What is Click & Collect - How to Improve Retail Strategy?
Compared to traditional door-to-door delivery, click-and-collect offers shoppers greater flexibility and control over when and where they collect their orders.
This ecommerce strategy has proven to be a viable alternative for retailers looking to enhance their customer experience and streamline their operations.
Last-mile delivery makes up a huge part of the online shopping experience. Uncertain home delivery schedules or out-of-the-way addresses can make customers reluctant to buy online, especially from new brands. These are just some of the reasons why the click-and-collect model has been gaining ground within the overall ecommerce ecosystem.
In 2020, US consumers spent around $72.46 billion via click-and-collect, a 106.9% increase from 2019 (according to an Insider Intelligence report). Further, click-and-collect's share of ecommerce sales increased from 5.8% to 9.1%. The total number of those who use this method of online shopping increased by 12.9%, from 127.4 million to 143.8 million. Retail sales through click-and-collect in the US are expected to surpass $113 billion by 2023.
Image source: Statista
The numbers are similarly promising in most economies. For example, in the UK, click-and-collect orders are expected to be worth £42.4 billion in 2022, or about 8.4% of the country’s total retail spending (according to a Barclay’s report). About 41% of brick-and-mortar stores in the United Kingdom are now used as click-and-collect locations, with roughly the same proportion (41%) of physical stores able to process returns.
In this article, I present how click-and-collect works, including its benefits and challenges for retailers. This is particularly relevant to decision-makers among retail and ecommerce companies weighing whether or not to venture into this retail strategy.
What is Click-and-Collect? How does it work?
Click and collect is a service offered by retailers wherein customers can order items online (i.e. click) and pick them up at a physical location (i.e. collect). This is an alternative to the conventional order fulfilment model of having items delivered directly to the customer’s place.
So how does click-and-collect work? There are two main models offering different pickup options:
- In-store click-and-collect is exactly what it sounds like. The customer collects their online purchase at a physical store of the retailer itself. This model is also alternatively referred to as BOPIS — buy online, pick up instore. For example, when ordering through Tesco’s ecommerce website, click-and-collect shoppers pick up their groceries at a Tesco store of their choice.
- You may also be familiar with curbside pickup, which is a subset of this approach. With curbside pickup, customers place orders online and then drive to the store, where a staff member hands their purchases directly to their vehicle. This method is especially convenient for customers with limited mobility or who do not wish to enter a physical store.
- On the other hand, third-party click-and-collect is an alternative model where customers opt to pick up their order at a collection point run by third-party providers, such as an affiliated store or a specialized mail dropbox. One of the more well-known examples of these secure drop boxes are the large, orange Amazon click-and-collect points often found in shopping centers and central supermarkets.
Many customers enjoy the convenience of click-and-collect services, as they can control when and where they pick up their orders. Image source: BBC.
Who are the customers of click-and-collect?
Customers of click-and-collect services are typically time-pressed shoppers looking for the convenience and flexibility that it offers them in terms of when and where they receive their items. They are also generally tech-savvy or on the lookout for new ways of shopping online.
Based on conversations with our retail clients at Netguru, the most typical customer personas for click-and-collect include:
Busy professionals often have limited free time during weekdays and therefore appreciate being able to pick up their purchases at a specific location of their choice.
Parents with young children prefer to buy online so they don't have to lug their children around with them while shopping.
Students value being able to order what they need without incurring additional shipping fees or having to wait in line at stores.
Elderly shoppers or people with disabilities appreciate being able to shop independently and benefit from a less physically demanding trip to the store.
Benefits of click-and-collect for retailers
Customers benefit from click-and-collect primarily due to the convenience and flexibility it provides. As a business model, it has also proven itself advantageous to retailers. Here are the benefits of click-and-collect that your retail business can leverage:
- Control of the fulfilment experience: This service allows retail outlets to maintain delivery control, improving the post-purchase customer experience. They can worry less about their parcels being left outside of their door while they’re at work. Those who live in a remote location that’s difficult to find for couriers will worry less since they can direct their orders to a pickup location convenient to them.
