Retail Trends: The Growing Demand for Click and Collect

Retail Trends: The Growing Demand for Click and Collect

As customers move more of their shopping online, what fulfillment looks like has been changing. Click & Collect, has been gaining popularity as an omnichannel fulfillment model with high returns that can also preserve the in-store experience. Customers save on the cost of delivery, and enjoy the speed and convenience of picking up their order from a nearby location when it suits them.
This post looks at how click & collect works, why demand for it is trending now, and what retailers can do to ensure click & collect experiences that are also good for their business.

What is Click & Collect?

Also known as buy online, pickup in store (BOPIS), click and collect is a form of omnichannel flow where shoppers make purchases online and pick up their order in a physical location, rather than having it delivered. The pickup location is usually a local retail store, but can also be a post office, a purpose-built locker or even a different retailer’s store.

What makes Click & Collect a success with shoppers

Customers benefit from the speed, low cost, and convenience of the fulfillment model. And now, with the additional concerns around health and safety, it offers a way to avoid shopping in crowded areas while still enjoying the advantage of local retail locations.

While interest in click & collect is not new, 2020 saw a massive spike in demand and turned it into one of the hottest retail trends. Back in 2017, the Click & Collect Retail Consumer Preference Study revealed that nearly one third of shoppers made an online purchase and subsequently picked their order up at a store during the 2016 holiday season. Fast forward to 2020, where in-store pickup increased by over 554% YOY in May.

Engaging online customers through stores

The in-store experience is still a crucial touch point for retail chains looking to enhance the relationship with their customers. Unlike curbside pickup (an otherwise similar fulfillment model), click & collect offers an amazing opportunity for shoppers to browse more and purchase additional items when picking up their online shopping order.

Optimize the middle mile – Click and collect is also a way for retailers to optimize their delivery network. Since retailers already need to deliver items to their stores for replenishment, they can make more efficient use of existing vehicles and reduce transportation costs by delivering items for in-store fulfillment at the same time.

Click & collect vs. hyperlocal delivery

As retailers have adapted to new ways of fulfilling products purchased online in the post-Covid 19 era, two new models stand out: ship-from-store and deliver in store. Many retailers have been forced to close locations due to either shelter-in-place rules, or to the shift among consumers to prioritize necessary spending over discretionary retail purchases. To justify the price of square footage, retail locations must now serve as a node in ecommerce fulfillment. Existing fulfillment models like ship-from-store and click & collect have become retail trends that highlight how to use local retail footprint to reduce the cost of ecommerce fulfillment and improve efficiency.

Both fulfillment models can use existing staff, or require outsourced resources. Also both require integration with inventory management systems, so as to have visibility about where inventory is, and which retail location or MFC it should be fulfilled from. As a model, though, launching click & collect requires less operational change than ship-from-store. Delivery involves additional complex capabilities such as dispatching and routing. Customers and store managers need a way to track drivers. And, of course, the chain of custody gets tricky and will require digital proof of delivery.

Flexibility – Another big differentiator is flexibility. When a customer schedules a delivery window, it’s difficult for them to change that time and date. They may have an option, but it will require orders to be rerouted, which requires specific delivery management capabilities. With click & collect, retailers can offer customers open-ended pickup, where they can pick up their order at any time within a large time window (for example, one week), and notify the store the morning that they plan to pick up the order.

Cost – The biggest differentiator between the two is cost: the cost of managing third party fleets, and the cost of delivery to both customers and retailers. Customers are sensitive to the cost of delivery; it’s no surprise that cost is by far the key driver for people choosing to collect orders in store, with 76 percent of Click & Collect shoppers saying that saving on shipping costs was the most important factor for them.

The impact of this model can be felt on cart abandonment rates. According to the Baymard Institute, extra ‘hidden’ costs like taxes and delivery fees are the number one reason for digital shopping cart abandonment. Image if an online retailer advertises free delivery, and you as a consumer go to checkout. You fill in your preferred fulfillment method, add credit card and shipping details, and only then (five-plus minutes into the checkout process) discover that your preferred delivery window costs significantly more than you expected.

This is exactly where in-store pickup can impact online sales rates. Even when some of the cost for this model is handed down to customers, it is understandably less than the comparative cost of home delivery. Moreover, when comparing both models with and without customer fees, click and collect overwhelmingly proves to have greater margins (Bain & Company). It’s safe to say that offering in-store pickup during checkout with free or low payment will reduce cart abandonment rates for retailers.

Click & collect also has fewer overhead costs than delivery, with existing locations and staff being utilized to fulfill both regular in-store orders and orders purchased online. When pickup is in the retailer’s brick-and-mortar store, it allows retailers to maintain footfall to their stores, where they can upsell to customers.

Both in-store collection and local delivery offer customers the speed and convenience they are looking for, and can increase your brand’s standing with consumers. Ideally, both should be an option, though not necessarily for all locations. Brands may find that one model better suits an urban vs. suburban setting, or locations which attract a specific demographic that prefer one model over the other.

