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The retail industry has witnessed a significant transformation in recent years with the rise of e-commerce and digital technologies. Despite the Covid period, one of the prominent innovations that emerged during this period is the Click & Collect service.
Click & Collect, also known as "Buy Online, Pick Up In-Store" (BOPIS), has gained immense popularity among retailers and consumers. While it is generally perceived as a straightforward and convenient shopping solution, a great misunderstanding exists surrounding this fulfilment method.
This article will explore the nuances of the Click & Collect service, its complexities, challenges, and untapped potential.
What is Click & Collect?
Click & Collect enables customers to browse and purchase products online and then pick them up at a physical store (or pick-up point) at their convenience. This service bridges the gap between digital and physical shopping experiences, providing consumers the best of both worlds. Shoppers can take advantage of the convenience of online shopping without waiting for delivery and avoid shipping costs.
On the other hand, retailers benefit from reduced shipping expenses and increased foot traffic to their brick-and-mortar stores. Additionally, Click & Collect opens opportunities for upselling and cross-selling when customers come to pick up their orders in-store.
Nevertheless, do all the e-commerce stores that provide Click & Collect extend such a service?
Let’s see the different nuances of Click & Collect you typically find in the market and why we speak of the “misconception of Click & Collect”.
What a true Click & Collect service requires
At first look, Click & Collect seems like an easy and reliable service for retailers and consumers. However, this view oversimplifies the intricate challenges involved. Creating an effective Click & Collect system demands a seamless integration of various components:
1. Inventory management
For Click & Collect to work flawlessly, real-time inventory visibility is crucial. Retailers must ensure that their online stores accurately reflect the availability of products in physical stores. This necessitates a robust inventory management system capable of simultaneously handling both online and in-store purchases.
2. Order processing and orchestration
Efficient order processing and order orchestration are essential to meet customer expectations. Orders must be promptly prepared and made available for pickup within specified timeframes. Any delays or errors in order fulfilment will lead to dissatisfied customers.
3. Technological infrastructure
Creating a successful Click & Collect system demands a strong technological setup. This means smoothly bringing together both online and offline systems. These encompass your website or app, point-of-sale (POS) systems, inventory databases, and communication channels. To achieve this, you'll need to connect these elements effectively, either through intricate integration or a dedicated orchestration solution. This harmonious union ensures customers are promptly alerted when their orders are ready for pickup.
4. Store operations
Click & Collect affects in-store operations significantly. Stores must be organised, and the staff must be adequately trained to manage the influx of online orders, accurately pick and pack items, and provide excellent customer service during pickups. Failure to meet these demands can result in long wait times and a negative shopping experience.
The label "Click & Collect" can be misused or misunderstood when the service fails to meet these core principles of convenience, integration, and a seamless shopping experience between the online and offline realms.
Click & Collect from a central warehouse
In this scenario, when a customer orders online, the products are shipped from a central warehouse (typically the e-commerce warehouse) to the selected store for the customer to pick up.
Shipping goods to the store from a warehouse can still be considered a form of Click & Collect, but it might not fully embody the true concept of service as previously envisioned.
Let us explore the limitation of shipping goods to a store from a warehouse:
• Centralised Inventory: The products are not stored at the physical store. Instead, they are part of a centralised inventory in a warehouse or distribution centre.
• Potential Delays: Since the products need to be shipped from the warehouse to the store, there can be delays in making the items available for pickup, especially if the warehouse is located far from the store or if there are logistical issues.
• Logistics Implications: The logistics of shipping products from the warehouse to the store adds another layer of complexity and costs to the Click & Collect process.
Comparing the Click & Collect services involving shipment from a central stock to using in-store stock reveals significant differences in operational logistics, customer experience, and overall effectiveness. Let's analyze these two approaches throughout various stages of the selling process:
1. Inventory management
Central Stock: All Click & Collect orders are fulfilled from a singular distribution centre or warehouse when relying on a central stock. Although this approach might necessitate less precise and real-time inventory management, it confines the stock exclusively to the central location, lacking visibility into in-store stock levels.
