If ‘Click and Collect’ is your Amazon defence strategy, you’re probably screwed.
Australian retailers were slow starters in offering click and collect, lagging well-behind the UK and US between 2000 and 2015.
That’s changed in the last year — 46% of retailers now offer in-store pickup and returns, well ahead of the US (31%) and Europe (36%). There’s nothing like the the threat of Amazon to get people moving.
The customer value proposition for click-and-collect is half-baked. On the plus side, customers get the instant gratification of online shopping, but they simultaneously agree to take on half of the distribution. Click and collect doesn’t exist to delight customers, it just saves them a bit of money by making them them one of the cogs in the commerce wheel.
Dragging your customers into your logistics and distribution shouldn’t be considered a strategic response to increased competition, but for some reason click and collect is.
Of course — I get why retailers like click and collect. It locks the sale in immediately, and of course almost 50% of customers will top-up their order with an unplanned purchase while in-store.
There are two behavioural themes in play that I think many retailers miss:
- We’re squeezing a lot more into life and want to be protected from annoying logistics. Virgin Active invented the ‘full-service gym’ which includes everything from towels to hair-conditioner, and grew 28% in Australia last year. Virgin Active has the same gym equipment as all of its competitors, but it differentiates on an undeniable behavioural insight — given the chance, most people will pay an extra $3 a day to not have to drag a wet towel around with them.
- Convenience is disproportionally valuable to customers. Australians forked out almost a billion dollars in ATM withdrawal fees last year just to avoid walking an extra block or two. Appliances Online has become Australia’s largest online retailer of appliances in just over a decade because every part of their product focuses on convenience; they’ll deliver free, and take away your old appliances at no cost.
The best brands focus on doing at least one of these things well. The true disruptors (like Uber) do both.
Amazon won’t win simply because they have low prices. They’ll win because at some point in the next five years they’ll be the only company with the logistics capability to allow you to buy flowers at 3pm, arrive home at 5pm and have them already sitting in vase on your kitchen bench. It’s not the products and pricing that’s made Amazon successful, it’s the fact they fight like hell to protect customers from annoying logistics. One click checkout, Amazon Prime and the marketplace all originate out of this passion.
Click and collect is the opposite of removing friction. It’s adding it.
For retailers thinking of experimenting with Click and Collect, I’d suggest running a different experiment first. Choose 1,000 metro customers, and offer to deliver your product to them wherever they are, at whatever time they want, and charge them an extra $10 for it. And take away the packaging to save them a trip outside.
Protect them from the logistics, and see how much they love you for it.
