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The Visible Value Blog

Should retailers be investing more in click-and-collect?

Posted by Karen Wallis

May 11, 2016 at 12:29 PM


Click-and-collect has become a significant battleground for retailers in the UK. A research report released by Planet Retail claims that the number of UK shoppers using click-and-collect will rise to 76% by 2017. Yet despite this, only two-thirds of the Top 50 retailers currently offer the service.

The two primary barriers to online shopping are the cost of delivery and inconvenient delivery times. Click-and-collect solves both of these issues, making it a very attractive option to shoppers. For me, it puts the control back into my hands and allows me to choose when and where to collect my order. Plus, I get the added guarantee that the product I have ordered will actually be there.

It’s no surprise then that retailers are putting click-and-collect at the centre of their multi-channel strategies. Click-and-collect accounts for 45% of Next’s online orders and it has recently announced that it will be investing further in this proposition as competitors are catching up with its delivery and warehousing capabilities. Argos is another retailer that has led the pack on click-and-collect for some time, having been one of the earliest adopters of the delivery method. Approximately 30% of its sales are generated through the channel, a number which is again expected to increase over the coming years. John Lewis has utilised its vast network of Waitrose stores to enable its click-and-collect service, with 57% of all click-and-collect orders being picked up from the sister brand.

However, click-and-collect could be make or break for retailers. While Next, Argos and John Lewis offer shining examples of click-and-collect done well, other retailers are having to determine whether or not the service is actually viable. Indeed, despite items being in stock in store, many retailers still fulfil click-and-collect orders from the warehouse. Supermarkets in particular are struggling as grocery orders tend be more time-consuming and costly both to pick and to store. With margins already slim, click-and-collect is not bringing enough by way of incremental profits to balance out the additional costs involved in offering the service.

Some retailers have now had to introduce a charge for click-and-collect. Tesco announced this year that it will be charging £4 for click-and-collect grocery orders below £40. This followed the introduction of a £2 charge for orders under £30 by John Lewis last summer. Retailers recognise that click-and-collect is a vital part of their future delivery strategy, but for low value orders in many case it’s simply not viable. This is where getting in-store order fulfilment right can really make the difference for retailers. The store should cease to be just a showroom and should also function as a fulfilment centre for online orders.

Another method a number of retailers are exploring is the use of alternative pick-up points and third party stores. Retailers are forming strategic partnerships to pool resources in order to improve and expand their click-and-collect offering. Argos has teamed up with both eBay and Sainsbury’s, Westfield has partnered with CollectPlus, and Tesco, Waitrose and InPost have even teamed up with Transport for London to provide collection services on the London Underground. Lockers and independent collection and return companies like Doddle and CollectPlus are growing in popularity, building a network of drop-off and pick-up locations across the country. ASDA has even launched its own parcel delivery service, ToYou, which enables shoppers to collect or return items from third party retailers at ASDA stores.

Retailers are employing innovative methods to meet the rising demand for click-and-collect. However, it’s imperative that these methods are backed up by a robust supply chain and fulfilment model. 

Topics: Retail