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Shoppers can be fickle about the retail click and collect services they want. Of course, it all started with the desire and ease of researching and buying online. Starting with a multi-channel approach meant putting up an online ecommerce site. It supplemented your bricks and mortar presence. However, that was not good enough. All brand channels needed to tie in together, to give customers a single brand experience, regardless of the purchasing method and channel. They could buy online, want to pick it up at the physical store and end up just having an argument with the in-store employees about why it was not available or ready for them.
Omnichannel retail now means that shoppers can buy through any channel, and have a single seamless brand experience. Shoppers can buy online and pick up in-store -just as a starter. As omnichannel evolved, so have the number of options available. Ultimately, retailers are keen on omnichannel because of results like those reported by the ICSC. The International Council of Shopping Centers found 61% of shoppers using retail click and collect services bought more items when they were in-store picking up their original purchase.
Given this major additional revenue opportunity, here are six options evolving into the baseline of retail click and collect services.
Note that all statistical references are from Gartner’s November 2015 publication on “Survey Analysis: Multichannel Retailing – A Transatlantic Comparison” by Tom Enright.
First of the six options is in-store retail click and collect. It is the simplest form of Buy Online Pickup In Store (BOPIS). Currently only 36% of Western European and 31% of North American retailers offer it as a fully deployed service. This is surprisingly low given the intense competition among retailers.
Specialty retailers did a better job at fully deploying in-store retail click and collect services, with 41% availability. This figure was true globally. Also, 45% of large firms with greater than $3 Billion US in annual revenue fully offer the service. This compared to only 25% of smaller retailers. The key message being that smaller retailers need to adopt the service faster to compete with the larger players.
In-store lockers and drive through options are an interesting new service. Target, in the US had famously been offering a pilot Curbside Pickup. Target seemed to get more publicity from their decision in June 2016 to stop the service than when they started testing in October 2014. Meanwhile, Walmart announced that it will expand its grocery curbside pickup service. This augments Walmart’s commitment to in-store lockers that have already been widespread.
Despite the Target and Walmart examples, only 15% of businesses have adopted drive through and in-store lockers. Low adoption of this retail click and collect option is the result of needing a higher infrastructure investment (physical lockers, and a dedicated space for cars to stop for a pickup).
This challenge brings new innovation. Companies like (In-Hold) offer common pickup lockers available to a variety of retailers. Smart Centres in Canada, now offers Penguin Pickup depots. At shopping centers across Canada a special car pickup location is available for quick curb-side like service. However, this service is shared among retailers in the shopping mall.
Remote retail click and collect is a new twist on the standard collection point. This option includes client pickup points which are more convenient for certain shoppers. For example, a growing trend in UK markets is the use of convenience (corner) stores as pickup points. Other options may include UPS, Fedex, or Postal Stations as designated pickup points. This option does not provide the advantage of having the customer in your own store, for an additional sales opportunity. However, it does provide a convenience experience which customers can associate with the retailer’s brand.
Naturally, the pickup points will prosper from additional foot traffic to their locations. Remote locations may be a good way to differentiate your retail brand, given the low number of retailers offering this choice. Only 53% of North American and 60% of Western European retailers offer this retail click and collect option.
Reserve and collect is perhaps one of the earliest forms of retail click and collect. In countries like Canada and France, up to 93% of retailers offer this option to some effect. Although easy to implement, it can have less than desired effects for retailers. Reserve and collect is challenged with a high level of failed collections. This can have the negative effect of tying up a retailer’s inventory, when a client reserves but fails to show up to purchase and collect the item.
Albeit a controversial issue, ship from store isn’t just gaining traction, it already has significant traction. 91% of North American and 86% of Western European retailers offer ship from store services today. This can ship either to residential or non-residential location for a client.
Ship from store is an excellent way to control in-store / field inventory levels, maintain high inventory turnover, and provide revenue support for a brand’s store locations. It also offers the positive brand experience of giving the customer the broadest possible selection of options. Shipping from store may be among the most time and cost effective methods of getting an item to a shopper.
Opponents argue that it means retailers are eliminating low wage, specialist pick-pack-&-shipping workers, from the distribution centers. Instead, they are replacing them with expensive sales agents in the field. There is a strong argument; however, it also misses the point of providing a seamless brand experience for your clients. To be competitive, a retailer must offer the delivery options that clients want. Failing to do this, means they will simply buy from a competitor, instead.
Almost 90% of companies surveyed offer drop ship as an option. This being a direct drop shipment from the manufacturer to the consumer. European retailers offer this retail click and collect option most, with 52% of this full service. Only 37% of North American retailers promote drop ship, fully.
Drop ship from manufacturer to consumer may be an effective means of reducing the need for a retailer to hold large inventory positions. However, it can also become a costly option if consumer orders must be split for multiple shipments (and shipping costs) from different manufacturers. It also erodes at the cohesive brand experience that shoppers expect. When I order a set of items, I expect they will be shipped to me, all in one box, quickly, and at the same time. Consumers don’t want to have to track individual items, when they were ordered as one cluster.
Which of the above 6 retail click and collect methods have you implemented? And shouldn’t you be thinking of some of the others? Your competitors are. Make sure you keep up with the fast evolving omnichannel retail industry and provide your customers with what they demand.
Omnichannel Retail ROI – Does It Exist?