The grocery fulfillment wars have a winner: Buy Online, Pick Up In Store (BOPIS) dominates as the preferred model, beating home delivery on economics and customer satisfaction.
Source: Placer.ai, The Financial Times
The data confirms what grocery economics suggested: last-mile delivery is too expensive for low-margin grocery products. BOPIS eliminates delivery costs while maintaining online convenience—a hybrid model that works for both retailers and customers.
Home grocery delivery typically costs $10-15 per order in fulfillment. BOPIS costs $2-4. For a business with 2-3% net margins, the difference is existential. Customers, meanwhile, increasingly prefer the speed and reliability of picking up orders themselves.
This represents a business model innovation emerging from constraint—finding the fulfillment approach that works given grocery’s fundamental economics.
Strategic Implications
Retailers with strong store networks gain advantage; pure-play delivery models face structural challenges. The omnichannel approach—leveraging stores as both retail and fulfillment locations—proves superior to either pure-physical or pure-digital models.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
