What is click & collect? How does it work? How it benefits retailers & consumers
By FarEye | October 13, 2022
What is click and collect?
Click & collect, also known as ‘buy online, pickup in-store’ (BOPIS), is the process where consumers order items online and pick them up later in person.
How does click and collect work?
Pickup locations vary from secure lockers and in-store pickup places, to curbside pickup spots, where consumers simply pull into the store's parking lot and notify employees that they've arrived. From there, retail workers deliver the customer's order directly to their vehicle.
This combines the convenience of shopping online with the convenience of picking up orders on the same day of purchase, removing the costly last-mile delivery leg from the picture (53% of total shipping costs are attributed to the last mile). Click & collect has existed for many years, but really entered the spotlight in 2020 as the pandemic caused store closures and sales to move online. U.S click & collect sales grew over 100% from 2019 to 2020.
Top Reasons Consumers Choose to Use Click & Collect Services
To avoid shipping charges, save time by not having to shop in-store and to pick up orders on the day of purchase. Time and money saved for both consumers and retailers. No wonder this is a trend that is taking off. In the U.S alone, click & collect sales will top $100B in 2022, a double digit increase from last year.1 This profitable sales channel is becoming a large part of retailer’s strategies and consumers are getting on board. Walmart drew one in four dollars from click & collect in 2021 with room to grow further in 2022.2 The click & collect channel is on track to drive roughly 11% of all eCommerce sales for retailers next year. “It’s something people are used to doing now,” said Suzy Davidkhanian, principal analyst for retail and e-commerce at Insider Intelligence.2
How Click & Collect Benefits the Consumer
Perceived as a cheaper and faster way to shop, click and collect is a consumer trend that will continue to grow. Here are some of the key consumer benefits that are driving the adoption of this nontraditional sales channel:
No Shipping Costs
Simply put, consumers avoid shipping costs when there is no last-mile delivery. With 95% of consumers preferring free-one-day delivery as their ideal delivery method, click & collect answers the call and is only a short drive away.3
The time saved here is twofold: consumers do not need to wait for delivery and they do not need to spend time browsing aisles for the products they are looking for. Purchases can be made in a matter of clicks and delivery takes as long as it takes to drive to the retailer.
It can be a gamble shopping in-store for a specific product, only to find out the product is no longer in-stock or not carried by the retailer. With click & collect, consumers can guarantee item availability before purchase and heading to the store.
Whether for personal or pandemic-related reasons, consumers do not need to interact with any other people with options such as curbside pickup. This can be a concern for many people and the added flexibility that click & collect provides can create a competitive advantage for those who need it.
An Extra Option
Consumers are no longer stuck between in-store and online shopping. Click & collect is a happy medium that gives consumers added choice in how they want to buy and collect their purchases. This added flexibility is welcomed by consumers and retailers alike.
How Click & Collect Benefits Retailers
Click & collect isn’t just a sales channel for the consumer’s benefit. It is also a powerful source of revenue for retailers. In fact, 42% of retailers rank click & collect as their top sales driver last year.4 Here are some of the key benefits click & collect fulfillment can grant retailers:
No Shipping Costs
The costliest leg of the delivery chain - the last mile - is removed. That is worth repeating. Retailers can offer the same products and deliver them through a fulfillment method that consumers enjoy for substantially lower transport costs than if they were to deliver to consumers’ homes.
No Risk of Shipping Delays
Shipping delays as a result of driver shortages or inefficient routing can impact the customer experience and reflect poorly on the brand. Click & collect removes this risk entirely and puts the delivery experience and any risk of delay squarely in the hands of the consumers themselves.
Retailers can repurpose current in-store staff to handle click & collect orders without having to hire additional workers. By leveraging current retail staff and eliminating drivers and other delivery personnel, retailers can enjoy a leaner, more productive workforce.
Click & collect leverages brick & mortar stores and their inventories to fulfill orders. This process can integrate nicely with or pave the way for fulfilling orders placed online that are to be delivered to consumers’ homes.
When consumers enter stores to pick up their online orders, retailers can realize tremendous upsell opportunities. A whopping 85% of consumers who enter stores to pick up their online orders purchase additional items in-store.5
High Profit Channel
Aggregating all of the above points, click & collect is a powerful profit driver for retailers as it adds flexibility and choice to current fulfillment models, driving revenues and reducing delivery costs simultaneously. Retailers can enjoy the benefits of eCommerce sales without having to deliver the costly last-mile leg.
Click & Collect: Delivering Excellence
Click & collect is beneficial for consumers and retailers alike. But, as with all good things in life, there are challenges in implementing successful click & collect fulfillment processes that retailers must be mindful of. Here are some of the key things retailers must consider when fulfilling orders through click & collect:
Retailers must ensure adequate infrastructure of their stores, including dedicated parking, kiosks, storage and signage to enable easy navigation and a positive consumer experience. The inventory that a brick & mortar store typically carries will need to be able to absorb the added demand that fulfilling online orders will require. This may require more store space to be allocated to inventory or a more efficient use of space.
Although click & collect can grant labor efficiencies, retail stores must be appropriately staffed to support both in-store foot traffic and click & collect order fulfillment. Associates must be adequately trained to deliver both an optimal in-store experience as well as an optimal click & collect experience.
Supply Chain Visibility
Retailers must have complete supply chain visibility to ensure an optimal click & collect strategy and consumer experience. Click & collect fulfillment puts strain on in-store inventory levels, as stores are now fulfilling both in-store and online orders. Robust, end-to-end supply chain visibility can allow retailers to proactively plan for demand or supply challenges and adapt to them in any market environment.
For many retailers the cost of in-store picking is much higher than picking at distribution and fulfillment centers. In-store fulfillment typically costs 1.5 to 2 times more on a cost-per-pick basis.
Retailers must get click & collect right to ensure a great consumer experience. Executing this can be difficult as stores weren’t designed with fulfillment in mind, nor are they equipped with the technology to do so at scale. Particularly during peak times, it’s hard for most stores to manage exceptions, ensure accurate picks, and tightly control cycle times to consumers.6
Having the right technology in place is a must when orchestrating click & collect fulfillment. Stores must have accurate, real-time inventory technology that keeps managers and consumers informed of product availability and potential delays. Tech-enabled platforms can allow retailers to optimize store fulfillments, manage inventories during times of peak demand and communicate status updates with consumers.
FarEye - Orchestrating Retail Worldwide
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