In this article, we will look at two retail trends: click and collect and reserve and collect. We will explain what they are, how they work and why they are popular with retailers and consumers.
What is click and collect?
Click and collect is a service that allows consumers to select and buy a product online and then collect it in-store or at another named location, such as a pick-up locker. The shopper is allocated a collection window to collect their package. This can range from 30 minutes to 3 – 5 days. The time window often depends on the nature of the goods ordered and the storage resources of the retailer.
We can identify two types of Click and Collect:
1. Click and collect express : the order is prepared in store based on the stock of the store. The time of delivery depends on the time of preparation by the store associates.
2. Click and collect ship to store : the order is prepared by another warehouse and is shipped to the store. The time of delivery depends on the time of preparation and time of delivery to the store.
How does click and collect work?
Click and collect is a simple concept. However, it relies on the retailer having the right technology to keep on top of stock levels, communicate with customers and their online platforms and have the resources to make it happen.
This is how click and collect works:
- The retailer advertises stock online, tagging those products that are available in-store, for delivery or click and collect, by announcing the availability and the delay to obtain it in each store. This delay depends on the availability of products in the store, the fulfilment delay of the store, delay to ship the product in the store (for ship2 store) and open hours of stores. We call it the “available to promise”
- The shopper adds the goods to their online basket.
- At the shopping cart, it is made clear which goods are to be collected by the shopper. In cases such as groceries, it is likely to be all items. But with clothing for example, only some may be available for collection.
- The shopper validates the collection location, day, and time.
- The shopper pays for the products, and the collection details are confirmed.
- The store associate receives a notification to fulfil the order. He checks and takes the products from storage and prepares them so that they are ready for collection.
- The Customer is notified that his order is ready to collect.
- The customer collects the items within their allocated collection window.
The rise and rise of click and collect
Click and collect rose in popularity during the Covid pandemic. And there is evidence that it is here to stay. The What’s in Store for Retail? report by Barclays shows that over 40% of physical stores in the UK are now used as click-and-collect locations, with a similar amount used to process returns. And with these statistics, it is not surprising that more retailers are following. This has led stores such as Primark, which previously shied away from digital, to pilot a click and collect service.
A significant factor behind this shift in buying patterns may be the altered work patterns resulting from the prolonged effects of the COVID-19 pandemic. With store closures, customers rapidly embraced Click and Collect, appreciating its advantages. Today, it has become an integral part of their shopping habits.
Why customers love click and collect
Click and collect offers several advantages to the shopper:
Convenience – Retailers have become skilled at ensuring that packages can be collected as quickly as possible soon after they have been ordered. Shoppers are offered various collection times and can often choose from various pick-up locations.
Confidence - Customers choose click and collect because they are reassured by the “available to promise” and by the fact there is no transporter in the loop
Speed – Retailers blessed with decent storage are at a significant advantage because they can offer fast order handling, making it possible to offer same-day or even 30-minute collections.
Cost – Click and collect is a free service, making it attractive compared to paying for a delivery.
What are the benefits of click and collect for the retailer?
Driving online and in-store traffic – The win-win nature of click and collect is that shoppers go online to select their purchases before coming in-store to collect them. This is a dream for retailers who have, by and large, seen a decline in footfall of physical stores. Buying in-store can be a memorable experience, allowing staff to interact with their customers in a way that isn’t possible online.
Upselling opportunities – Retailers favour in-store collections because they know there is an increased likelihood that customers may spot additional items that they would like to purchase while in the store. Retailers have become increasingly savvy at tempting shoppers to buy on impulse. Combining well-placed promotional items, good displays, and on-site sales staff can help increase this.
Enhancing product availability and minimising in-store surplus – By displaying store inventories online, retailers expand product availability beyond just the distribution center. Furthermore, stores gain an additional channel to sell their inventory.
Cost – By encouraging click and collect, retailers reduce their costs as there is no need to pay for delivery services with this approach.
