Many consumers are turning to click and collect for their online purchases rather than opting for home delivery. In fact, this is a growing market as shoppers recognise the convenience of picking up their goods when it suits them. For example, retailers such as Boots and Next reported that 75% and 50% of online purchases were picked up in store last Christmas. And, according to GlobalData’s latest report, the click and collect market is forecast to increase by 55.6% over the next five years to reach £9.6bn by 2022.
The good news for bricks and mortar stores is that estimates suggest 70% of those collecting or returning parcels make impulse in-store purchases.
With the benefits of click and collect clear, many retailers are expanding their use of the service to incorporate other brands, be it complementary or competitive. For example, Next recently announced it will offer an Amazon counter service in hundreds of its stores, enabling Amazon customers to collect their packages directly from Next counters.
The value of partnerships
At first glance, the move may seem surprising as the two retailers could be considered competitors; think homeware, for example. However, the collaboration provides significant opportunities for both retailers, one of which is engaging with shoppers that would otherwise be out of reach.
This move may be the start of a new trend with other brands quickly following suit, which is significant given the forecast growth of the click and collect market. Global Data predicts that click and collect will make up more than 12% of online sales by 2023, which means retailers could use click and collect partnerships to increase footfall into stores — a key challenge for them today. This decline in footfall, combined with the hefty leases faced by some retailers, is putting increased pressure on physical retailers to be more competitive.
Collaboration, or cross-pollination, is one way that retailers are making expensive shop floor space work harder for them. Partnerships can drive many benefits: greater brand awareness, an increase in footfall; and importantly, additional revenue. To-date, we have mainly seen this between retailers with non-competing offerings, but it can also extend to those who are direct competitors too.
The Next and Amazon initiative is an example of this, with the two retailers teaming up to drive mutual benefits. So how can retailers that choose to implement a click and collect strategy best capitalise on its potential and encourage click and collect shoppers to spend more time (and money) whilst they’re in store?
Maximising the opportunity
Click and collect partnerships provide retailers with an opportunity to increase footfall, often from new and different consumer segments. And once these potential shoppers are in store, retailers can engage with them and encourage them to stay longer.
This can be achieved through coupons (targeted and personalised based on their past purchases or what they’re collecting). These can relate to the online purchase or can be complementary — a coupon for an in-store coffee for example, which encourages shoppers to linger for longer and adds to the overall shopping experience. Other approaches target incremental spend — Sports Direct offer a five-pound voucher to spend in store for every click and collect order to encourage further in-store purchases.
And click and collect in-store provides consumers with a more rewarding experience than collecting their parcel from alternatives such as designated self-service collection points or lockers. The latter is completely devoid of human contact and is solely focused on convenience. It’s a functional exercise that presents a missed opportunity.
With click and collect, retailers have the perfect way to differentiate themselves from Amazon and deliver both convenience and experience. Customers can place the order online, collect in-store quickly and easily, and receive personalised offers and promotions to make the experience that much better.
In today’s competitive retail landscape retailers must do everything that they can to encourage shoppers into store and to keep them there as long as possible. While this will require a combination of tools and approaches, click and collect partnerships such as between Amazon and Next, could have a significant impact on the high street.
Click and collect itself is the perfect hybrid, merging the convenience of online and the experience of shopping in-store. Add other brands and retailers to the equation and it could provide increased footfall into stores and give retailers the opportunity to reach new audience segments, improving the shopping experience and maximising sales opportunities.
David Buckingham is the CEO at point-of-sale marketing specialist Ecrebo