By 2018, the UK will see one in five retail stores close. Dramatic predictions and something the Centre for Retail Research has dubbed the ‘growing retail crisis’. But, with UK consumer spending intentions having risen for the fifth consecutive quarter and click and collect growing by 20% each year, could internet retailing buck the trend and help bricks and mortar stores to weather the storm?
Click and collect has played a huge part in bricks-and-mortar survival, but its development has been gradual. In the 1960s housewives were dropping off their shopping lists at the local grocers for collection but it wasn’t until the 1980s that Argos stepped in with catalogue shopping.
It was when the first pick up and drop off (PUDO) click and collect delivery service (Collect+) hit the UK that opportunities really opened up. It’s easy to forget that Collect+ was seen as truly ground-breaking at the time and that it faced a huge deal of resistance from the retail industry.
Brands just didn’t want to be associated with petrol stations and cornershops, and it took a long time for the industry to realise that online and offline could coexist relatively peacefully. PUDO was instrumental in that realisation, as a means of physically unifying the two sides of retail.
The range of current click and collect providers now include big hitters Hermes, Parcelshop, DPD Pick-Up and Pass My Parcel, who all cottoned on to the benefits quickly.
We’ve seen a shift in attitude as retailers understand that letting shoppers pick their purchases up in-store, or using their stores as collection points for other retailers doesn’t need to be a static, unprofitable service, offered begrudgingly. It can be a chance to bring in extra sales and create good customer experiences in a way that only offline retailing can provide.
Capitalising on cornershop convenience
Combining elements of click and collect and PUDO, Asda announced in November 2015 that all of its 614 stores could be used as collection points for orders from other retailers – with fashion brand Missguided quick to sign up. It’s a savvy move that the supermarket giant hopes could bring in as many as 40 million extra shoppers per year by 2019.
It’s become a case of getting the parcel to a location that’s as accessible as possible for the consumer. More often than not, that location is no longer a high street store, and we’ve seen this reflected in the rise in popularity of locker delivery and services like Collect+ capitalising on the convenience of petrol stations and local shops.
So how do we grow from here? The industry needs to tackle the consumer perception that click and collect should be a free service. While the technology is helping to save retailers money, there’s no doubt that it’s still a challenge to margins. Marc de Speville, the founder of Strategic Food Retail, told the BBC earlier in the year that even Tesco’s £4 charge for collecting is just a contribution towards the supermarket’s costs of providing the service.
Increased costs was the reason John Lewis decided to introduce a charge for click and collect orders in July. With the retailer processing more than six million click and collect orders per year, providing a free delivery service was ‘unsustainable’, MD Andy Street said at the time.
And with a 4.8% increase in like-for-like sales in the five weeks up to Christmas 2014 and a six fold increase in click and collect orders the year prior, it’s clear that there’s a tangible relationship between the two.
What’s the future for click and collect?
There are some important questions that need to be answered. In recent weeks, we’ve seen the increased expansion of Amazon’s Prime Now service, which puts items in customers’ hands within an hour. Click and collect is designed around convenience, but so are same-hour delivery initiatives. Will click and collect still have a future in the UK retail landscape as same-day, next-day and peer-to-peer deliveries become the norm?
Having seen retailing move from offline to online, then back to offline with click and collect, could the new trend of ‘click and don’t collect’ – where customers who’ve ordered to pick up change their mind later and opt for delivery – be forging a new path for online delivery?
Fluid relationship between online and offline
One thing we’ve learnt over the last decade is that it isn’t possible to reduce the evolution of retailing down to a simple correlation between the rise of the internet retailer and the death of the store. The fluid relationship between online and offline is what makes retailing so exciting.
With millennials set to represent three quarters of the global workforce by 2025, it is this group of shoppers’ delivery preferences that we should be looking to for guidance on which direction to steer the industry in over the next decade.
75% of millennials rank convenience in delivery as the single most important factor when choosing between retailers, so the value of click and collect is obvious.
We need to make sure that we continue to integrate click and collect as well as educate shoppers on how these services will make their lives easier. Crucially, I think we also need the technology to evolve with these services and ensure that we’re able to offer in-flight delivery changes for ‘click and don’t collect’ users to make it work effectively for retailers.
The Collect+ service model must also be willing to innovate somewhere – for example, increasing the capacity at petrol stations and cornershops, as well as broadening the places customers can collect from. How about picking up a parcel on the train home from work or at the local pool after a swim?
What do you think? What do you predict to be the next big thing in click and collect?
Photo credit - Walter Baxter