This is the first in a series of five blogs about making Click & Collect profitable.
It’s that time of year again when retailers dissect how their Christmas went, hopefully in the spirit of congratulation rather than post mortem. And it’s rapidly becoming a tradition to point out that the retailers who have got their Click & Collect right are the ones who have most impressed the consumer over this period.
However you slice it, however you embrace it or try to ignore it, Click & Collect is big business. And retailers with bricks & mortar stores have a lot to gain from anything that brings customers instore, where the possibility of driving upsell and re-inforcing brand engagement is strong.
But many retailers have discovered to their cost (quite literally) that delivering click & collect that wows the customer is an expensive undertaking. So the golden question has become: can you make C&C profitable?
The good news is: the answer is yes, it is possible to run efficient click & collect as something other than a loss-leader or a “necessary evil”. And it’s not about trial and error, or cutting corners. The trick is to create a process chain without any weak links.
As ever the devil is in the detail, but at a headline level this depends on having three pillars in place:
- Real-time inventory visibility
- Connected IT systems
- Efficient receiving areas
Real-time inventory visibility
In order to manage orders effectively, store associates and systems have to share accurate real-time inventory visibility. This means that systems need to be able to accurately identify the correct location of every product across the business at the item level, not merely at the batch delivery level – whether in stores, warehouses or distribution centres.
Without this visibility, items that are available to be picked direct from store stock might not be properly identifiable and traceable, and online orders collected in store will have to be picked at the warehouse and handled as special items, adding handling costs to fulfilment.
At the warehouse level, it’s important to consider the added costs that inefficient shipment staging can produce. When pickers move products from the warehouse to staging areas, they often need to combine items with other picked goods before they are ready for shipment and items remain in a staging area until the entire order is complete. If this isn’t managed properly, small incremental costs rack up.
Connected IT systems
Allowing silos of information to develop and to thrive is something that inevitably leads to consumer frustration down the line. Wherever an item is and whatever channel a customer enquiry comes from, retailers need a single, accurate version of the truth. IT systems need to be connected.
Given that the different elements of the fulfilment network (store, warehouse, distribution centre, manufacturer direct etc) have different speeds and capabilities, it’s critical to understand how orders flow through the process, and for systems to be properly joined-up. And you mustn’t neglect the basics: you can’t have connected IT systems without a robust, reliable and watertight-secure wireless network.
Efficient receiving areas
Retailers need to set, communicate and enforce a clear delineation of the areas where goods are received in-store. This will include stock-rooms, loading bays, and also areas on the shop floor to receive returns. These areas need to be properly equipped with scanners, rugged mobile devices, and handheld mobile printers.
Guided receiving and putaway solutions and processes are essential to maintaining smooth and accurate operations. These will allow associates to access accurate, real-time information about what was received, when it was received, and the shape it was in. Enabling associates to reconcile received merchandise on hand reduces inventory loss and thereby improves profitability.
Some bedtime reading for you
This is just the first step (of three) on the journey to efficiency. All of this – and much more – is explored in much more detail in Zebra’s new eBook “Three Steps to Click & Collect Profitability” which you can download now.