Why Brands Choose Click and Collect:

  • Monetize existing retail footprint through fulfilling online orders

  • Requires fewer resources than delivery

  • Potentially relies less on third party providers than delivery, and makes it easier to have visibility into the chain of custody and fulfillment flow

  • Allows customers to enjoy the familiar in-store experience while limiting contact with other people in the store

  • Does not require any additional cost to the customer, which delivery might require

  • Can be launched quickly using existing resources

  • Allows customers flexibility to pick up the ordre when convenient

The challenges

By 2021, it will no longer be a question about whether retailers offer in-store omnichannel fulfillment models – but of how good their fulfillment experience is compared to competitors.

Customer expectations – Customers want to pick up orders when it’s convenient for them – the order must be ready for pickup. They expect that once they get there, the store representative will reach them quickly. How close to the customer is the nearest pickup location? How long are your customers waiting to hear their order is ready? How long do they have to wait on line in store to pick it up? Keep in mind that customers are not willing to spend more than five minutes waiting for their order to come out.

business and operational challenges – these include:
– Sending the customer to the right store (location/availability)
– Alerting store employees when customers have arrived (you don’t want customers to have to call employees, as this makes the entire efficiency of the fulfillment model redundant)
– Optimizing store operations: managing congestion, ensuring a fast turnaround for pickup customers while also make sure that delivery and walk-in customers are accommodated as well.

Speed to market – in-store pickup is on its way to becoming fully commoditized. Today, the majority of retailers have implemented some form of buy online, pickup in store option – even if it hasn’t been digitized or automated yet.

By 2021, it will no longer be a question about whether retailers offer click & collect -but of how good their fulfillment experience is compared to competitors.

Read: Speed-To-Market is Party City’s #1 Goal for New Curbside

How to set it up

To set up click and collect operations, you will need to integrate your systems including POS and inventory management system. If you have an owned online channel like a mobile app or website, it should be able to display up-to-date available pickup locations. (ideally you’ll have in-store pickup available across all locations, but if not, the consumer should only see it as an option if it’s available in a store near them).

Backend – choose which locations should be available to the customer. In order to automate this, there should be rules around how many locations customers will get to choose from, the distance used to detect available stores or pickup locations (for example, retailers should set a rule where only stores within an X radius of the customer will show up as pickup options).

Brands then need to decide which technologies they will deploy in order to create an efficient, customer-centric flow.

Remember – quick and dirty setup is one thing; scaling up efficiently is another. Once you have the basics of click & collect up and running, you need to optimize it if you want to increase revenue from the model and ensure that yours offers the best customer experience on the market.

What the ideal click & collect flow looks like

The optimal flow focuses on two points: increase efficiency of the flow to reduce the workload on retail employees and support staff (e.g. reduce support calls), and create a differentiated experience.

– During checkout, Customers choose their fulfillment option. They are presented with several real-time options for pickup location, based on the business’s priorities and inventory availability.

– An order comes in to store employees, ideally on the same dashboard as delivery orders, so they can prioritize accordingly.
– Simultaneously, the customer receives an order confirmation, with a link to where they can set a pickup time

– Customers receive notification when their order is ready for pickup.
– Customer indicates when they are on their way, so employees can organized the items for pickup accordingly, making sure store operations are synced with customer arrival
– The employee-facing dashboard should include order ID. Both employee and customer-facing applications should include order ID and either color-coding or some other way to clearly mark the order so that pickup is fast and easy.
– Ideally, the customer should be digitally directed to one of the click & collect pickup points as they drive up to the store. Separating regular in-store and online order collection points will reduce waiting time for both omnichannel and brick-and-mortar shoppers who want to check out.
– Customers should be able to confirm the pickup – and employees, the proof of delivery – via digital methods, to maintain a contactless pickup.
– Customers should receive a pickup confirmation that lets them rate the pickup experience. This both gives the retailer feedback into which elements of their operations need improvement, and how customer experience stands.

Setting up profitable click & collect: connected, efficient operations that customers love

As a fulfillment model, click & collect a win-win situation for retailers and customers. It’s one trend that retailers must take into account when developing their growth strategy, especially since it can help them leverage their existing supply chain, increase sales, and make the most of an increasingly challenging retail environment.

The question is no longer whether to enable click and collect, as most retailers have already done so, but in what will set your service apart. With the race for market share closing in, retailers with online presence need to focus on scaling up and optimizing their in-store pickup operations for speed (same day option), convenience (choice of stores), and trust (accuracy of offered locations, delivery times, and a good overall experience).

Bringg’s out-of-the-box enterprise technology is helping a wide variety of retailers to quickly digitize, automated and optimize their delivery & fulfillment operations at scale. Learn more about our click and collect software or explore Bringg’s SaaS Platform here.

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