The rise of click & collect

Take ‘omnichannel’ for example – say that to anyone in retail and they understand what you mean, even if not everyone agrees on the same definition. But say it to a stranger in the street and they will likely stare at you blankly.

The same cannot be said for click & collect however – a retail innovation that appears to have very quickly become a major part of the retail landscape and a common term understood by shoppers on a wide scale.

Click & collect is also far more than just another fulfilment option – it can have a positive influence on a number of factors including sales conversion, customer satisfaction, operational costs and even store design and location.

So how did this happen and what does the future hold for click & collect?

Earlier this year we produced a report with Collect+ – the UK Click & Collect Review 2015 – to find out. This article outlines some key points from it.

What does click & collect mean?

While the term itself is fairly self-explanatory – order online (‘click’) then pick up from a physical location (‘collect’) – it’s important to understand that it actually refers to a number of options:

•In-store click & collect – where the shopper pays for the order at the retailer’s site checkout and collects it from one of the retailer’s own stores.

•In-store reserve & collect – as above, but instead of paying at the online checkout the customer requests the order to be held for them at a store and payment is made at the time of collection.

•Parcel store – where the shopper makes the payment at the website checkout and selects a convenience store, petrol station or other manned location for collection of their order.

•Lockers – where the shopper pays for the order at the site checkout and requests delivery to a safe locker – situated on a street site or at a supermarket, petrol station, bus, train or tube station – which is unmanned, automated and accessed by a code.

A ‘recent’ concept?

In this fast-moving industry, new retail concepts pop up as the ‘next big thing’ all the time – some never to be heard of again.

The growth of click & collect in the UK is one such big thing. In 2010 just 4% of orders from multichannel retailers selected this fulfilment option; by 2014 it reached 17.7%.

Although its development in the UK has been dynamic and can seem like an ‘overnight’ sensation, the concept has actually been around for 15 years. Home delivery has been and remains a major delivery choice in the UK, but in other countries ‘pick up, drop off’ (PUDO) points are highly established. In Sweden for example, 98% of orders select PUDO as the delivery option.

As with many things, it simply required the conditions to be right in the UK for click & collect to take off. Online shopping has become an integral part of culture in the UK, and has experienced rapid growth over the past 15 years. The growing requirement for deliveries in support of this made it apparent that industry would reach a point where it would become unfeasible for UK carriers to deliver every order to customer homes – particularly during the Christmas peak.

This concern was underscored in 2010 when Britain experienced a prolonged period of extreme weather throughout December – leading to huge logistical issues and backlogs for carriers as parcels became stuck in depots and on trailers that could not be unloaded.

Out of desperation at the unprecedented situation carriers and retailers found themselves in, they asked shoppers to come and collect their Christmas orders from store. Many did so and this contributed to a fresh awareness of future customer demand for a more structured click & collect solution to be rolled out.

Since 2010, carriers have invested in additional delivery capacity as well as third party parcel store and locker networks which, together with in-store retailer options, have created significant new ‘final mile’ capacity.

Benefits of this include potential for the delivery of multiple parcels to one business address which is generally more cost-effective than delivery to multiple addresses, and higher certainty of ‘first time’ delivery success through the automated locker network.

The future

Although click & collect has now caught on strongly in the UK, innovation never stands still and there are numerous options for how it may evolve.

For example, automated lockers offer the capacity for providing additional services such as banking, mobile phone top-up and messaging and advertising services. If they are used for multiple functions such as these they can become destinations of wider appeal, and the opportunity for online retail growth through them will increase.

There has also been some moves toward third-party relationships between retailers – such as eBay and Argos, and House of Fraser and Caffe Nero – which may serve to challenge the service standard provided by third-party operators.

‘In-boot’ services – where a parcel is fulfilled directly to the boot of a customer’s car – are currently being trialled by Volvo in Scandinavia and Audi in Germany, where PUDO is more established. But if trials are successful it’s possible that we may see UK businesses try something similar.

Finally, several major retailers are launching same-day delivery services – click & collect options are likely to be promoted heavily in order for this to run efficiently with maximum first-time delivery success.

It is of course possible that none of these will catch on and something else will capture the imagination of businesses and shoppers alike – but for the moment the popularity of click & collect as a fulfilment option shows no signs of abating.