The State of Click and Collect in 2020
In the arms race for fast and cheap home delivery options, it is the final mile of a package's journey which causes the biggest headache for retailers serving the ecommerce space.
The final stages of delivery usually rely on third party carriers and can lead to increased costs, reduced efficiency, a lack of transparency, and issues around security and damage. One need only take a brief look at the comments on any parcel carrier's social media accounts to see long lists of complaints revolving around packages being left at the wrong address, left out in the rain, missing entirely, or heavily damaged.
One way in which retailers are tackling the issue of the last mile is with click and collect, where customers arrange to have their package left at a separate location — usually a supermarket or other business premises — for them to pick up at a convenient time.
Click and Collect
You've probably already used click and collect services yourself but, if you haven't, you will surely have noticed a bank of Amazon lockers at your local supermarket. While it may seem counterintuitive to invite the retail industry's biggest disrupter through your doors, click and collect partnerships such as this enable physical retailers and ecommerce brands to establish a symbiotic relationship that benefits both sides of the arrangement.
The ecommerce retailer gets to cut down on the costs associated with the last mile of delivery and make sure that packages get to where they need to go without having to worry about whether the recipient is going to be home or that the courier responsible for the drop-off is competent. The physical store will often help with facilitating returns as well, saving customers the headache of packaging goods up and sending them back themselves. Returns can be processed onsite and refunds often authorized at the same time.
In return, the physical retailer benefits from increased footfall at their store and the opportunity to market their own products or services to those customers arriving to collect packages. Over a third (34%) of retailers have reported an increase in revenue following the establishment of a click and collect service.
"Not only does Click and Collect offer merchants the opportunity to increase sales, [but] our research shows it can improve the overall customer experience as a complement to online shopping, while reducing return volumes too," said Director of Barclaycard Payment Solutions, Kirsty Morris. "With the retail sector facing unprecedented challenges, investing in Click and Collect partnerships should be part of a long-term strategy for retailers to encourage shoppers into stores and respond to the changing shape of the nation's high streets."
However, while click and collect is paving the way for exciting new partnership opportunities, it's not all peaches and cream, and the service is not without its own issues.
The main issue with click and collect is the convenience. Traveling to a supermarket to pick up a package is never going to be as quick and easy as having it brought to your home address. People live busy lives, so collecting a parcel can very quickly slip down the list of priorities.
This issue has led to recent figures from the UK that around PS276 million ($360 million) worth of click and collect orders are never picked up by their intended recipient. Despite 71% of people opting to use click and collect, that's a remarkable figure. The hassle of click and collect is cited as the main reason in about 30% of cases, with other reasons including long wait times (25%), poorly staffed collection points (25%), struggling to find the collection area (17%) and having to pay for click & collect (15%).
These items must then be collected for return to warehouses or redirected to another fulfillment channel — adding more costs to the physical retailer and the ecommerce supplier.
Some retailers have been experimenting with alternative delivery solutions, including delivery to the workplace, home lockers, and even deliveries to the customer's car trunk. However, for the time being, well-managed click and collect is proving to be a lucrative endeavor despite its challenges.
"One way for retailers to boost the attractiveness of click & collect in particular, is to offer shoppers the chance to try the products before leaving the store," added Morris. "Enhancing the click & collect experience is a potentially lucrative way for retailers to ward off the unprecedented challenges of the high street and bridge the gap between online and in-store shopping."
Click and collect is sure to be a hot topic at eTail Europe 2020, being held in June at the Queen Elizabeth II Conference Centre, London.
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