A question of convenience
Amazon, Ikea, Tesco, Game… the ability to order online and collect products from these retailers and many others has been an option for some time.
But this year we have seen click and collect expand rapidly and now 80% of multichannel retailers are offering click and collect: a 32% increase on 2019.
So who has been expanding their click and collect services and why does it remain so popular?
Who is doing it?
Click and collect is by no means a new phenomenon. Within grocery, click and collect and home delivery have been around for several years, but this year we have seen Aldi and Lidl begin to implement similar offerings. Aldi is planning on implementing its kerbside click and collect option (groceries can be ordered online and delivered to cars within the store parking) to over 200 of its stores, whilst Lidl has begun to install online collection lockers for its durable products (which 74% of respondents rated as "very good").
Within general retail, Debenhams has recently begun to offer click and collect from 4,500 convenience store collection points around the UK, whilst Boden struck a deal with Waitrose to allow customers pick up clothing orders from selected supermarket stores. With 4/5 of stores now offering some form of online order collection, it is now a question of how and when, rather than if, stores will offer such options.
Why is it popular?
On the demand side, convenience is the key underlying factor to its popularity. The ability for consumers to guarantee what they want and need, and the ability to consequently obtain it in a relatively short time remains, unsurprisingly, a popular option. Guaranteed product availability and reduced physical contact are also key factors for the growth during the pandemic.
However, for many consumers today, the question is why click and collect over delivery? This is important given that delivery offers the benefits stated above plus the benefit of not having to leave the house. The slight differences therefore come down to timings/speed and cost.
With regards to the latter, customers benefit from choosing click and collect by avoiding any additional delivery fees or minimum spend thresholds. Click and collect options also tend to offer shorter lead times than delivery, and though next day delivery (and same day delivery in a few select cases) is becoming more prevalent, click and collect usually offers better value when considering the trade-off between time and monetary cost (i.e. shorter delivery times are generally offered at premiums).
Additionally, in certain sectors such as the DIY market, the ability to immediately order and collect products is a major benefit of click and collect.
It is important to note there are two primary types of click and collect offerings. One is the simple ability to pick up a retailer's own products in their stores; the second however allows customers to pick them up from other locations (e.g. different stores, lockers or transit hubs). The first benefit from click and collect (beyond satisfying customer demands) is that it is less costly and complicated than delivery. Retailers save by delivering to a single centralised location rather than multiple homes, with recent studies showing that in low margin industries (e.g. grocery), home delivery turns profits into losses.
Through partnerships, retailers can earn additional income by offering click and collect for other brands within their own stores: examples include Asda's toyou service or Co-op's partnership with John Lewis. This also increases the customer base for brands with smaller store portfolios. In these trends, supermarkets have become particular targets for other retailers due to consistent footfall they receive which could increase demand and greatly simplify a customer's retail journey.
Finally, through click and collect, customers have the ability to make additional purchases, with research suggesting that up to 35% of customers do so when collecting an online order. The benefit of click and collect, especially versus delivery on the supply side is palpable.
Without doubt there are benefits for both customers and retailers from click and collect. This year in particular it has become a crucial format, and whilst the end of the pandemic may signal a shift towards normality and a return of more traditional physical retail patterns, we envisage that shopping solutions such as click and collect are here to stay and will form a permanent fixture in the suite of options available for customers.
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Tejas Panchal