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By Clement YewTweet
If you type “click and collect” in the search engine, you will notice that businesses such as supermarkets, fashion, furniture, consumer electronics, over-the-counter pharmaceuticals, and so on, have all embraced this retail phenomenon of click-and-collect.
What makes this hybrid form of shopping so appealing? How do retailers create a successful and sustainable click-and-collect strategy?
Why Are More Shoppers Ordering Online and Picking Up In-Store?
There have been huge shifts in consumer behaviour, with e-commerce growing rapidly over the recent years. In Southeast Asia alone, e-commerce sales are expected to cross US$100 billion this year, skyrocketing from 2019’s figure of US$37.22 billion – with the unprecedented global pandemic playing a huge part in the increase of digital consumers and online retail traffic.
Even as the pandemic subsides worldwide, the “buy online, pick up in-store” (BOPIS or BOPUS) business model has been thriving. Also known as click-and-collect, its market is expected to reach US$703.18 Billion by 2027. Before investing in any new equipment, real estate, or creating new click-and-collect fulfilment operations, let us first understand what has driven this massive trend over the last few years.
1. Saves time
According to a 2018 report from Barilliance, 88 per cent of respondents said they used click-and-collect because of speed. Forbes wrote at the time that “micro-shopping trips” (any trip taking less than five minutes) are on the rise “thanks to grocery services that let customers order online and pick up in-store”. Micro-shopping trips increased by 8.7 per cent at Whole Foods stores, and 11% at Whole Foods stores with dedicated pick-up locations after Amazon acquired the chain in August 2017. In another example, Singapore grocery chain Cold Storage cannot guarantee same-day delivery for all orders, with available slots typically ranging one to two days from which the order was placed. However, consumers can choose to click-and-collect their orders, being able to collect groceries on the same day and save one to two days’ worth of waiting time.
2. Saves shipping costs
In the same Barilliance report cited, saving on shipping costs was customers’ second most popular reason for choosing click-and-collect (with 76 per cent of respondents noting it). Uniqlo Singapore is another retailer that offers both delivery and BOPIS. In their delivery scheme, customers are charged a S$6 delivery fee for orders under SG$60, but will not be charged if they opt to click-and-collect.
Where is Click-and-Collect Happening?
As with most developments in e-commerce, industry giants are blazing the click-and-collect trail. Here are some places we have already seen it in action:
- One quarter of all e-commerce sales from beauty retailer Ulta derives from BOPIS orders.
- Sports equipment chain Decathlon offers standard click-and-collect as well as express click-and-collect in Singapore, which are both free for general goods. The latter even allows customers to collect purchased goods within 2 hours of their online checkout.
- In 2022, McDonald’s Singapore introduced McDonald’s Mobile Order – a service on their app which allows customers to place orders beforehand and then pick them up when they are ready, either as a takeaway from the counter or at their Drive-Thru.
- Singapore multinational technological company Grab has a self-pick-up option for users ordering food through their app, allowing them to both skip the queue and save on delivery fees while enjoying the cuisine of their choice.
How Do Retailers Benefit?
Click-and-collect works for shoppers and just about any business with brick-and-mortar locations. Cybertill, a leading cloud-based software innovator, found that 65 per cent of shoppers make additional purchases in-store when picking up their online orders.
Click-and-collect also reduces cart abandonment. According to Barilliance, shoppers frequently abandon their online carts before purchasing because they find out too late about unexpected shipping costs, lack of express shipping, and an unfavourable return policy – all of which are easily circumvented in click-and-collect.
Click-and-collect is also an integral part of the omnichannel customer experience, allowing customers more freedom, more options, and fewer barriers to fulfilment and 67 per cent of locals opt to shop on websites before visiting physical stores, but 56 per cent still prefer to buy in store.
What Do Retailers Need to Do to Make Click-and-Collect Successful?
Click-and-collect is not a panacea for every business. For many stores, especially smaller ones, space is a constraint or show-stopper because click-and-collect requires a dedicated pickup location that is both clear and conveniently accessible to customers, as well as a dedicated area for orders waiting to be picked up by the consumers. This channel is also more labour-intensive for retailers than in-store shopping because it requires store associates to pack and manage the orders.
When it comes to implementing in-store click-and-collect, retailers should:
- Create an efficient warehouse system of distributing and collecting items, while keeping real-time inventory
- Connect customer data online and offline
- Direct shoppers toward the pick-up location with clarity and convenience
- Train team members on new protocol and customer service
Do You Need Special Hardware to Offer Click-and-Collect Service to Customers?
For retailers to succeed at BOPIS, they will likely need automated infrastructures specifically designed to make the transaction fast and convenient, such as the PickUpPort™ workstation – the innovation of Norwegian technology company AutoStore. Aiming to make automation accessible to everyone, AutoStore, the pioneer in Cube Storage Automation, harnesses progression in Automated Storage and Retrieval Systems (ASRS) to continuously develop order-fulfilment solutions. This in turn helps brands in their achievement of efficiency gains within the storage and retrieval of goods.
With the workstation in place, customers simply place their orders online, travel to a retail store or fulfilment centre, and approach a PickUpPort kiosk. Behind the scenes, AutoStore Robots retrieve the ordered goods from the storage grid and move them to the PickUpPort. The shopper then opens a drawer to retrieve their merchandise. Not only does it provide a frictionless omnichannel shopping experience, but an added benefit is that it boosts in-store traffic and sales by driving consumers to a physical storefront.
Additionally, such stores reduce carbon footprints as there is no extraneous deliveries by commercial trucks, and will appeal to the new generation of ecologically engaged consumers. For example, AutoStore’s order-fulfilment solutions help brands and their sustainability efforts through utilising high-density design – increasing their storage capacity while reducing overall warehouse footprint by 75 per cent. Their robots also utilise regenerative energy and return power to battery each time it lowers a bin and reduces speed. Overall, this helps brands see a 75 per cent reduction in electrical costs.
What About the Software User Interface for Click-and-Collect Fulfilment?
Though the physical implementation of click-and-collect is more involved, equally challenging and impactful to the customer experience is a well-designed and integrated digital user interface. Retailers need sophisticated software that faithfully reflects the store’s brand; creates a seamless and intuitive customer experience; offers ways to further engage the customer via personalisation powered by data; and streamlines store operations through real-time tracking and visibility of inventory and order status.
Developing a custom digital user interface can be quite a costly and lengthy undertaking. Leveraging a standardised software as a service (SaaS) product such as AutoStore’s Qubit™ that can be quickly integrated and tailored to your store’s brand promise can greatly improve your time to market and overall ROI.
Adopting the Right Click-and-Collect Strategy
The click-and-collect retail paradigm is now more deeply entrenched, and not just appealing to the millennial or younger audiences. Many leading retailers are investing heavily in new technologies and training for their employees.
Retailers may first collate all the accumulated research on consumer buying habits to persuade top management why going “self-service” is important.
Next, they need to figure out space requirements and processes for fulfilling click-and-collect sales, which might include significant store layout modifications, locker and kiosk installations, and staff retraining.
Above all, retailers need to make the customer experience as customisable, frictionless, and convenient as possible. In today’s business environment, that requires investing in new equipment, automation, and software built specifically for the click-and-collect shoppers.
About the author: Clement Yew is the Director of Business Development of AutoStore, Southeast Asia. This is an opinion column. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of this publication.
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