Analysis

Large retailers are the real convenience stores: study

delivery buzzer sign

Shoppers are gravitating toward larger retailers in search of convenience and flexible deliveries.

The growing significance of click-and-collect has been highlighted by research that shows this Christmas half of UK shoppers have chosen, or will choose, to buy from larger retailers who offer the service.

This behaviour represents a challenge to smaller independent operators who don’t offer click and collect services, according to InPost, the parcel locker company.

The study, conducted for InPost by retail analysts Conlumino, found that while Christmas gift spend is expected to hit around £8.5 billion this year, shoppers are only planning to allocate 13.2% of their Christmas budget to small or medium-sized chains and local independents.

Price (39.4%) and product range (24.6%) are inevitably the key drivers of spend, however factors relating to convenience, such as delivery and pick up options, also play a major role (21.2%) and can sometimes make the crucial difference, the study claimed.

Store-based click-and-collect services, or those involving locations such as automated lockers, will account for 7.8% of gift spend (over £700m) as almost a third (29.5%) of consumers intend to use such services this Christmas, according to InPost. However, with less than a fifth of SMEs (18%) providing this option, compared to 60% of large retailers, SMEs could lose out to the tune of an estimated £200m during this critical time of year for the retail sector.

Key findings from the report:

– click-and-collect will account for £700m of gift spend this Christmas, yet less than a fifth of SMEs (18%) offer such a service

– 50% of shoppers plan to switch to larger retailers for the festive season – spending only 13.2% of their gift budgets with SMEs and local independents

– almost half (49%) of shoppers would prefer to go to the smaller retailers

– 64% of retailers agree shoppers are demanding greater convenience of fulfillment

 

Those retailers with the potential for reach via their existing store estate will be looking to repurpose part of their supply chain to make things like click-and-collect part of their standard offering, if they haven’t already. Emerging players will need to find partners who can help them bridge some of those gaps.

The combination of that desire for convenience and recent concerns regarding some delivery networks are likely to set the agenda for 2015.