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Operations & Logistics: Supply and demand

Click and collect continues to grow – but leading brands are unlikely to make it an express option because of lack of consumer take-up

Unless the customer is a tradesman in need of a vital plumbing or electrical component, or possibly a fashionista desperate for an instantly available new outfit, most online customers, most of the time, do not need their orders ‘same day’ or ‘next day’ – and most are unwilling to pay a significant premium for such a service.

If the customer also happens to be strongly loyal to a particular brand, then he or she is unlikely to click to another site to obtain instant gratification
from a rival label unless there is a very pressing need to do so.

It is thus perhaps no surprise to discover that among the 214 brands that appeared in the Top 250 lists in both 2018 and this year, there has been a 15 percentage point (pp) decrease in those offering next-day collection – down from 29% to 14%, while same-day collection was down by 6pp to be offered by just 3% of brands.

Obviously, not all brands on the list maintain a significant high street presence, but many that do not instead offer collection services using parcel shops or their regular retail stockists, so this downturn in both categories is significant. Lack of customer take-up for such services is one possible explanation, but so too is the expense of the logistics needed.

Few brands with a high street presence have achieved real-time stock visibility, so fulfilment from store is impossible, while the cost of picking and despatching individual items for overnight delivery to a parcel shop or locker is equally impracticable – especially if the ‘parcel shop’ is not available 24/7.

Click and collect continues to grow

While most leading brands offer some form of click-and-collect service – albeit not same or next day – it is more likely to be an option among the Top100 brands. Overall, 43% of all Top250 brands provide a collection option, but among the Top100 that figure rises to 77%.

Among brands for which we also have 2018 data, growth in collection options was most notable among French- and Swiss-localised brands – that is, with a national website and delivery within its geography – with increases of 10pp and 11pp respectively to 49% and 35%, while Danish-localised brands saw a small decline: down by 2pp to 39%.

Most enthusiastic for collection are the Dutch – it’s an option available from 53% of localised brands – followed by the Spanish (52%) and UK (51%). Even in regions where collection is less common, around one in three of localised brands offer such services: bottom of the list are the Czech Republic (34%) and Poland (32%).

Fashion footwear and apparel brands are most likely to offer click and collect – 55% and 54% respectively of localised brands – while the least likely are those selling consumer electronics (9%) or appliances (15%). Many in these last two categories are manufacturing brands with little or limited retail presence and widespread adoption of click and collect obviously needs significant numbers of convenient collection locations.

For these manufacturing brands the growing number of parcel shops is clearly a key benefit. Dutch company Brabantia, for example, offers collection via DPD Parcel Shops across Europe. Others arrange click and collect via their regional stockists: Montblanc customers can arrange for delivery of orders to local ‘boutiques’ – generally sited in specialist shops or department stores – while online shoppers can also check stock availability at a chosen ‘boutique’ or order items there for home delivery.

Regional delivery differences

In contrast, there was a slight increase in the number of brands offering next-day delivery – up by 6pp to 34% among the 214 brands that also figured in the Top250 last year. That average figure disguises major regional differences. Brands localised within the UK are clear leaders, with 49% offering next-day delivery: 11pp up on last year.

At the opposite end of the scale just 2% of the Top250 brands localised in Switzerland offer next-day delivery: again, logistics may play a part with potentially fewer brands maintaining local stocks within this particular geography and with transport from a major hub elsewhere in Europe taking time to reach this destination.

Also lagging well behind UK-localised brands for next-day delivery are those localised in Belgium, France and the Netherlands with around 10% of such brands offering next day delivery in each geography. The UK has some of the most enthusiastic online shoppers in Europe and also some of the most demanding which may explain the large number of brands offering next-day delivery in this geography.

Such premium services are often free of charge – especially at the top end: Burberry, for example offers its UK customers free next-day, Saturday or Sunday delivery with no minimum spend, while Gucci has “free express delivery” on weekdays for all orders.

Next-day delivery is most popular among sports and leisure footwear and apparel brands with 43% and 48% respectively offering this option, while only around one in eight (12%)
of appliance and consumer electronics do so. As with click and collect, it is also an option more likely to be found among the Top100 brands where it is offered by 43% of this segment compared with an average of one in three (32%) for the whole Top250.

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