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Capitalising on click & collect: are retailers missing a trick?

Retailers are struggling to remain relevant and competitive in a landscape that has become increasingly unpredictable. This has led many to seek out new ways to boost their offerings and improve the customer experience. Yet, while innovation is good, it can mean retailers sometimes overlook a service they already offer – click & collect.

Click & collect is growing year-on-year and, according to GlobalData, UK sales are expected to increase by 55% by 2022. In addition, research suggests that almost three quarters of customers collecting orders in store will make an impulse purchase at the same time, which is great news for retailers. But despite its popularity, I believe there is still untapped potential in click & collect.

Expanding horizons

Historically, click & collect was limited to a retailer’s own brand. But as the concept has evolved, retailers have identified a much-needed opportunity to drive valuable footfall and attract new demographics into their stores. We’re seeing more and more retailers exploring partnerships with complementary, and sometimes even competitive, brands.

For example, Amazon is collaborating with physical retailers including Morrisons and Next, and Debenhams is partnering with ASOS, where the physical store is acting as a pick-up location.

But there is far greater potential to explore.

Collaboration equals opportunity

Morrisons has installed Amazon Lockers across its store estate. But as much as the two businesses compete in some areas, working together enables both parties to benefit. Amazon profits from a convenient way for shoppers to pick up their parcels from almost 500 locations. And Morrisons benefits from Amazon’s success, drawing in additional footfall to its stores with the ability to cross-sell to shoppers at the same time.

Another example is Asos and Debenhams. Through its partnership with Doddle, Asos shoppers can collect and return parcels from the department store chain. While the two retailers may be considered competitors, Debenhams benefits from extra shoppers walking through its doors, and is using the opportunity to cross-sell additional products to Asos customers. At the same time Asos, which doesn’t have physical stores, benefits from Debenhams’ nationwide network of stores.

Point of sale; point of opportunity

Click & collect is also the perfect way to engage with customers while they’re in store, particularly at the point of sale. Once in store, or at the collection point, retailers can encourage shoppers to stay longer by offering them incentives and offers (targeted and personalised based on their past purchases or what they’re collecting).

These don’t need to be restricted to product-based offers, but could include complementary promotions, such as a free coffee in the store cafe, a make-up consultation, or simply money off their next shop. All of this can be designed to improve the shopping experience, keep customers in store for longer and importantly, give them a reason to come back.

The returns opportunity

Another area that is often overlooked is returns. Usually viewed as a negative by retailers, returns can also present a significant opportunity. Giving customers the chance to return their unwanted goods to physical stores provides retailers with an opportunity to engage with them whilst they’re in the store. This is an ideal moment to incentivise them to make a purchase or offer them something that will entice them back in future.

Just look at Kohl’s, the American department store chain, which is now accepting Amazon returns at all of its 1,158 locations following a successful pilot. The pilot resulted in 9% growth in new customers and 8% growth in revenues compared with national growth figures of 1% and 2%, respectively, according to figures from Earnest Research. By giving Amazon customers the chance to return their unwanted items in-store, Kohl’s has increased both footfall and sales, which it has struggled with in recent years.

Growing the opportunity

The retail sector has transformed dramatically over the last few years with brands adopting a host of tactics to try to attract, delight and retain customers. And while retailers will continue to seek out new ways to boost competitiveness, it is my opinion that click & collect can provide a great opportunity for retailers to build better relationships with customers, both in the short and the longer term.