Analysis

Christmas click-and-collect capacity constraints cause concern

Anyone raking over the coals of last week’s set of results from M&S may have spotted the reference to click-and-collect.

Almost two thirds of all online Christmas orders taken by M&S were routed for click-and-collect.

m&s C&C

That’s a huge proportion, and echoes the experiences of the last Christmas period, where a heavy reliance on click-and-collect helped ease the already significant burden from retailers’ home delivery networks.

Another stalwart of the UK retail sector, John Lewis, reported its “Magna Park distribution centre dispatched record levels of click-and-collect orders on Boxing Day ready for collection the next day” with 35% of online orders over the Christmas period being collected from Waitrose stores. Similarly, House of Fraser reported use of its Buy & Collect service was up 22% on last year.

As other retailers issue trading statements for the Christmas peak period there’s every reason to expect high levels of click-and-collect usage across the sector.

However, the Christmas Customer Pulse report from JDA and Centiro points to a problem with click-and-collect capacities that is leaving shoppers’ less than delighted. According to their research, which was carried out by YouGov, 36% of Christmas click-and-collect shoppers experienced issues with their orders. Chief among those issues were:

  • Retailers not having a dedicated area in-store for click-and-collect purchases (31%)
  • Long waiting times (31%)
  • Staff being unable, or taking a long time, to locate items (24%).

Unsurprisingly, more than three-quarters (77%) of UK shoppers said they would be likely to switch to shopping with an alternative retailer next Christmas as a result.

“While online retail continues to see unprecedented growth in the UK, Christmas shoppers continued to be plagued with problems concerning their online orders. While issues with home deliveries are nothing new, more worrying for many retailers is that this Christmas exposed cracks in their click-and-collect operations,” said Jason Shorrock, vice president of retail strategy at supply chain management consultancy JDA.

Jason Shorrock, JDA

Jason Shorrock, JDA

“Shoppers are showing a growing preference for click-and-collect as it offers them the convenience they crave and it is vital that retailers get it right.  However, without the effective management of staff, stores and inventory, retailers risk damaging customer relationships. Ironically, at a time when the online channel continues to grow, the in-store experience is becoming ever more important. As the survey findings show, today’s online customer has no qualms about taking their business elsewhere if retailers don’t meet their expectations.”

Of those respondents that used click-and-collect services this Christmas, 24% said they intend to use it more widely next Christmas. More than half (56%) said they used click-and-collect to avoid delivery charges, while 49% said it was more convenient than home delivery. A quarter of online Christmas shoppers said they chose to shop specifically with a retailer that offered click-and-collect over one that only offered home delivery.

“Today’s online customer is now demanding shorter order-to-delivery windows and greater choice over where and when goods are delivered.  For retailers, this means ensuring they have full visibility over their inventory and their delivery networks.

Niklas Hedin, Centiro

Niklas Hedin, Centiro

In the lead up to Christmas, many retailers added much more delivery capacity to deal with spikes in demand, but it is clear customer expectations still aren’t being met. It is also evident that retailers need greater insight into their carrier networks so they can offer more flexible and convenient delivery options,” said Niklas Hedin, CEO of Swedish logistics management software firm Centiro.

These findings are in broad alignment with the ongoing research from eDelivery’s colleagues at InternetRetailing, researching the next IRUK Top500 report.

As we reported in November, increased logistics capacity is now a key battleground for retailers fighting over that most elusive of prizes … consumer loyalty; especially among younger shoppers.

The big increase in retailers offering Sunday and nominated-time delivery is emblematic of the way in which innovative companies seek to match a niche demand.

In turn they are likely to change the expectations of a majority of consumers and we shouldn’t be surprised to see mass adoption of Sunday delivery, for example, in the coming years, but that’s speculation. The IRUK500 2016 will be published in the next few weeks with the European version, the IREU500, due to follow in March.

 


Main image features an Asda ToYou collections point. (Image supplied via Asda’s press office)