PickupARTISTS — the rise of click and collect

Retail in 2014 faces a dilemma. Shoppers now purchase more than ever online. Today we require delivery more than ever, hate paying for it, and usually have to collect from a local post office anyway.

Waitrose click and collect lockers have been widely used since 2013

This post is an excerpt from a piece I penned back in 2014, looking at the rising trends and consumer behaviour forecasting for 2015.

Delivery has been long identified as a major thorn in the side of online giants from ASOS to Amazon with studies showing 58% of people would be encouraged to shop online more if delivery costs were lower (compared with just 24% who would be encouraged by more precise delivery slots (Mintel, 2014)).

Currently the delivery business is one of fierce competition with huge amounts of investment and innovation from the likes of DPD’s predict service allowing customers to pinpoint their delivery times and market disrupting startup Uber piloting a trackable courier service in central Manhattan. However it’s likely due to the small ticket size of home delivery items that margins are so low that further reductions in door to door delivery can no longer realistically be made and why until recently, the investment has targeted that second problem — precision delivery.

However a possible solution that has been quietly gaining steam and is now poised to erupt in the UK. Consolidating delivery to hubs using click and collect, allows for lower cost deliveries at the price of requiring the consumer to make part of the journey. Currently with 90% of people in the UK within 1mile of a click and collect location, over 5500 locations in the UK and 2/3 of retailers offering the service its adoption sits at only 35% (CollectPlus, 2014). Poised to target and reduce the effort required on the consumer side and really kick start the era of Click and Collect, retail giant Amazon announced a massive expansion of its tube station lockers in June.

Ebay’s press event to announce the success of the Argos partnership.
“More than half of consumers are simply interested in cheaper delivery. This should invite parcel delivery companies and their retail clients to ask, how can we modify delivery services to remove this barrier to online purchasing?”

Allowing busy Londoners to collect items with minimal extra effort on their commutes, the grocery retailers are getting in on the act too with Tesco, Asda and Waitrose have been installing large numbers of pick up points in London stations. Outside of London, Amazon has also been running a pilot locker scheme at Milton Keynes’ railway station, with further rollout to the South East expected to follow (Emarketer, 2014), (Evening Standard 2014).

Equally, a joint pilot by Ebay/Argos to enable click and collect of items from online sellers from Argos stores has this year been so successful at bridging the Off=On trend gap that it is increasing its locations from 150–650 by 2015 (Post and Parcel 2014). Whilst not perfect in a symbiosis, these kind of agreements provide more consolidated (and therefore less expensive) delivery networks for internet retailers whilst driving footfall in physical stores which may help protect further radical expansion from regulatory intervention.

These investments, small as they are in current form are already beginning to take effect with a noted 5% increase in adoption between 2013 and 2014 (Emarketer, 2014). Anticipated to be in full swing by the end of 2014 the presence of Click and Collect will be massively boosted by 2015 and on an upward curve with an estimated 76% of all shoppers using Click and Collect style services by 2017, in 2014 (Planet Retail, 2014).