Click and Collect or get left behind

By Bright Masih, Retail Account Director, Black Pepper Software.

This article is brought to you by Retail Technology Review: Click and Collect or get left behind.

Click and Collect is now the third most popular digital service in the UK. Shoppers are embracing the flexibility the service offers and retailers are keen to simplify a customer's purchasing journey.

With Click and Collect services expanding, deliveries direct to a consumer's address are set to decrease from 72.3 per cent to just over 64 per cent of total physical deliveries by 2018, whilst Click and Collect volumes are anticipated to rise from 26.1 per cent to just under 35 per cent.

Customers demanding click and collect

Initially, online shopping and home delivery were seen as the future of the retail industry; however, this is no longer the case. The unpredictability and inconvenience which can sometimes occur with home deliveries has led consumers to look for more convenient and flexible ways to receive their purchases.
A Barclays report has revealed just under 70 per cent of consumers believe couriers should deliver on a Sunday, and almost 45 per cent would order online if delivery services were improved. To cope with the new demands from consumers retailers need to provide alternative solutions to shoppers to remain competitive.

Click and Collect services are an example of this. The service empowers the customer to choose exactly which store to deliver the purchases to and when they can collect it. More than 50% of British shoppers are now picking up online orders in-store, up from 45 per cent in the last year. Retailers ignoring these stats could risk being left behind in a competitive market place.

Opportunities for incremental revenue

Alongside creating a seamless journey for Click and Collect purchasers retailers should not ignore the further potential of this offering. By drawing the customer in store for their collections retailers should utilise the opportunity to encourage shoppers to buy other products they may need in addition to providing shoppers with live data of other options available to them whilst online. 24 per cent of retailers see Click and Collect as an area which can provide massive growth opportunities for a business, with over 16 per cent of logistics companies considering development of Click and Collect services.

Following the Christmas period in January 2016, CollectPlus, the UK's largest independent store-based delivery and returns service, revealed 2015 saw its biggest Click and Collect Christmas to date. The industry analysts predicted a 12 percent growth in online sales compared to Christmas 2014, but CollectPlus exceeded this prediction, with it's Click and Collect services growing by 27 per cent.

Over 428,000 new customers began using the CollectPlus Click and Collect service during October - December, with December's total increasing 15 percent from 2014.

Omni-channel is critical

For a retailer to provide a successful Click and Collect service to its customers, it must create a seamless omni-channel journey. Retailers must ensure this experience, from start to finish, is enjoyable and hassle-free for shoppers.

Debenhams experienced the repercussions of not strengthening its omni-channels after reporting a fall of 24.5 per cent in its pre-tax profit to £85.2 million for the half year to 1st March 2014. By the following month, Debenhams had already announced plans to increase its investment in automated systems in its distribution centres to support developments in its omni-channel offering.

By increasing automation, Debenhams wanted to reduce the per unit cost of fulfilling online orders, particularly around its Click and Collect offering. This was successful with Click and Collect accounting for 24 per cent of the retailer's online orders during the period, compared to 7 per cent of orders in the same period in 2013.

Having an excellent omni-channel approach requires retailers to also integrate their live stock taking system with their e-commerce platform. This way, if a customer cannot find their size of clothing in store, it is essential for the customer to see live data of other options online. This can be seen with Argos who have successfully integrated the two platforms to provide this service to customers, with internet sales accounting for 46 per cent of total Argos sales, it was crucial to ensure both instore and online platforms were combined.

Christmas' omni-channel services were the driving force behind the in-store footfall This is reflected in the ONS Retail Sales report for January 2015 which showed online weekly spending rose to £753.3m, as e commerce grew 12 per cent. This is not new news. Retailers are rapidly recognizing an omni-channel approach is key but the challenge posed is how they embrace this and do so fast.

Argos is quite advanced in this area. It knows where all its stock is, whether it is in the distribution centre or in one of its 700+ stores, and is now offering same day delivery and faster in-store collection with Fast Track. You can now buy online and get your order delivered the same day for £3.95, seven days a week, with Fast Track Delivery or buy online and collect from the Argos dedicated Fast Track counters in-store, in as little as 60 seconds. This responsiveness to customer needs lies at the heart of retail success going forwards.

The future

Retailers wishing to remain competitive need to keep customer focused and embrace the opportunities Click and Collect services can bring.
The Click and Collect scheme is still increasing with 38.2 per cent of retailers expecting this figure to grow more in terms of usage than any other delivery option. 22.6 per cent of retailers anticipate third party Click and Collect services will increase the most, and just over 17 per cent expect to see a rise in the use of lockers and collection points.

If retailers utilise the omni-channel approach to its Click and Collect services and are able to create a seamless journey from start to finish it will result in a successful shopping experience for customers and a competitive strategy for the business going forwards.