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The Chaos Behind Click & Collect
Australian online shoppers are reeling in the opportunities that Click & Collect provide, but are retailers keeping up with the craziness that it’s ensuring?
In a recent statement by Christine Holgate, the CEO of Australia Post, click and collect is starting to cause ‘chaos’ for retailers across the country. Not only is it upsetting retailers, but it’s also displeasing landlords and courier companies.
“It’s creating chaos when [retailers] use their individual stores to act as warehouses and collection points,” explained Ms Holgate to The Age following the release of the full-year results in August.
In the U.S, 43 per cent of retailers offer a Click & Collect option, and in Europe, 78 per cent do the same. Collectively, 57 per cent of global brick-and-mortar retailers provide this service to its customers – it’s an addition to the traditional strategy that’s becoming a common practice.
While Click & Collect have plenty of benefits and is on its way to becoming the norm for retailers and customer alike, there are some key pros and cons that businesses have to really think about before investing in a collection locker.
The Pros of Click and Collect:
- Consumers Want Convenience
Everyone wants convenience, and since E-commerce prides itself on the mastery of comfort, it seems only fitting that Click & Collect offers the same principles. Across the globe, retailers such as Zara, Bunnings and Nordstrom have embraced Click & Collect. Allowing a customer to make their way to a parcel locker at their leisure is a cheaper alternative to failed deliveries and follow-ups from the shopper.
- An Opportunity to Upsell
When a customer who ordered something online comes into a store to collect their goods, there’s a perfect opportunity to push some additional products to them. If they’re not interested upfront, the shopper has the chance to meander around the store and find something they’d like to purchase on a whim.
- Removes the Last-Mile
The Last Mile is one of the most challenging and expensive aspects of operating an omnichannel business. Removing this aspect altogether with Click & Collect can help reduce the overall costs of delivery.
“Click and collect brings more people into store, which drives more discretionary sales. That’s a great outcome for retailers and [landlords] as it’s driving more people into shopping centres,” explained Ben Franzi, the GM for Parcels and Express Services at Australia Post.
However, with all positives come the negatives. In 2018, Click & Collect represented 16 per cent of collective e-commerce purchases, meaning it’s slowly becoming one of the more popular options for online shoppers.
Cons of Click & Collect:
- Finding a Click & Collect Area
It’s not just about offering Click & Collect; it’s about following through with the service, too. Many retailers are opting to use their own stores as a means for a Click & Collect service spot. As an alternative to using a physical store for these collection locations, many retailers turn to using warehouse spaces within shopping centres. Either way, this is a costly procedure that can lead to a ‘headache’ for retailers and landlords alike.
- Upgrading the Digital System
While it’s no surprise that the latest tech can benefit a retailer in many ways, they can be costly and require substantial maintenance to work efficiently. Retailers need software that accounts for account creation, management, ordering, inventory tracking and POS. According to Smart Company, only 25 per cent of brands report that they’re ready to adapt to future shopping channels, leaving 75 per cent unaccountable for these changes.
Australia Post’s StarTrack facilitates 82 per cent of Australia’s E-Commerce deliveries. “Landlords don’t want a thousand couriers running around … being visible within the shopping centre,” explained Mr Franzi to The Age. “If you’ve got 500 stores all doing click and collect, all picking up from an external warehouse and dropping it in-store, that’s a lot of couriers coming through that shopping centre daily.”
So, what’s the issue for landlords? Retail leases often sit on the foundation of the store’s turnover rates. If there’s a rise in turnover, the landlord can ultimately raise the price for rent. Sounds good so far, right? Well, if a customer makes a purchase online instead of inside the store, those sales don’t always count, as they’re unable to get tracked, which poses a risk for landlords.
So, what’s the future for Click & Collect? It’s clear that it won’t be going away any time soon, but there are a few measures that need to be ironed out before it becomes too large to control.
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