In-Store Stock: Opting for in-store stock means each physical store functions as a fulfilment centre. In this scenario, maintaining accurate inventory becomes paramount to prevent overselling and disappointing customers with out-of-stock items.
2. Product assortment
• Central Stock: Fulfilling click & collect orders from a central stock could allow for a broader product assortment. Customers gain access to a wider range of products, even those not available at their nearest store. Conversely, it doesn't permit purchasing products exclusive to the physical store.
• In-Store Stock: Utilising in-store stock constrains the assortment to what's physically present at the chosen location. However, it offers the advantage of same-day availability for those items.
3. Delivery speed
• Central Stock: Shipping from a central stock generally takes longer, particularly for customers located far from the distribution centre. Those in remote areas might experience extended delivery times compared to in-store stock, where immediate pickup is possible from the closest store.
• In-Store Stock: Fulfilling Click & Collect orders through in-store stock ensures quicker availability. Customers can collect their orders on the same day or within a short timeframe, even as little as 1 hour, considerably reducing delivery times for local shoppers.
4. Operational complexity
• Central Stock: Managing a central stock system necessitates a robust logistics and transportation infrastructure to ship products from the central location to various stores for customer pickup. This can result in increased costs, potential delays, and more chances for order fulfilment errors. Efficient coordination is essential for timely deliveries.
• In-Store Stock: Employing in-store stock simplifies logistics as products are already on-site. However, it requires well-organized inventory tracking within each store.
5. Customer convenience
• Central Stock: Customers benefit from the convenience of a diverse product assortment, increasing the likelihood of finding what they need. Nonetheless, they might encounter longer wait times for item availability, introducing delays and inconveniences that counteract the goal of a seamless Click & Collect experience.
• In-Store Stock: One of Click & Collect's core benefits is customer convenience. Real-time store inventory checks and swift pickups, possibly within an hour, serve as significant selling points. In-store stock ensures immediate availability for select items, a feature highly appealing to those favouring same-day pickup. However, the selection might be narrower than with a central stock system.
6. In-store experience
• Central Stock: When products aren't readily accessible in the store, the opportunity for customers to engage with the physical retail environment diminishes, diluting the in-store experience.
• In-Store Stock: Click & Collect bridges online and in-store shopping, with In-Store Stock capabilities encouraging customers to visit physical stores.
7. Reduced upselling opportunities
• Central Stock: Centralised product sourcing reduces upselling opportunities.
• In-Store Stock: Utilising in-store stock opens the door for retailers to interact with customers during the pickup process, potentially enabling upselling or cross-selling of additional items.
8. Returns and exchanges
• Central Stock: Handling returns and exchanges for click & collect orders from a central stock typically involves shipping items back to the central location, which can be time-consuming and less convenient for customers.
• In-Store Stock: In-store stock allows customers to process returns and exchanges directly at the store, streamlining the process and making it more immediate.
9. Resilience to stockouts
• Central Stock: In cases of stockouts at the central location, customers might face extended waiting times or unavailability of certain items until restocked.
• In-Store Stock: Each store acts as an independent inventory source, so if a product isn't available in one store, customers may find it in another nearby location.
Using a central stock for the Click & Collect service provides a broader product assortment and centralised inventory management, but it can result in longer delivery times and more intricate logistics. Conversely, relying on in-store stock allows for quicker availability and convenient pickups, but it might feature a limited product range and necessitate an efficient in-store inventory management solution.
Boost in-store sales and customer satisfaction
Click & Collect during checkout
Many merchants propose Click & Collect as a delivery option during checkout. However, there are subtle yet significant differences between offering Click & Collect at checkout and using it as a Call to Action at the outset of the e-commerce purchasing journey. Let's delve into these distinctions:
1. Placement and timing
• At Checkout: Presenting Click & Collect during checkout involves offering it as a delivery option in the final stages of the online purchase process. Typically, it's listed alongside other delivery choices, like home delivery or express shipping, without being positioned as a selling point to clients.