Supporting omnichannel retail – Offering click-and-collect orders online attracts consumers to the retailer’s website, letting them showcase their full retail offering whilst reminding them where their local stores are. Utilising in-store and online in this way is a great route to boosting loyalty and reminding consumers how and where they can shop with you.
Partnership opportunities – The John Lewis click-and-collect and returns partnership with the Co-op is an example of two retailers partnering for mutual benefit.
What are the challenges of click and collect for the retailer?
For retailers establishing a click and collect operation, there are some immediate challenges:
- Communication – Retailers must clearly explain the new service and its operations across various online and offline communication channels.
- Training for in-store associates – Retailers need to train their store employees on new responsibilities: monitoring fulfillment notifications, preparing and packaging orders, and ensuring orders are delivered to customers in line with the promises made during online purchases.
- Redefining the in-store journey – Retailers must establish a distinct in-store path, complete with signage, to guide customers collecting their orders, ensuring minimal disruption to those shopping in-store.
- Inventory management – For an exceptional Click and Collect experience, retailers need an accurate inventory management system. This entails having a clear view of in-store stocks, and it may be beneficial to maintain safety stock to account for potential inventory discrepancies due to theft or damaged items.
- Online integration – Retailers must update their websites to accommodate and process Click and Collect orders, including payment functionalities.
- Real-time customer notifications – Retailers must provide real-time updates to customers about any changes in order status throughout the fulfillment journey.
What is reserve and collect?
Reserve and collect is a service that allows consumers to check the availability of an item in-store and reserve it before visiting or paying for it. The customer then comes in-store at their convenience to inspect the item and decide whether they would like to buy it.
How does reserve and collect work?
Reserve and collect works similarly to click and collect, but with some important differences, which we will discuss later. This is a step-by-step breakdown of how reserve and collect works:
- The retailer displays inventory online, marking products that can be reserved for pick-up, and indicates the availability and associated wait time for each store. This wait time factors in the store's fulfillment duration and its operating hours. This is termed "available to promise."
- The shopper adds the goods to their basket.
- The shopper highlights the ‘reserve and collect’ option in the shopping cart.
- The shopper reserves the item without making payment and is allocated a collection day and time at their chosen store location.
- The retailer takes the products from storage and prepares them so that they are ready for inspection by the shopper.
- The store associate gets a notification to prepare the order. They retrieve the products from storage and set them aside for pickup.
- The customer is informed that their order is ready for collection.
- Upon arriving within their designated pickup time, the customer collects the items and decides whether to make additional in-store purchases.
The emergence of reserve and collect
Introduced in the early 2010s, "Reserve and Collect" was a retail strategy aimed at increasing in-store traffic using a dedicated widget on e-commerce websites – and it proved effective. This method allows consumers to physically interact with a product in-store without the obligation of an online payment. Recently, as retailers have enhanced their in-store experiences, "Reserve and Collect" has become an even more enticing reason for customers to visit brick-and-mortar locations.
Reserve and collect is also favoured by sectors that have seen in-store traffic and sales decrease. One good example is the airport duty-free market. Research showed that consumers were time short at airports but associated duty-free shops as representing good value across various items, including alcohol, fragrances, and electronics. Reserve and collect is now a popular tactic for duty-free retailers who are using it to drive travellers online before they arrive at the airport to research and select what they’d like to buy, saving them time. Not surprisingly, reserve and collect has boosted sales by increasing impulse purchases from travellers who pick up additional products while browsing.
Why customers love reserve and collect
Reserve and collect offers several advantages to the shopper:
It saves time – Researching online enables the consumer to identify retailers that stock the items they are looking for before venturing into the store to see it.
It is efficient – Reserve and collect eliminates the need to go from one shop to another to find what the shopper wants. Instead, they can simply head to a specific store, knowing it will be there for them to view.
It offers the opportunity to experience the product – Reserve and collect works particularly well with products that the consumers are inexperienced with and want to have that ‘touch and feel’ experience. This can cover an extensive range of products, from nursery equipment for new parents to sporting equipment, clothing, perfume, alcohol, and electronics.