- Opportunity for cross-selling: Providing customers with a click-and-collect option gives your business an opportunity for cross-selling or upselling. When customers pick their items up from one of your retail locations, you’ll be able to offer additional items to the customer through attractive displays and product recommendations based on their purchase.
- Privacy: If a customer feels particularly vulnerable or doesn’t want their name attached to their address on a package, their home location can remain anonymous while still allowing them to enjoy a delivery service.
- Channel for return items: Collection locations can also work both ways, meaning that customers who want to return items can leave their packages at the nearest click-and-collect point for couriers to pick up rather than at an inconvenient post-box or post office.
- Opportunity for cost-reduction: While building a click-and-collect service entails investment, it can be an opportunity to reduce the cost for third-party delivery services.
- Building an in-person relationship with online shoppers: Click-and-collect services provide an opportunity for retailers to build face-to-face relationships with their online customers. This can give retailers additional information about the personas of their ecommerce platform users. Further, by providing an outstanding store pickup experience, click-and-collect can enhance a retailer’s overall brand perception.
Challenges in click-and-collect for retailers
While click-and-collect offers a range of benefits to retailers, there are also several challenges associated with this type of order fulfillment. Before introducing click-and-collect to your retail strategy, consider the following:
- Investment in personnel, training, and technology: The primary challenge that retailers face when offering a click-and-collect service is the need for staffing (whether new hires or repositioning of existing store employees) and investments in technology. Customer-facing and back office staff members must be trained on how to handle click-and-collect orders efficiently, which requires investment and a transition period.
- Maintaining accurate inventory levels: When shoppers order online but pick up the item at the store location, retailers have to ensure they have enough stock on hand so customers don't leave empty-handed. This requires tracking stock levels both in-store and online accurately, as well as keeping them synchronized at all times. If items are out of stock due to inaccurate inventory levels, it can lead to lost sales for the retailer and customer dissatisfaction.
- Integration with the in-store experience: Retailers must also consider how to best integrate click-and-collect into their operations without confusing customers or disrupting other parts of their business. For example, how will click-and-collect customers find their order when they come into the store? Should it be displayed separately from other purchases? Should you require payment upon ordering online or would you allow in-store payments? You must address these challenges before rolling out your click-and-collect business.
- Storage space in pick-up locations: Similarly, retailers must account for storage space until online orders are collected in-store. Existing retail shops might not have ample space dedicated for click-and-collect orders. Poorly managed storage solutions can result in lost or damaged items, leading to unhappy shoppers and potential reputational damage.
Zabka case study: How retailers approach click-and-collect
As part of their digitalization strategy, Zabka, one of the largest Polish retail chains, offers a click-and-collect service. When ordering on the Zabka mobile app, customers can choose the click-and-collect option. Zabka guarantees that the ordered items, especially consumable products, have a long shelf life and will be securely packed.
This option minimized physical contact between shoppers, storefront staff members, and courier personnel during the COVID-19 pandemic and helped them stay safe. Zabka’s patrons conveyed how their click-and-collect model was particularly reassuring to those who had elderly and vulnerable family members.
Zabka's click-and-collect services enable customers to shop efficiently and securely. Image source: Zabka.
One of the reasons why Zabka is an exemplary retailer in their deployment of click-and-collect is their rapid fulfillment time. Upon order confirmation, their items will be available for in-store pickup within a mere 15 minutes, which is about the time it would take the average shopper to walk to the Zabka branch nearest to them.
Elevating the post-purchase experience
Some shoppers may see click-and-collect as a mere gimmick or something to use only in very specific situations. However, it’s a business model that's rapidly growing in popularity because of the benefits it offers to both shoppers and retailers.
Customers appreciate the convenience and flexibility it affords, while retailers benefit from greater control over the order fulfillment experience, opportunities for cross-selling, and the ability to process returns more effectively, among many others. Providing an uncommon and novel offering such as curbside pickup can help boost customer satisfaction. Ultimately, with click-and-collect, retailers get an opportunity to elevate the post-purchase experience.
However, it’s important to note that click-and-collect requires careful planning and implementation. Retailers need to ensure that their people and infrastructure can support the offering. When properly executed, click-and-collect has proven that it’s a valuable solution to diversify one’s retail strategy, drive growth in ecommerce sales, and help retailers stay competitive.