It’s been 14 years since I had the most productive pint of my career, the one I was drinking with a colleague when we came up with “Click and Collect” as a name to define an idea that seemed mad to most observers.
The idea was to let customers reserve something online and to then come and pick it up in our stores. I was head of eCommerce at Argos, and Terry Duddy had just given me the go ahead to trial the idea
Fourteen years on, and “Check and Reserve”, as it’s now called, has helped Argos win countless multi-channel retail awards, represents a third of Argos’ sales, and I’m convinced, carried Argos through turbulent retail times to be the multi-channel leader it is today.
What I find most intriguing about Click and Collect, is how “fresh” it remains. Only a month ago the digital consulting firm that I now run, the eNova Partnership, was invited to speak at a click and collect conference.
Secretly my team and I wondered what audience would still want to hear about the topic, and how much more we could teach them after more than a decade of click and collect experimentation by retailers. The room was packed, and click and collect seemed to generate as much fascination as ever.
Of course, the goalposts have moved. Whilst a click and collect trial used to make the headlines, nowadays unless it’s as innovative as collection points from schools or coffee shops, it barely makes anyone blink. Anyone, but the customer that is.
Click and collect continues to be one of the single biggest drivers of growth for retailers, with digital leaders like Burberry and John Lewis routinely citing it as a driving force of year-end sales results. The reason for such resilience and growth? Convenience and price – in that order.
No one has yet found a competing solution that makes the customer feel in control of the otherwise treacherous last mile, as well as financially better off. Argos remains the only example of the incredible longevity of Click and Collect. It represents £1.3 billion in sales and has grown at an astonishing 40% per annum since 2003.
To put things in perspective, online market growth rate over the same period has been around 20% per annum, no small achievement in itself! There is no shortage of examples of similar successes with later adopters. Halfords’ click and collect reached an impressive 80% penetration of online orders two years after launch, and now boasts the industry record penetration at 86% of orders.
In our industry buzzwords rarely last more than three or four years: did you notice how omni-channel replaced multi-channel, only to be trumped three years later by “digital transformation”. Click and Collect however, is here to stay.
Companies will keep on coming up with new collection points: Coffee shops (House of Fraser), train stations (John Lewis), schools, and tube stations (Asda). Next will come gyms, offices, more lockers, and more aggregating collection and return service points like Doddle and, dare I say it…the Post Office!
The mistake is to think that such public success and growth necessarily equate to profit. The nuts and bolts of click and collect are not pretty: stock accuracy, order tracking, fulfillment, delivery, PoS interface, staff training, no-shows and returns. The list is endless and fraught with hurdles.
For Halfords its click and collect orders (pick from store, put behind the till, await collection) should be the most profitable online order possible, while many others fulfilled from central warehouse and sent by courier with no delivery charge contribution from customers, are not financially viable in the long run.
New-wave collection points, like lockers, third party stores, will only put more pressure on margins with higher delivery costs for retailers and no chance for that critical impulse pick-up in store.
Good news then. Whichever way we look, there are still years of work ahead for most retailers to perfect their click and collect offering, from the front-end, and the back-end. I’ll raise another glass to Click and Collect!
Andy Morrey, co-founder of eNova Partnership