and selling homemade goods.

Read about these profitable hobbies, as well as what you can expect to make.

1. Driving

Enjoy cruising around town? Give others a ride and make money by becoming an Uber or Lyft driver. Uber drivers make an estimated $5 to $20 an hour, and Lyft drivers earn about $5 to $25 an hour, according to SideHusl.com, a review site for money-making platforms. Note that earnings depend in part on when, where and how often you drive.

To become an Uber or Lyft driver, you must be the minimum age to drive in your area. You must also meet specific requirements related to your driver’s license, insurance and vehicle. Learn about these exact requirements in our guide to becoming an Uber or Lyft driver.

If you enjoy driving but don’t want people in your car, look into becoming a full-service Instacart shopper, which involves shopping for and delivering groceries. Uber Eats and Amazon Flex also offer opportunities to deliver food and other products to homes. Each of these gigs has its own set of requirements, though, so do your research before signing up.

2. Caring for dogs

If your favorite hobbies involve belly rubs, smooches and long walks in the neighborhood, try Wag or Rover. These apps enable you to walk, dog-sit or board pups overnight for money.

Rover and Wag work in similar ways. They both require you to be at least 18 years old, pass a background check and meet other requirements. For both, you create a profile, set your own rates, and use the app to choose which gigs to take. (See our Rover vs. Wag comparison for more specific sign-up and payment information, as well as how the apps vary in the services they allow.)

On both apps, the amount you earn depends on what you charge, how much you receive in tips, and which types of services you provide. As you would guess, boarding typically pays more than walking a dog, for example. But both companies take a bite from your earnings. Rover charges a 20% service fee per booking, and Wag takes 40%.

3. Blogging

If you have a blog that gets decent traffic, try making money from it. Blogging for money can take a few forms. One way is to host ads on your blog through a service like Google AdSense, which is free. Here’s the gist, according to Google: If your website is approved, then you choose where on it you would like ads to appear. Then advertisers bid to place ads where you designated, with the winner’s ads appearing in that spot. (People make money on YouTube through the same service.)

You earn some money when a reader clicks on one of these ads — but determining exactly how much you’ll make is tricky. Explore our guide to Google AdSense to learn more about it.

You could also try writing sponsored content, meaning companies pay you to write about their products. Or, become an affiliate through the Amazon Associates program. That involves linking to an Amazon product from your content and earning a commission when one of your readers clicks through and buys that item. Learn more about how to make money on Amazon through your blog.

4. Posting to social media

Love posting to social media and building a following? On Instagram and TikTok, many users earn money through sponsored photos and videos. Say you regularly post about your at-home exercise regimen. You may agree to post about a retailer’s resistance bands or sweatpants in exchange for cash or free products. (Sponsorships and affiliate marketing are also ways to make money from podcasts, in case that’s one of your hobbies.)

Sponsors may reach out to you to set up this kind of arrangement; you could contact them; or, in some cases, you may consider working through a third-party agency.

The type of content you post, as well as your number of followers and their engagement, will likely impact sponsorship opportunities. Learn more about how to make money on Instagram or on TikTok.

5. Selling your wares

There’s a marketplace for just about everything. So if you’re skilled in a hobby, consider trying to profit from it. For example, if you create jewelry or have an eye for thrifting quality clothes, try selling those items at a local flea market or yard sale, or on a neighborhood website such as Nextdoor or Facebook Marketplace.

Or look into an online market that could attract a wider range of buyers. Consider Etsy for crafts or Poshmark if you want to sell clothes online.

These websites charge fees that will cut into your profits. This guide to selling stuff online will help you think through the math and determine if your hobby can become a viable business.

What to consider before making money from your hobbies

Before taking any of the routes listed above, keep in mind that this work will likely affect your taxes. See our guide to self-employment taxes, which includes expenses you can deduct, and how to avoid penalties.

And as you aim to profit from your hobbies, consider whether you will continue to enjoy them through this new business lens. Let’s say knitting helps you relax. Will it continue to do so if you’re pricing, promoting and shipping your homemade wares through an online marketplace? And that blogging hobby: Will writing still be fun or cathartic if you’re occasionally throwing in a sponsored post?

It may be hard to answer these questions until you give the money-making approach a shot. But it’s worth reflecting on the potential trade-offs as you think about turning your hobby into a job.

Money management made easy

NerdWallet tracks your income, bills, and shows you ways to save more.

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