How Retail’s Elite Succeed with Click and Collect

It is not every day that meeting consumer demand also brings oversized rewards for a retailer. But check out these numbers: order sizes 2.5 times the average and 1 in 5 customers buying an additional item. Those are real results retailers are reporting from implementing click and collect, and any retailer can produce the same results if they do it right. But those kinds of numbers also come only by getting click and collect, also called buy online pickup in store (BOPIS/BOPUS), right. And it’s not always clear how to pull that off. Some retailers have actually been forced to implement fees for click and collect, or ruin the concept by making impatient click-and-collect customers stand on a long line at the back of the store. Luckily, retailers can learn from the experiences of their peers by adhering to emerging best practices for how to satisfy eager click-and-collect customers and turn the service into a money maker. Why Click and Collect Resonates Click and collect is quickly transitioning from differentiator to baseline consumer expectation. In fact, 20% of shoppers buy online and pickup in-store nearly once a month and 43% of these shoppers make additional purchases when picking up products ordered online, according to RIS’ “Shopper Insight 360” benchmark research report. The service has become table stakes and is having a positive impact on the bottom line. Here’s why: Convenience. Shoppers value convenience, selection and instant gratification. A quick and easy shopping experience outranks a personalized one. Speed. If stores can have products ready for pickup in as little as an hour, they achieve a service level matched only by a precious few e-commerce retailers with same-day delivery, which is currently offered only in dense urban areas. Availability. Sixty-seven percent of retailers are increasing their investment in technology to support this channel, reports RIS’ “2018 Store Experience Study.” Almost half (48%) have up to date click-and-collect technology and 24% will implement it within two years. Target, Walmart, Zara and Kohls are among those offering click and collect with great success today. Risk. As many as 31% of consumers have experienced package theft, reports a NY Times article, helping bolster the click-and-collect model as a more secure way to engage in e-commerce. Competitive pressure and consumer expectations are not the only reasons retailers are jumping on board. Early adopters have demonstrated that click and collect can be good for the bottom line. Nearly half (44%) of online shoppers have made have made additional purchases in-store when using ship-to-store, according to UPS’ “Pulse of the Online Shopper” report. Several retailers have reported higher average order values from click-and-collect orders than either in-store orders or online orders in general, according to Retail Systems Research. The combination of high consumer expectations and retailer profitability ramps up the pressure for others to follow suit. Below is a four-step plan to get there. #1 Clarify Goals for Click and Collect Clear business goals will fuel design, metrics, and fulfillment and operations processes. Common retailer objectives include enhancing shopper experience, capturing marketshare, reducing shipping costs and driving store traffic and incremental revenues. Understanding your customer is key. Analyze demographic and psychographic data by region, alongside current order patterns: A given region may show a high demand for overnight delivery, offering potential to shift some of this to lower-cost BOPIS, while another is content to wait several days. An ideal click-and-collect experience will differ by product type, customer base and individual preferences, and can often be situational. Are they busy moms? (They are for Kroger) Commuters? Shift workers? These will impact the timing, location and model. For Kohl’s, success in reaching its goals of enhancing the customer experience and driving traffic into stores through BOPUS drove the retailer to more aggressively market the channel last year. And in August the department store chain announced its plans to scale click and collect across the chain in the coming months. #2 Identify the Right Model Click and collect operations can take many forms: At checkout or the customer service desk. This can be the best option for small stores with limited staff. Whenever possible, avoid requiring click-and-collect customers to wait online with in-store shoppers. At a dedicated order pickup area. Ideally these are located at the front of the store and are well marked and staffed. Some Target remodels will feature separate entrances for fast trips such as click and collect. Curbside/drive-thru. This provides the ultimate in convenience, particularly in suburban, car-dependent areas. Target is also on track to offer drive-up click and collect in more than 500 stores this year. Lockers. Lockers enables self-service click and collect with no wait or staffing, even 24/7. Lockers with built-in interactive screens and personalization still provide the chance to upsell with suggestions and even coupons based on purchases and history. Walmart offers supercharged lockers in the form of a tower that vends the item after the customer