Perhaps the biggest shopping trend of 2015 was the rise of handy collection points for online purchases. Click-and-collect is now a perquisite for retailers, yet it is also in danger of becoming a full stop when it comes to overall e-commerce strategy.
Adrien Nussenbaum, CEO of online marketplace platform provider Mirakl Inc. writes on why click-and-collect should not be the end of innovation in e-commerce collection and delivery.
There is no arguing that the convenience of click-and-collect has seen it become one of the retail industry's biggest trends of the last few years. In 2014 nearly half of UK shoppers used a click-and-collect service as part of their Christmas shopping, according to research from Postcode Anywhere – and that will almost certainly increase this year.
Delivery and collection are core to successful e-commerce businesses and the ability for a consumer to buy something on their mobile in the morning and collect it or have it delivered that afternoon, should not be under estimated. Yet there have been signs in 2015 that click-and-collect has become somewhat stale, as retailers use it to show how innovative and forward-thinking they are, when it reality it is now just the norm. For some, it has become a full stop in their e-commerce strategies.
Retailers must be mindful that click-and-collect is not a differentiator anymore. Shoppers now expect flexibility in delivery and collection; loudly proclaiming a click-and-collect offering is akin to boasting of the ability to process chip and pin payments. E-commerce is extremely fast-paced and consumer expectations rise quickly, yet many retailers seem to be resting on their laurels with click-and-collect.
Furthermore, click-and-collect is not well-suited to all sectors of retail. Earlier this year Tesco and Sainsbury's pulled out of a partnership with TfL that allowed commuters to pick up groceries in tube station car parks. The benefits of click-and-collect were negated because consumers can only physically carry home a certain amount. It is actually surprising to think that that scheme got as far as it did.
Click-and-collect can also have a significant impact on returns. In a report earlier this year, Deloitte highlighted this risk, with people prone to over-ordering as they know any unwanted goods can be easily returned and refunded. This can cause a returns loop which leads to stock shortages. According to returns intelligence firm Clear Returns, this even has a name - 'Out of Stock Saturday' - which will take place on 12 December.
Innovation must continue
The tendency for certain retailers to ease up on e-commerce innovation is the most significant potential downside to click-and-collect. It is easy for retailers to implement click-and-collect and feel they have added enough new functionality to please customers. Online marketplaces are another significant area of growth within e-commerce, and innovative retailers could and should be looking to combine the two.
Marketplaces allow a retailer to offer significantly more products and keep a shopper on their site for much longer. Combining this choice and price competitiveness with the convenience of click-and-collect makes for a very potent e-commerce offering for a retailer.
It was only about two years ago that same-day delivery really came to prominence, and although we aren't there yet, drone-based delivery could well be the next wave of innovation. The point is that what was once hot and innovative can become what is the norm and expected very quickly in e-commerce. Drone delivery is something Amazon is actively looking into, and that could easily be the next big thing, with the potential to get product to consumers within a matter of minutes.
Click-and-collect in 2016
Click-and-collect undoubtedly has a healthy future and will continue to play a major role in e-commerce. But retailers must not let this restrict their innovation in other areas and should continue to look for other ways to improve the customer experience and operate smoother logistics.
Click-and-collect is not the end-game and needs to be refined and improved. This can be accomplished in multiple ways: collaborating with unusual partners such as non-competitive retailers or integrating with other e-commerce initiatives, such as online marketplaces. Retailers should always be investigating what the next phase of delivery innovation will be.