Comment: Will click & collect be as impactful as predicted?

Buzzwords come and go, but one term that frequently reoccurs is click & collect.

Argos was the pioneer of click & collect in the UK back in 2001. Since then the service has gathered momentum and is now mainstream across the retail sector, but is it here to stay?

The early adoption of click & collect is a particularly British phenomenon. First launched for the UK market by Argos, as a nation we remain at the forefront of development of the service leaving other sophisticated retail markets such as the US and Germany in the dust.

The UK's love for online shopping and use of remote payment options has meant that click & collect has changed the shopping landscape forever. A recent Barclays survey found that a quarter of all online sales culminate in this service, with others estimating the rate to be even higher. The expectation is that click & collect services will continue to grow. John Lewis saw one in six of all of its Christmas sales in 2014 come from online sales picked up in-store, and across the sector as a whole, they accounted for 7.5% of all sales in December.

The appeal for shoppers is very simple and boils down to speed, convenience and value. They can avoid potential delivery fees on online purchases, will never miss home deliveries at inconvenient times and purchases will be kept safe until collection. From the retailers' perspective, there are several benefits. Additional sales during collection visits can range anywhere from 25 to 40%, and the impact on footfall levels has been hugely positive with some stores over the festive period recording 500 pick-up visits per day. Costs on home delivery, particularly for grocery retailers, can be significantly reduced. Customers are typically charged up to £6 for a service that costs in the region of £15 to execute.

There are operational challenges however that go some way to explain why a third of the UK's leading 50 retailers are yet to offer click & collect. The instant nature of online shopping puts extra demand on delivery from distribution centres and stock room allocation, efficient storage retrieval and labour scheduling planning at store level, which must all work in sync for swift turnaround to meet demand as delays could not only affect the customer's love of click & collect, but the retailer as a whole.

Retailers that have successfully adopted click & collect however have seized the opportunity with real energy and innovation, adapting to meet market demand. Some have lobbied successfully for a relaxation in planning permission on existing retail spaces, giving stores a suitable working space in which to accommodate storage and collection areas. Others have opted for pick-up facilities in public locations or with high street partners. Distribution practices for some have also taken on the hub-and-spoke approach to improve delivery speed and cost reductions.

Investment in technology will mean that click & collect services will continue to grow, but only if it continues to meet the peak and trough demands of shoppers. Communicating when purchases are available but also establishing the most convenient time to collect will mean speedier services and better service standards.

It remains to be seen whether other countries will take up this trend, however the UK adoption of click & collect has gone from strength to strength. A strong infrastructure must be in place to deliver on customer expectations but so far, there is real reason behind the click & collect buzz.

Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance, writes a regular Essential Retail column on in-store technology and the wider retail landscape.

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