CEO of innovative automated parcel locker provider InPost UK, Ian Caminsky, discusses what the future holds for Click and Collect.
Gone are the days when in-store Click and Collect was considered a ‘nice-to-have’ by consumers when choosing their preferred online delivery method.
Research from Barclays Retail has estimated that Click and Collect volumes will account for more than a third (34.5%) of all deliveries by 20181, due to the added levels of convenience provided by these services. My experience says that is very conservative, evidenced by the fact that John Lewis are already there (they announced in their Christmas results that 35% of online orders were picked up inshore2), indeed some retailers already see their store based collections at 50%. As such, it comes as no surprise that many retailers who resisted offering the service for many years, including big players like IKEA3, now consider it an integral part of their customer fulfilment strategy.
An Unsustainable Service?
Indeed, it’s clear why Click and Collect services have been such a success to date. With people increasingly time-poor, anything that makes daily lives easier and more straightforward is likely to fast become the norm – and in the case of the fulfilment of online shopping, traditional postal services just weren’t delivering. With almost half (48.7%) of UK households unable to receive parcels at home during working or delivery hours4, it’s no wonder shoppers have been quick to turn to alternative delivery options which more easily fit into their daily routine.
“Lockers allow consumers to multi-task their journey via trip-chaining”
So on the face of it, Click and Collect services provide the perfect solution for all parties. Shoppers gain a greater degree of choice, control and convenience and therefore buy more; whilst retailers benefit from increased online sales and provide an additional reason to attract consumers into store.
However, a tipping point is being reached as its soaring popularity is proving increasingly challenging from a logistics perspective and costly to retailers. Providing this added layer of convenience to online customers requires not only additional staff resourcing but also involves the loss of valuable retail estate which could otherwise be used for product displays.
Equally, the complex back-end system required to provide an effective in-store Click and Collect service has meant that more than 44% of retailers feel that in-store collection can cause capacity issues5. 31% of customers agreed over the Christmas period that retailers didn’t have an adequate in-store Click & Collect area, the same number said that they experienced longer than hoped for waiting times because there weren’t enough staff and 24% said they waited too long in-store to get their parcel6.
Times Are Changing
All of these considerations beg the question of whether the current in-store Click and Collect model really does deliver financially for the retailer, whether changes need to be made or other options explored.
Indeed evolution is already underway.
Some leading retailers recently surprised consumers by announcing that shoppers opting for in-store collection for online purchases under a certain price threshold would be subject to a charge. Retailers explained that the overwhelming increase of parcels into stores required them to modify the free service model in order to maintain service levels, thus illustrating the unsustainability of the model.
Sustainability, Convenience and Customer Service
Ultimately, where the delivery battle will be won is in providing solutions that offer benefits for all parties; that meet the demands of the consumer for greater convenience, but not to the detriment of either retailers or couriers.
Providing shoppers with access to a network of over 1,000 automated parcel lockers to collect their purchases answers this very real requirement in the UK by using disruptive technology to revolutionise the retail industry and balance the requirements of all stakeholders in a way that no other technology can. Lockers provide retailers with the ability to get products to shoppers more easily while making the shopping experience more convenient. Users have the ability to collect parcels 24 hours a day, 7 days a week, in as little as 7 seconds so there is no need to observe regular store opening hours and picking up a parcel can easily be ‘linked’ onto many of our journeys (often called trip chaining). Plus it allows couriers to make deliveries and pickups more efficient by eliminating the nightmare of failed deliveries. Given all this, we can plainly see that lockers allow for a more reliable, consistent and convenient experience for the consumer, help the retailer provide a better service and allow the courier to thrive. With a sustainable model that provides better service you get increased sales which, of course, is what it’s all about.
Whilst it is clear that in-store Click and Collect will continue to be prevalent for the coming years, and is growing in popularity as it matures, the current model has to change and needs to be offered in balance with other effective delivery solutions in order for it to survive in the long term.
1. ‘The Last Mile: exploring the online purchasing and delivery journey’ – Barclays Retail, September 2014: https://www.home.barclays/content/dam/barclayspublic/docs/BarclaysNews/2014/September/the-last-mile-report.pdf
2. ‘John Lewis celebrates Christmas boost with click and collect success as Waitrose suffers dip’ – International Business Times, January 2016: http://www.ibtimes.co.uk/john-lewis-celebrates-christmas-boost-clickcollect-success-waitrose-suffers-dip-1536262
3. ‘The future of click and collect: collaboration, convenience and customers’ – eDelivery, July 2015: http://edelivery.net/2015/07/the-future-of-click-andcollect-collaboration-convenience-and-customers/
4. ‘IMRG UK Click and Collect Review 2015’
5. ‘The Last Mile: exploring the online purchasing and delivery journey’ – Barclays Retail, September 2014: https://www.home.barclays/content/dam/barclayspublic/docs/BarclaysNews/2014/September/the-last-mile-report.pdf
6. JDA & Centiro Christmas Customer Pulse 2016 – http://now.jda.com/Christmas-Customer-Pulse-Report-2016.html