Analysis

The future of click-and-collect: collaboration, convenience, and customers

One of the biggest influences on shoppers in 2015 is the provision of convenient collection points for online purchases, according to retail analysts Planet Retail. With around half of global shoppers looking for convenient pickup points, “click-and-collect is no longer a nice-to-have, it’s now a prerequisite.”

Even those retailers that have been slow to adopt it previously are now turning to click-and-collect, such as IKEA.

And so, with fulfilment very much a key retail battleground, in this extract from ‘The Future of Retail – 10 trends of tomorrow’, Planet Retail’s retail insights director, Natalie Berg, looks at what’s next for click-and-collect.

Natalie Berg, Planet Retail

Natalie Berg, Planet Retail

Planet Retail research shows that half of global shoppers are now influenced by a retailer’s ability to offer convenient collection points for online purchases. Click-and-collect is no longer a nice-to-have, it’s now a prerequisite.

As such, retailers that have long resisted – IKEA, for example – are now placing click-and-collect at the heart of their strategies. The benefits are clear. From a shopper’s perspective, it eliminates the risk of missed delivery and ensures stock availability. From a retailer’s viewpoint, it is a more cost-effective option than home delivery and generally results in additional shopper spend.

So what does the future hold for click-and-collect? One only needs to look to the UK, the world’s click-and-collect hotbed, for inspiration.

The need for collaboration is very much a recurring theme throughout our 10 Future Trends, and click-and-collect is no exception. Today in the UK, schemes such as CollectPlus are well established and shoppers are accustomed to collecting their online orders at alternative locations.

The real shift we are now seeing is that retailers are beginning to perceive the benefits of working together to improve the overall customer experience. The eBay/ Argos effect,
is slowly beginning to trickle down across sectors. For example, Asos shoppers can now collect online fashion orders at selected Boots pharmacies, once again highlighting the need for pure-play operators to have
a physical presence. Similarly, Halfords and selected pharmacy chains are participating in the new DPD Pickup scheme, which allows shoppers to collect online orders at other retailers’ stores.

The key is to collaborate with a non-competing chain that shares an overlap in customer demographics, thus allowing the retailer to benefit from increased footfall and shopper satisfaction without the risk of sales cannibalisation. It’s for this reason that we are expecting more retailers competing in different sectors – e.g. fashion and beauty – to join forces in the name of providing superior customer service.

We also anticipate continued investment in alternative third party pick-up locations. Westfield’s CollectPlus lounge, Asda’s collection pods (the UK’s first 24/7 grocery click-and-collect point) and services such as Doddle are all fantastic examples of how retailers should be prioritising the customer experience. In the future, we believe opportunities exist to get even closer to the consumer with collection points being made available on high streets, schools, leisure centres and other community buildings.

That said, attempts to target on-the-go shoppers, and commuters in particular, have thus far met with limited success. There are enormous logistical and security issues to overcome and, in some instances, we simply don’t believe that genuine demand for such services exists. For example, Tesco and Sainsbury’s recently discontinued a partnership with Transport for London that allowed shoppers to collect grocery orders at the end of their London Underground commute. In our view, this was never going to succeed for two reasons. One, online grocery orders that are limited to what shoppers can physically carry home defeats the purpose, and two, the prevalence of convenience stores would constrain and negate demand for a click-and-collect service.

It may not work for grocery, which is inherently
more complex due to the perishable nature of the category, but we see significant opportunities to target commuters with a click-and-collect service for non-food items. In the UK, retailers like John Lewis and Argos have launched dedicated click-and-collect stores at rail stations (St Pancras and Cannon Street, respectively). Boots has offered the service in airport and rail station stores for some time while Marks & Spencer has
just announced plans to roll out click-and-collect at its franchised travel retail locations. Meanwhile, fulfilment specialist Doddle is pioneering the ‘click-and-commute’ trend by building out an independent network of parcel shops across UK rail stations.

In summary, we believe that click-and-collect has a very healthy future instore. Retailers must remember that it is no longer a differentiator; shopper expectations continue to rise, putting even greater pressure on companies to provide a best-in-class service. Retailers must follow their own golden rule by putting the customer first. This may mean collaborating with some unconventional partners to improve speed and quality of service while providing additional choice for customers.

 

Click here to access your own full copy of ‘The Future of Retail – 10 trends of tomorrow‘ from Planet Retail.