• As a Call to Action: When presented as a call to action, Click & Collect is promoted earlier in the customer journey, often on the homepage, product pages, or dedicated banners across the website. This acts as a proactive incentive for customers to select this option before initiating their purchase.
2. Customer awareness
• At Checkout: Customers reaching the checkout page have already committed to purchasing. Offering Click & Collect at this point assumes they know the option and actively seek a convenient delivery method.
• As a Call to Action: Introducing Click & Collect as a call to action enhances the service's visibility, even for customers who might not have initially considered it. This draws attention to its benefits and encourages customers to choose Click & Collect over other alternatives.
3. Customer decision-making
• At Checkout: Presenting Click & Collect during checkout works well for customers already acquainted with the service and preferring it over home delivery. They can easily select it without getting sidetracked from completing their purchase.
• As a Call to Action: This approach can shape customers' decisions earlier in the process. By emphasising the advantages of Click & Collect, customers who initially opted for home delivery might be swayed towards the more convenient pick-up option.
4. Conversion Rates
• At Checkout: When Click & Collect is exclusively offered during checkout, it relies on customers being aware of and desiring the service. While it may boost conversions for customers actively seeking this option, it might miss potential customers who would have preferred Click & Collect if they had known about it earlier.
• As a Call to Action: By promoting Click & Collect as a call to action, businesses can increase the overall adoption of the service. This helps convert customers who were uncertain or uninformed about the option, possibly leading to a higher Click & Collect usage rate.
5. Operational Impact
• At Checkout: Restricting Click & Collect to the checkout stage could complicate backend logistics, as you'll only learn later in the process whether the goods are available or not. This approach often involves shipping goods from a central warehouse, as explained earlier. Otherwise, there's a risk of discovering too late that the selected store lacks the goods, significantly lowering service quality and customer experience.
• As a Call to Action: Introducing Click & Collect as a call to action necessitates a prepared operational infrastructure to handle increased customer foot traffic for order pickups. This might involve refining inventory management, establishing dedicated pick-up processes and timing, and ensuring well-trained staff handle in-store collections efficiently.
Offering Click & Collect as a call to action is a proactive approach that can lead to higher adoption rates. However, it demands the correct setup and technical infrastructure to manage customer expectations and ensure a seamless experience.
Offering it solely at checkout assumes customers are already aware of and interested in the service, potentially missing out on converting customers who would have preferred Click & Collect with early promotion. Clearly, Click & Collect as a call to action is the optimal approach, requiring the appropriate solution to support the business process.
What a true Click & Collect service must have
Within an expansive Click & Collect model, products are readily available at physical stores, with customers making online purchases for later pickup. The key attributes of this Click & Collect service encompass:
• In-Store Availability: Clear visibility of products stocked physically and/or their availability at the brick-and-mortar store during purchase.
• Real-Time Inventory: The online store reflects live inventory levels, letting customers ascertain product availability or potential availability before buying.
• Convenience and Speed: Swift order pickup is possible – even within an hour – as the products reside in-store. No shipping or waiting for delivery is necessary.
• Seamless Integration: Online and offline experiences harmonise, ensuring a smooth customer shopping journey.
Despite the challenges and possible complexities, authentic Click & Collect offers substantial potential for retailers.
By addressing issues and leveraging its strengths, retailers can unlock numerous advantages. Lets go into more detail below:
Benefits of Click & Collect
Enhanced customer experience
Click & Collect provides a seamless and convenient shopping venture when executed adeptly. The flexibility it offers is valued by customers, allowing them to shop on their terms without waiting for deliveries.
Increased sales opportunities
Click & Collect drives foot traffic to physical stores, opening avenues for retailers to upsell and cross-sell. Encouraging store visits can lead to supplementary purchases beyond the initial online order.
Cost savings
Retailers can curtail shipping expenses tied to home deliveries and mitigate potential costs tied to returns. Click & Collect also minimises the risk of failed deliveries due to absent customers at the delivery address.
Data insights
Click & Collect transactions yield precious data about customer preferences, shopping behaviours, and inventory demands. Retailers can capitalise on this data to optimise inventory, refine marketing strategies, and elevate overall customer experiences.
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