By Mark Lewis
Tesco recently announced the expansion of its ‘Click and Collect’ service to groceries, the biggest indication so far that the tide is turning for retail deliveries; online shoppers are increasingly opting to order their goods into stores for collection, and moving away from traditional home deliveries.
The click and collect delivery method is not new. Some retailers, such as Next, have been offering in-store delivery options for some time, but in the past year click and collect services have begun to gain real ground as an alternative method of delivery, with more customers taking up existing options and more retailers developing their own version of the service. This has certainly been the case for Dixons Retail, which has just announced that sales for its own ‘reserve&collect’ service were up by 13% this year, as its traditional e-commerce sales fell by 5%.
As indictors go, Dixons’ results offer a significant sign of permanent change in customer delivery preferences, though not as significant as the momentous commitment to multichannel delivery methods just made by the UK’s two largest supermarkets. Click & Collect is not as obvious a choice for supermarket shoppers as it is for customers buying electronics or clothes; for most it is easier to make a one-off trip to the high street to pick up a package than it is to make a regular trip to an out of town store to bring home a full weekly shop. Yet after successful trial periods, both Tesco and Sainsbury’s have seen enough customer enthusiasm for their click and collect services to roll it out on a national scale.
So why are supermarket customers, and indeed online shoppers as a whole, opting for click and collect? On one hand, it can be seen as a consequence of changing customer behaviour. For many people to stay in to wait for a delivery just isn’t an option. Missing a delivery, on the other hand, can mean a lengthy and costly trip to the sorting office on Saturday morning. To achieve the convenience that shoppers expect when they buy online, it is vital that retailers offer a choice so that customers can opt for the delivery service that fits best with their lifestyle.
Offering a click and collect service is, therefore, about matching customer expectations.
What’s more, missed home deliveries are to the detriment to all parties, not least in terms of cost. Last year, research from IMRG put the overall cost of missed home deliveries at £792m per year, with the price shared between retailers (£240m), consumers (£266m) and carriers (£286m). Though the report put consumer costs at higher than those paid by retailers, in the long term it is retailers who stand to lose the most from the situation as, in research we carried out last year, 38% of consumers claimed to have been put off a retailer as a result of a poor delivery. With this in mind, it is now more vital than ever for retailers to offer their customers a choice of delivery options.
For customers concerned by the cost of home deliveries, especially missed ones, the switch to click and collect makes perfect sense as many retailers now operate free collect-in-store delivery options. Instead of the cost and time involved in travelling to a faraway sorting office, customers can at once eliminate the cost of delivery and also ensure that the collection is on their own terms.
All this is not to say, however, that the success of click and collect is due solely to the challenges of home delivery – its benefits speak for themselves. Foremost amongst these is the choice it offers, both in location and timing. For many customers, the easiest collection point may not be nearest to their home, but to their workplace, or another location that they are already planning to visit. With the extensive network of stores offered by larger retailers in particular, options are wide as to where a customer can choose to collect their parcel from.
Concern around timings is also eliminated by click and collect deliveries – shoppers can simply choose to pick up a parcel at whatever time suits them, on any given day. Our own Collect+ service is able to take this option even further; we operate through a network of over 3,800 corner shops, and the extended opening hours that these stores operate allow us to offer an even greater choice of times than many shops – a number of stores in the network are even open 24 hours a day, 7 days a week.
Alternative delivery services also benefit the retailers, especially those operating in a purely online space, such as the fashion store, very.co.uk. With no stores of its own to support a click and collect service, Collect+ provides a vital option for very.co.uk customers who would rather not rely on home delivery. Our scale and the interest we are receiving from other retailers interested in arranging click and collect services means that we can become almost a ‘one stop shop’ for customers, who can order items from any number of retailers to be collected at the same place at the same time.
The rise of click and collect marks a significant change for online retailers as the next move towards truly multichannel. Nor could it come fast enough because in today’s tough retail environment providing that extra convenience factor could be the extra ingredient to encourage continued online shopping. It can even convert seasoned high street shoppers to purchase items online to collect as they continue their usual in-store browsing.
If we were in any need at all of a confirmation that multichannel deliveries are the future of internet retailing, this new commitment from the nation’s biggest supermarket has provided just that. The bar has now been raised for offering customers the most convenient delivery service possible, and retailers ought to take note.
Mark Lewis is CEO of Collect+