BY Capgemini
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Capgemini IT: GROWTH ACCELERATOR

IT trends spotted and checked by experts

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What happens

Click and collect deliveries, where consumers buy online and collect their purchases in store or from third party pick up locations, are surging in popularity as people increasingly enjoy the convenience of online shopping but tire of missed delivery windows. The click and collect market is set to rise by 64% by the end of 2021, according to a recent study by Research and Markets, with bricks and mortar retailers hoping they could also benefit as footfall returns to the high street.

so what?

Chief Executive Officer at Doddle

Tim founded Doddle in March 2014 while still serving as the Managing Director, Sussex, for Network Rail. Prior to joining Network Rail, Tim spent 10 years in executive roles spanning the UK rail freight...

Click and collect shopping is firmly embedding itself in the retail landscape with firms such as UK-based Doddle expanding rapidly to cater to the market. The firm itself reported 241% growth during 2015, higher than the wider parcel market and is seeking to increase the number of outlets where customers can collect parcels.The phenomenon highlights the increasingly interdependent relationship between parcel delivery groups and retailers, and presents an opportunity for merchants to capitalise on the increased footfall in their stores.Having click and collect services in a retailer's store drives online customers back into the physical store environment and increases sales through incidental purchases. However, such services must complement one another and can present operational and service challenges. Footfall is an add-on, but it is up to retailers to create an experience that turns customers visiting to collect parcels into customers who also buy goods in-store.

How does click and collect fit into the modern retail landscape?

Modern e-commerce consumers are heavily influenced by three factors when shopping online; cost, convenience and speed of delivery. We've moved from a time when consumers would be satisfied ordering from a catalogue and waiting up to eight weeks for their goods, to one where they expect delivery options that are fast (often within 24 hours) and free.
Click and collect provides retailers with a way to satisfy all three consumer delivery expectations without breaking the bottom line. Click and collect deliveries can be consolidated into the retailer's store or to a third-party location such as a Doddle store, providing considerable cost savings compared to making individual home deliveries. Because of this consolidation benefit, it also enables retailers to offer click and collect delivery as a next-day or in some cases same-day service, addressing consumers' need for speed. Finally, the convenience of knowing a delivery will be made first time, without having to wait in for it, satisfies the third expectation. Putting this all together, you begin to see why click and collect is the fastest growing delivery method.

How can it increase footfall for high street shops?

There are two ways click and collect can increase footfall for high street retailers. The first is by driving more of their online customers into store to collect purchases. By passing the cost savings of delivery consolidation achieved through click and collect onto customers, retailers naturally see greater take up of click and collect as a delivery option. More of their own customers coming into store increases the likelihood of those customers making additional purchases while they're in-store. UPS research says as many as 30% of click and collect customers go on to make additional purchases in-store.

The second way for retailers to increase footfall is to offer click and collect services for the whole Internet. This is a relatively new area but one we've spent a lot of time developing and working with retailers on. We do this with retailers such as supermarket chain Morrisons where we operate Doddle concessions within Morrisons stores, this means Morrisons gets the footfall of online retailers such as Amazon, ASOS and Missguided customers all coming in to collect their parcels. This year we've also launched a new technology solution called Powered by Doddle that enables retailers to run their own click and collect service as well as capture footfall from all online retail sites.

What other benefits are there for retailers to offer click and collect services?

That depends on how good the click and collect service is. Just saying you offer click and collect isn't good enough. The experience for the customer must be seamless and consistent. Research from JDA has shown that 73% of consumers will switch retailers if they have a negative click and collect experience. So, there's a question within a question to answer, by how much does your click and collect service negatively impact revenue, if it's not optimised for the customer?

What kind of goods are most often bought using click and collect?

 In our experience, most click and collect purchases are fashion followed by small consumer goods. We don't really expect this to change dramatically in future. The nature of fashion means it's an easy product to ship and easy for customers to collect and take home with them, relatively light weight and compact parcels are the easiest for click and collect. We do think though that there will be improvements made to click and collect in the grocery sector especially as big players like Amazon move more into groceries, which may mean click and collect becomes a more popular delivery option for these types of purchases than it is today.

Where next for click and collect services?

Click and collect has evolved for many retailers quite organically; whether that's been driven by consumer demand or cost pressures, there are few retailers who have a click and collect strategy. In fact, there are no retailers in the UK with a head of click and collect operations. Given some of the stats we've discussed around the opportunity to drive footfall and achieve incremental sales through click and collect, not to mention the higher lifetime customer value for a collect customer compared to home delivery, we predict click and collect will start to receive greater attention from retailers in 2017 and beyond.

Consumers aren't going to soften their expectations for fast, free and convenient delivery so retailers must evolve and improve in this area or lose out to more progressive rivals. 

Who cares?

 
E-commerce looks set to dominate the future of retail as shoppers are increasingly turned off by shopping in physical stores, as highlighted in a recent report by Capgemini, Making the Digital Connection: Why Physical Retail Stores Need a Reboot, although online retail delivery systems are still in flux.

More consumers are trying out click and collect services as a reliable and convenient method of getting hold of goods quickly without getting that dreaded card through the letterbox signifying that the delivery person came and left without delivering.

Click and collect services look to be an area of growth as the high street looks to reclaim ground lost to e-commerce, but retailers need to know that online shoppers demand a seamless experience; in-store service has to match that of online.
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