Click & collect

Why 'buy online, collect in-store' is a golden opportunity for New Normal health stores

The 'Stay at Home' message obviously hit the concept of click & collect hard but with more freedoms now being allowed, it could bounce back as an online option for the future.

There are two ways of operating a collection service – the friendly, personable option of a regular customer calling or emailing an order, or a store with an online shop offering this facility.

And in the 'new normal', independent high street businesses have learned how to co-operate better, click & collect being just one example. It can be expanded to working with other local independents so that one order from two or more shops can be collected at a chosen collection point. If lockdown has taught us anything, it's how important your local network can be.

It's also an opportunity to emphasise your diversity – customers during lockdown discovered that their health store is good for far more than a multivit or spelt pasta. Ruth Noah at Noah's Health Food Store in Wallington has revealed elsewhere in this issue that she took many lifeline orders for collection and noticed customers were ordering items they would usually get from the supermarket and were often surprised by the extent of her shop's ranges.

And others such as Best Health Food Shops in the South East encouraged people to place collection orders for their neighbours, especially the elderly, at the same time as their own order.

However, concerns continue about human contact which may open up the option of central collection points. Emily Salter, Retail Analyst at GlobalData, said: "Consumers may switch to third-party pickup options instead, especially lockers as this fulfilment method has no contact with others, as long as shoppers are reassured about the cleanliness of the facilities."

Click & collect advantages

The strategic and commercial rationale for deploying click & collect via an online shop still holds good post-lockdown. It increases sales, removes delivery costs and improves customer choice and convenience. And there are two other important themes to which click & collect can lend itself: environmental sustainability and urban congestion. In both cases, if an off-premises collection point is used, click & collect allows:

More parcels to be delivered with fewer vehicle movements
Deliveries to be made outside of normal congestion times
Consumers can collect orders without necessarily adding to their carbon footprint

There's still a great deal of scope for click & collect in the UK and for more retailers to offer a wider range of click & collect alternatives. However, to move into its next phase of maturity. click & collect needs to address the fundamental issues of how to be universally cheaper than home delivery and how to allow customers to collect most of their click & collect orders from fewer locations.

As the e-commerce industry becomes increasingly saturated and competitive, giving the customer what they want – when and where they want it – has never been more important. A critical element of the buyer journey has always been the delivery phase with consumers overwhelmingly favouring merchants that offer them free, fast and easy ways to obtain their items. This final step is often the biggest factor in cart abandonment or choosing one retailer over another.

While it is a major factor for consumers, the decision to offer click & collect as an option is not a simple one for retailers. There are costs and logistics associated with making this service successful, such as deploying staff to fill a basket and package the order, but the benefits can include increased customer loyalty, lower cart abandonment rates and upsell profits (to name just a few) if implemented correctly.

Most importantly, click & collect offers customers the freedom, choice and convenience that most have now come to expect.

Customer experience

The UK's online shoppers are arguably the most sophisticated in the world with the highest spend per capita over an extended period of years. In other words, UK shoppers know what they want and that includes options to specify the right delivery solution for them.

The latest IMRG UK Consumer Delivery Review (2020) provides ample evidence of the importance shoppers place on having the control to select the right service that allows them to get their online order at a time and place convenient to them rather than at the convenience of the delivery company. Click & collect provides an important option with consistently two-thirds of the review's respondents confirming they have made use of it or intend to do so in the future.

"The consistent challenge from retailers to their online shop delivery partners is that the delivery agent must represent the retailer's brand and ethos on the doorstep," says IMRG. "Carriers make considerable efforts in this respect, but in-store own brand click & collect provides retailers an opportunity to take direct control of the handover experience."

Conversion

Click & collect has become a marketing device for both retaining existing customers and attracting new ones. For example, Adobe-owned Magento Commerce reports that click & collect is a loyalty driver and that 24% of UK shoppers will become repeat customers if a retailer offers 'Buy Online and Pick-up In Store'. And that click & collect customers will make additional purchases when they collect their original order.

GlobalData's 2018 research reported that 39% of shoppers make an additional purchase when collecting an order in-store, noting that this varies substantially by sector and that the most popular additional items fall under the food and grocery category. Metapack's data was similar at 41%.

Barclays reported that 89% of retailers offering click & collect saw footfall increase over a two-year period and 97% reported additional revenue.

However, looking at the volume of orders rather than the value, when considering all retailers including smaller players and those without their own store networks, these data companies estimate that only about 5% of all UK delivered volume currently moves through the click & collect channel.

Meanwhile, IMRG estimates that almost 90% of all click & collect volume is picked up in-store.

Click & collect variations

In-store click & collect – where the shopper pays for the order at the website checkout and chooses to collect the order from one of the retailer's own stores.
In-store reserve & collect – at checkout, shopper asks the retailer to hold the order for them at a store but the payment is made at the time of collection. Recommended only for regular customers.
Third-party click & collect – customer pays for the order at the website checkout and selects collection from a parcel-point or locker network.

Extra staff?

Health stores moving into online shopping and click & collect may find they need additional staff. The coronavirus impact has meant that large numbers of staff from the travel, hospitality and other retail sectors have been left without employment, offering a large talent pool of potential recruits.

Summary

Consumers don't want to pay extra – unless the click & collect service is materially cheaper than the home delivery alternative the customer will choose the latter.

Awareness and acceptance of click & collect is now such that all retailers with an online shop should provide this option or risk losing orders for the lack of it. It may provide a cheaper or more convenient option for the customer and address one of the key reasons for delivery-related basket abandonment.