What are the benefits of reserve and collect for the retailer?
Reserve and collect does share some of the benefits of click and collect including driving online and in-store traffic, upselling opportunities, and reduced cost because it eliminates a home delivery and supports an omnichannel retail strategy.
But reserve and collect enjoy some unique benefits of its own. These include:
Differentiation – Retailers with online and in-store offerings have a distinct advantage over established online retailers such as Amazon, Etsy and Not On The High Street. They can offer reserve and collect as a service and deliver a brilliant in-store experience when the customer comes in-store.
Reducing returns and chargebacks – Providing the customer with an opportunity to view an item in-store increases the chances that they will purchase it without returning it. And if they buy in-store, the retailer can eliminate the likelihood of a chargeback.
Locking in researchers - Whilst online tools can help with product research, in-store viewing can massively increase sales conversion. So, by providing the in-store pickup option, retailers are ‘locking in’ researchers for offline purchases by making sure a product is there for them to collect in the store.
Word of mouth – Happy customers talk about their experiences. Consumers who first try new products will happily talk about their experience, persuading more reticent types to view them in-store. This ‘hybrid’ shopping trend could influence the shape of future retail.
Attracting younger shoppers in-store - Younger shoppers increasingly see in-store experiences as unnecessary. The younger they are, the more likely they are to prefer home delivery. Reserve and collect is a fantastic tool to lure the under 40 market into their stores. And marketing teams are already trying new tactics to achieve this, including creating in-store experiences to help increase sales conversion.
What are the challenges of reserve and collect for the retailer?
The challenges associated with "Reserve and Collect" mirror those of "Click and Collect", but the in-store payment aspect introduces unique inventory management issues:
Limitation of reservation per customer – Each online reservation temporarily holds stock in-store. Therefore, it's crucial to set a shorter reservation duration for "Reserve and Collect" (typically one day) compared to "Click and Collect" (usually 7 to 14 days). This is because not all customers who reserve online will pick up their items in-store. Additionally, it's vital to cap the number of identical products a customer can reserve, ensuring inventory remains available for other orders or reservations.
Click and Collect vs. Reserve and Collect
While they bear similarities, the key distinction lies in the payment method. Click and Collect customers settle their bills online at the point of order, whereas Reserve and Collect customers only make payment in-store upon deciding to purchase the item.
In essence, Click and Collect and Reserve and Collect cater to two separate customer desires. Click and Collect primarily ensures efficient collection of goods, contrasting with Reserve and Collect, where the customer's intent is to examine or test the product before confirming their purchase.
However, it's worth noting that Click and Collect and Reserve and Collect can coexist harmoniously.
Key takeaways
Click and collect
Click and collect is a service that allows consumers to select and buy a product online and then collect it in-store or at another named location.
Click and collect offers the shopper several advantages, including convenience, speed, cost, and ease of item return.
There are some distinct benefits of click and collect for retailers. These include driving online traffic in-store, upselling products when the customer is in-store, saving money on home delivery services and supporting omnichannel retail.
Reserve and collect
Reserve and collect is a service that allows consumers to check the availability of an item in-store and reserve it before visiting or paying for it. The customer then comes in-store at their convenience to inspect the item and decide whether they would like to buy it.
Reserve and collect offers several advantages to the shopper. It saves time. It is efficient and offers the consumer the opportunity to experience the product in real life.
Whilst reserve and collect shares some of the benefits of click and collect, it enjoys some of its own, including differentiation from online only retailers, reducing returns and chargebacks, locking in researchers and attracting younger shoppers in-store.
Implementing Reserve and Collect and Click and Collect isn't straightforward. Key challenges for retailers include:
- Navigating the transformation within stores to accommodate the new processes.
- Maintaining an accurate inventory view in-store to uphold the retailer's online promises to consumers.
- Seamlessly integrating these services into the online shopping experience.
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