Running a retail business is not unlike pushing a boulder uphill while trying not to break the eggs in the bowl you are balancing on your head. It takes equal parts strength, endurance, balance and ingenuity to reach the top. “Click-and-collect” is an essential tool for retailers — it can carry your bowl of eggs so you can focus on the rock.
Over the past decade, retailers have discovered the benefits of giving customers a choice of channels. But as retail evolves beyond omnichannel, customers are evolving, too, both in their comfort level with technology and in their path to purchase.
More than 68% of online shoppers have used click-and-collect services. Last Christmas, one third of all U.S. online sales were derived from click-and-collect, up from 22% in 2017. This is a service that shoppers clearly enjoy.
What Customers Want
Shoppers no longer follow traditional demographic-driven purchase paths. Increasingly, people are living in multigenerational households, with shopping decisions being made with input across two or three age ranges. Additionally, a vast array of web sites, videos and other sources have expanded the consideration stage of a purchase. But with increased time and complexity during the consideration process, it becomes even more crucial to shoppers that the purchase process be ultra-easy to complete once their choice is made. Click-and-collect allows customers control over when and where.
Home deliveries are fraught with uncertainty. Will the package arrive on time? Will I be home? Will it get rained on? Will it be stolen? Furthermore, if the product doesn’t meet expectations, the returns process requires a high level of effort by the shopper. Repackaging, printing the label, driving around with it in the trunk for two weeks before mailing — I’m speaking from personal experience here.
Click-and-collect can reduce purchase hesitancy by removing concerns over the returns process. Customers frequently order multiple sizes of shoes and clothing, keeping what fits and returning the rest. What if they could try on items when they come in for order pickup and then walk out with what fits and simply leave behind the rest? Not only is that convenient for the shopper, but it also reduces the damage or restock delays that affect a retailer’s chance for a full-price resale.
Adding to the convenience factor, companies are increasingly offering multiple pickup location options by partnering with other retailers. Amazon collaborated with Kohl’s and Rite Aid; UPS delivers to CVS, Michaels and Advance Auto Parts; and Nordstrom and Walgreens have allied with Narvar to allow customers to pick up or return from any location in the Narvar concierge network.
And for high-urgency products, when even the fastest shipping isn’t enough, it is important for a customer to know that an item will definitely be available without risk of having to visit multiple stores to find a product in stock.
Up to 50% of respondents chose where to buy based on which retailers allowed them to order online and pick up in-store, according to a survey by Doddle. As retailers refine their click-and-collect capabilities, this number will only rise.
What Retailers Need
Although click-and-collect began as a response to customers’ increasing demand for convenience and speed, enough data has been accumulated to underscore that this service is a huge financial win for businesses.
First, click-and-collect reduces shipping costs, the benefit of which can increase an item’s profit margin. A retailer that would make a 25% profit on a shipped item would make a 33% profit from a click-and-collect product. Additionally, click-and-collect reduces returns. A study by OrderDynamics found that frequent click-and-collect users made significantly fewer returns, averaging only 19 returns per year. That’s money in the bank.
Even more benefits emerge given that 85% of customers buy other items when picking up in-store, so not only is this service a fan favorite, but it also improves the retail bottom line.
Offering this service also builds a strong level of trust and appreciation with customers, increasing their lifetime value for the retailer. This last point is critical: the U.S. population is growing at less than 1% annually, its lowest level since 1937. Our current retail growth models are no longer viable. Future growth will come from keeping customers rather than finding new ones.
I had the privilege of working with Aramark in 2009 on the design and rollout of a campus convenience store concept called Provisions on Demand. The goal was to create a store where students could not only buy what was in the store, but also order anything else they needed for delivery. Need a microwave? A pound of hamburger? A sofa? Buy it from your campus POD store, and the staff will source, order and deliver it, either to the store or to your dorm. Aramark’s aim was to become an integral resource for students, who often had limited shopping choices if they didn’t have a car. I didn’t realize it then, but this was my first experience with click-and-collect.
Click-and-collect is not a trend; it’s a reality. And it is one of the rare tools in the retail toolbox that is as beneficial to the retailer as it is to the customer.
This is going to be big. So much so that I foresee click-and-collect becoming the default order fulfillment option for online sales within the next five years, a theory supported by a Zebra survey showing that 93% of retailers expect to offer click-and-collect by 2023.
As the industry moves toward a Harmonic Retail™ business model, retailers will discover even greater benefits of building their customer service around click-and-collect to serve up convenience to shoppers and profits to the bottom line.
DeAnn Campbell is convinced that the next evolutionary era heralds a shift beyond converged commerce to Harmonic Retail™, where online and offline experiences don’t merely integrate, but they interact, enrich and react upon one another to create a living, harmonized brand expression throughout the customer journey. Campbell holds a Bachelor of Architecture, is LEED ID+C accredited and currently heads up retail strategy and research at Harbor Retail.