A favourite among retailers and customers alike. Very much a staple of the British high-street, and according to recent reports showing few signs of slowing down. By 2020 it is estimated the value of Click & Collect purchase will grow by 78% to a value of £8.2 billion per year (JDA and Centrino, Customer Pulse Report 2016). With several leading retailers reporting more than half of online orders being collected in-stores, eyes from overseas markets are certainly on the UK amongst those looking for tips to supercharge their own offerings. For UK and overseas retailers alike, follow these simple recommendations to get the most out of your Click & Collect offering:
To charge or not to charge?
Perhaps the biggest decision a retailer needs to make is whether to charge for Click & Collect delivery. Click & Collect emerged almost universally as a free delivery cost option for customers, with retailers offsetting the loss of income generated from delivery charges against the value of store footfall and increase in incremental purchases once customers were in-store. However, over the last 18 months we have seen a growing number of retailers beginning to introduce minimum spend thresholds – pointing to the fact that despite its popularity few retailers are able to run such schemes profitably. Our Delivery and Returns Index, issued earlier this year, suggested that 19% of leading UK multichannel retailers are charging for Click & Collect, with an average qualifying spend of £26.66, which is less than half the qualifying spend compared to free home delivery. For many retailers the decision to charge or not will be driven by likely customer reaction, and the impact on bottom line financials.
- Customers: A survey we recently commissioned in conjunction with Imperial Business College London surveyed millennials on their attitudes towards Click & Collect. The single biggest factor contributing towards a positive experience was the lack of delivery charge, with 50% of respondents ranking this as the single most important factor. Similarly, data from JDA states that 57% of consumers expect such a service to be free. Clearly expectations have been set among customers who have been accustomed to such services being readily available without charge.
- Financial impact: The introduction of low minimum qualifying spends indicate that retailers are hesitant to penalise customers, yet struggle to make such programs work for the lowest value orders. With so many Click & Collect offerings reliant upon shipping stock from central warehouses into stores for collection, as opposed to utilising stock already sat in stores, there is a minimum cost that retailers must cover. As schemes develop further we expect more and more retailers to switch to hybrid models, which use a combination of store stock and central warehouse located stock to fulfil such orders, thereby allowing retailers to drive efficiencies and offer Click & Collect delivery at low or zero cost to more customers. With 31% of consumers indicating they would switch to a competitor if charged for Click & Collect, this is a clear competitive advantage to be maintained.
Clear understanding when orders will be ready to collect
Nobody likes waiting at home all day and then missing the delivery man, which is one of the biggest reasons for the popularity of Click & Collect. Our millennial survey indicates that having a clear understanding of the time and date of Click & Collect order availability remains the second biggest satisfaction factor. Having personally used Click & Collect options from several retailers, on occasion I’ve been underwhelmed by the lack of an estimated arrival time. Given that customers will often chose to plan their parcel collection around their workdays – maybe popping out of the office at lunch, on the way to catch the train home, or just before the school run – it is somewhat surprising that parcel arrival/collection times are not more clearly indicated.
Optimise in-store processes
While some retailers are optimising the experience with dedicated collection desks and clear signage, others are lagging behind. Waiting in a queue to collect your parcel, and even waiting some more while the item is collected from a stock room or back-office location, is clearly going to frustrate time poor shoppers. The third biggest satisfaction driver in our survey was the avoidance of such waiting times in-store. Retailers not only need to think about making the collection process easy, but also how they can maximise the up-sell opportunity. Store footfall is a valuable commodity, and every incremental pound that they can draw from Click & Collect shoppers will go a long way towards making omnichannel more profitable.