scans their receipt. Nineteen percent of US Millennial shoppers say parcel lockers would be valuable to them, according to GfK. Alternate pickup locations. Some retailers are taking click-and-collect orders to high traffic areas such as parking lots and train stations. In the UK, where click and collect is more mature, click and commute is a growing trend. Each model has specific implications for fulfillment processes, staffing and space requirements. These retailers are putting their own spin on the click-and-collect concept: Zara debuted a pop-up shop for ordering and collecting online orders adjacent to its flagship. Shoppers can make returns and receive orders the same day, if placed before 2 pm, or the next day, if placed in the afternoon. Zara is also using robots to automate order picking, delivering click-and-collect orders to a mailbox for shopper collection. After growing its BOPIS program sales volume by 45% in eight years, including curbside delivery, Nordstrom is now offering the ability to reserve merchandise online and try on in stores. Loblaw is expanding its two-hour PC Express click-and-collect service not only to more supermarkets and its Shoppers Drug Mart brand, but also to Canada’s GO commuter train stations. Amazon continues to push the envelope on delivery convenience. In addition to expanding its locker program to Whole Foods, the e-commerce giant is also delivering inside homes, to car trunks, and now to Hubs by Amazon. The program is an extension of the locker concept to apartments and residences, and uniquely, the order does not have to come from Amazon – it’s a last-step delivery option for FedEx, UPS and private mail, making it available to all retailers. #3 Define the Customer Experience Click and collect is the brand experience, sped up and streamlined. So the retailer must set customer expectations and then prepare to meet or exceed them while still delivering an authentic branded experience. Fulfillment promises are a big component of this: One hour? Four hours? Same day? Consider recognizing and rewarding high value customers who click and collect, such as tucking a note or bonus item into the package. Customer satisfaction and perfect service are high priorities at Australian retailer Bras and Things. Its click-and-collect service requires the customer to try on the item before they leave the store. As a result, one in five customers buys an additional item, with click and collect now accounting for 30% of the retailer’s online sales. “Click and collect helps bring digital to life inside our stores and really brings customers into stores and also brings store customers into our digital environment,” says Sven Lindell, chief digital officer, Bras and Things. #4 Operationalize: Keys to a seamless experience The foundations of click and collect include real-time inventory and workable fulfillment processes that include proper staffing and tools. Get real-time inventory. Seventy-eight percent of retailers named inventory visibility a top 10 strategic priority for 2018 in RIS’ “Store Experience Study 2018.” That’s because seeing where things are is critical to locate and promise items with accuracy with all forms of omnichannel fulfillment, including click and collect. This may require bolting on an order management system. Choose a fulfillment model. Orders can be filled from warehouses, stores or store transfers. Some regard store fulfillment as the only true click and collect because it enables extremely short availability windows. Allocate space. Where will orders be amassed? Packed? Picked up? Will you offer free, dedicated parking, or need a drive-thru? Design fulfillment processes. This starts with the brand promise and user experrience: SLAs, packaging, where the customer will be united with their order. For store fulfillment, staff must know whether to prioritize in-store customers or one-hour orders. Store managers appreciate being able to throttle incoming orders to avoid negative impacts. Staff properly. Volume will dictate staffing needs and shifts. A training plan is essential, especially for small stores where associates will balance in-store customers and order picking. Provide tools. To support this, stores will need tools: Mobile devices with scanning to create pick lists, then locate, pick and verify orders and receive alerts on timing. Bar code printers to identify packages. Software to control order flow, pick lists, packing and pickup. Consider security. In practice, many retailers skip checking proof of identity or order documentation for pickup, but this is key to avoiding fraud. Measure: Collect data on who, where, how and when customers make pickups to help refine the program and identify new opportunities. Retail CEOs Chime in on Click and Collect Moving Forward with Click and Collect Pressure from same-day shipment, rising customer expectations and the chance to drive store traffic and incremental revenue are fueling retailers’ enthusiasm for click and collect. But to deliver on their goals, click-and-collect programs must be built on a strong foundation: clear goals, a well-considered customer experience and delivery model, and a deliberate approach to execution.

How Retail’s Elite Succeed with Click and Collect

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