Click and Collect and Short Term Thinking

Click and Collect in store has become the latest Holy Grail in Retail enticing Retailers with the promise of driving conversions both online and in the store. There are a myriad of recent research that illustrates the popularity of click and collect with consumers. In general, the main reasons why consumers opt for click and collect is the high cost of deliveries and convenience. Would click and collect just be a niche option if the last mile delivery problem was solved?

Consumer Perspective

Most consumers use click and collect due to the cost of delivery and inconvenient delivery times. Some consumers prefer picking up in store because they can pick up their merchandise at a time that suits them, perhaps on their way to or from work, without having to be at home for a prescribed period – typically two or four hours – to receive and sign for their delivery.

My most recent personal experience with click and collect went as follows:

• Purchase Online.
• Drive to the store.
• Wait in line for 5 minutes.
• Wait for the clerk to retrieve my package 2 minutes.
• Listen to the clerk plug some other product I had no interest. Become slightly annoyed.
• Provide ID and sign.
• Drive home.

How is this convenient?

Retailer Perspective

Assuming a Retailer’s inventory systems are good, click and collect most significant value proposition for a retailer is that you get the consumer in the door and there is a much higher opportunity for conversion with the customer in the store. The CEO of Macy’s spoke of the success of Click and Collect at Macy’s:

It's an appointment to come in. She is going to buy. She's already made the decision. And when she does, she doesn't know this yet, but she's going to spend about 125 percent of what she intended to spend, that's just been the track record."

This quote illustrates short-term thinking at it’s finest; focusing on short term profits at the expense of long-term success. This is a classic example of an incumbent retailer doing just enough to keep up with a more innovative competitor (i.e. Amazon), and not innovating new solutions that will provide better choices for consumers. The future of retail lies in marrying the desire for convenience with the desire of immediacy (see Amazon Prime Now) and in most cases click and collect in store does not address these needs. The incumbent retailer benefits from the old way of doing business - driving foot traffic to physical stores. And make no mistake, bricks and mortar retailers are exceptionally good at this, and despite being very good at it, at some point it won’t matter and they may never be able to catch up with more innovative competitors.

And, while there are some specific circumstances where click and collect does offer value and convenience for the consumer, ultimately click and collect primarily benefits the retailer and feels like a temporary solution until the last mile delivery problem is solved.

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