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Click-and-Collect Continues to Evolve, But Where is it Headed?

April 12, 2016
Keith Anderson
Written By
Keith Anderson

As the click-and-collect model becomes increasingly popular with retailers and consumers, its growing adoption is borne out by recent industry statistics: According to a survey by the International Council of Shopping Centers, during the 2015 holiday season, nearly one-third of all shoppers chose to make purchases online, then pick up the merchandise at the retailer’s brick-and-mortar location.

Additionally, when shoppers opt for click-and-collect, they often end up buying more merchandise while they’re picking up their purchase in store. Per the same ICSC study, nearly 70% of shoppers fall into this lucrative “impulse buying” category.

Click-and-collect figures are particularly compelling in the online grocery space, where the Grocery Manufacturers Association and The Boston Consulting Group report a 30%-50% spike in sales across all channels versus traditional shopping (PDF).

The preference for delivery is particularly prevalent among high-income shoppers in densely populated urban areas, where driving, parking and loading up a car with groceries is extremely cumbersome.

Conversely, in less populated areas, the more frequently you’ll see click-and-collect as opposed to delivery. The greater the distances a delivery person has to travel, and the more fuel they have to use between drop-offs, the less likely retailers will consider delivery economical.

Moving forward, it’s not a case of delivery gaining dominance over click-and-collect, or vice versa. Both will growth and coexist, with shifting patterns of preference based on demographics and geographies. It’s a case of different models in different contexts.

Challenges, opportunities and technology

By definition, click-and-collect is more labor-intensive for retailers than an exclusively self-service store purchase, since it requires the retailer to pick and pack each order.

Additionally, even retailers with efficient supply chains can fall victim to a common drawback of click-and-collect: out of stock merchandise. Specifically, a shopper will order an item online, and be told it’s in stock, only to be disappointed at the pick-up point when the item is actually not available.

The cause: In many cases, when in-store shoppers are browsing, and decide to buy a specific piece of merchandise, the store inventory systems simply aren’t in place to track the item’s removal from distribution.

However, more sophisticated inventory technologies are making it possible to bridge the gap. Target, for example, used new inventory systems to improve its in-stock holiday performance by 20% last year. It also reported record numbers of click-and-collect pickups at brick and mortar stores during this period.

There are many rewards for retailers, but questions as well

As retailers adopt click-and-collect, they need to ask questions such as whether they’ll allow shoppers to make in-store pickups of online-only items that are generally fulfilled from distribution centers. And, will items be priced uniformly across the various fulfillment options a retailer offers? Every retailer must find its own answers as it assesses whether and how to leverage click-and-collect and adapt to the evolving shopping preferences of its customers.

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