CLICKETY-CLICK

On the face of it the subject for this blog sounds somewhat mundane: a look at the issue of “click and collect” in the context of retailing. However I was encouraged to consider it as a result of hearing about Zara and its recent opening of a dedicated “click and collect” store directly opposite one of its outlets at the Westfield Shopping Centre in the UK.

The background to this topic revolves around the challenge of delivering on the so-called “last mile” of the purchasing process. In essence this refers to the time when the shopper takes physical possession of the purchased item.

Traditionally this occurred in the physical outlet. We went to a physical store to consider the purchase of an item. Once satisfied that it met our needs we would complete that purchase and either take the item home or have it delivered.

Over the past ten years or so retailers have had to grapple with the substantive challenge of meeting the shopper’s needs and expectations with regard to that “last mile”. This has been further driven by shoppers making use of a number of different channels to engage with a retailer as they go through the buying process.

The omni -channels concept has led to the philosophy of retailers providing a seamless experience for shoppers across the different touchpoints.

This takes us to the process of collection and delivery.

Zara, with their approach are pursuing a strategy that is different to what the majority of retailers are doing in the “click and collect” area.

Most retailers have a section within some of their physical outlets where shoppers can call in and pick up their items.

However such as an apparently simple task is not quite as easy as it seems.

The main motivator for shoppers to collect their items is driven by some key influences. These include speed and convenience and cost. Some shoppers want to be in control of the delivery of items. Waiting for companies such as Royal Mail and DHL injects some uncertainty for shoppers – particularly if they have experienced some inconsistencies such as deliveries not arriving during the promised window.

A study by Bell and Howell (2017) also indicated that 78 per cent of respondents indicated that they preferred to pick up items in order to save on potentially larges shipping costs.

Therefore retailers have to ensure that they operate a click and collect system that meets the expectations of shoppers.

Zara’s introduction of a 2,000 square foot “pop-up” store is a departure from conventional models. Orders placed with Zara before 2pm will be available for collection each day.

This approach is based on the rationale that shoppers can benefit from a dedicated space for picking up items. Contrast this with many retailers who in fact create an environment where customers calling to collect have to mingle with regular shoppers, deal with queues at check-outs and may indeed have to queue at dedicated collection points at peak times during day or periods during the week.

This in many ways challenges the ability of retailers to meet expectations with respect to speed and convenience. For many customers, ordering online means that they can avoid the hassle of having to physically visit stores to browse, discuss issues with sales assistants and the inevitable queues. In the worst case scenario it defeats the whole purpose of online shopping and adds a layer of inconvenience.

Zara, with its dedicated model does not miss the opportunity to tempt customers into making purchases. It displays a small range of menswear and womenswear across he way from the collection points.

It also makes use of mirrors with RFID to technology to allow customers to view coordinating and complementary items, adding further temptation to make a purchase that they had not originally intended when they arrived to simply collect items.

This approach minimises the problem of having to mingle with people engaging in conventional shopping and browsing activities and speeds up the process of collection.

Contrast this approach with some other retailers.

The House of Fraser in its main store in London has located its collection point on the third floor. Customers have to make their way up a number of escalators before they arrive at their destination. It has six collection points available.

Debenhams, in its new store at Stevenage has operates on two floors. The collection area is located on the first floor. In order to create a mood of calm and reassurance it contains a desk with armchairs around it and an orchid placed on the table. It also provides teasers by having a range of items. Debenhams also provides fitting rooms which are located near to the merchandise.

Retailers have also experimented with other options. Instead of locating collection points within their stores they may use third party operators such as Collect+.

In this case they sign up with Collect+. This company has signed up over 5,000 convenience stores and corner shops. Once customers receive a code for their purchases they can present it to a designated convenience store and collect the item.

Other retailers have mode use of third-party operated pick-up points or indeed train stations or underground stations.

In essence retailers are going beyond the traditional collection points. Of course another option is to deliver direct to the shopper at a nominated location such as a house or apartment, office or a friend’s house. Amazon has taken this concept to another level by experimenting with drones. We have discussed this in a previous blog and as I write, tests are still on-going.

It is important to note that click and collect no longer provides a point of differentiation for a retailer. In the era of omni-channels retailers can no longer avoid the issue. Shoppers demand flexibility in delivery. Rising expectations also leads to perceptions that next day delivery in many cases is not acceptable.

The evidence also points to the importance of click and collect.

For instance 72 per cent of UK shoppers use click and collect (Interretailing report: 2016).

The same report also indicates that 58 per cent of the top five hundred retailers offer such as service.

Interestingly 65 per cent of shoppers who collect items also make additional purchases (Cybertill: 2016).

Also the above report suggests that 17 per cent would abandon a purchase if the click and collect option was not available to them.

Managing the process of click and collect can represent considerable challenges for retailers. For instance during the Christmas period for 2017, Marks and Spencer found that two-thirds of all items ordered online has to be routed through click and collect.

Dealing with queues and waiting times presents the most difficult challenge.

Some commentators argue that by bringing people back to the high street it can rejuvenate shopping. Personally I am not so sure in the context of the UK. Parking and parking charges pose a significant obstacle and cost.

Zara’s dedicated pop-up collection store is an interesting response to the challenge of meeting that “last mile” in the process. Let’ keep an eye on further developments in this superficially mundane but challenging area.

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