5 Click and Collect Considerations

COVID is changing retail fulfillment for good. Omni-channel fulfillment is here to stay. Let’s look at a few interesting retail e-commerce data points between Q2 and Q1 of 2020:

• E-commerce accounted for 16.1% of total retail sales, up 31.8%

• Total e-commerce sales rose to $211B

• Overall retail sales were down by $53B

As more and more purchases move online, how can you control costs and increase foot traffic? Start out by exploring alternate fulfillment models, Click and Collect may be the answer. 

What is Click and Collect? When a customer purchases a product online and collects it in-person. Small retailers are getting crushed by added shipping, delivery, digital marketing and other fulfillment expenses. The problem with a singular online fulfillment approach– it is a one-size fits all model. You are asking small retailers to adopt an entirely different business model while stuck with the infrastructure of in-person fulfillment. 

Some revenue is always better than no revenue. Where does profitability come into play? Pretend for a moment you are a craft brewery built around in-dining experiences. You made $42 per 6 pours (assume you charge $7 per for a 12 ounce pour) and now the majority of your sales come from delivery. That means for the same inventory quantity you make $10 instead of $42 per six pack. Then add on top of that your prep and fulfillment costs. Your margins keep shrinking and shrinking. How do you offset a situation like that? In all honesty, you can’t. 

Small retailers must start thinking about customers through the lens of fulfillment models and answer 3 questions:

• What business model are we building 

• What do customers want from me

• What consumer economic trends impact future 

Stop thinking in terms of the business model you had before COVID-19 or when things go back to normal. The future of commerce smacked us all in the face.

This is where omni-channel strategies like Click and Collect come into play. Customers want the following from us:

• Friction free experiences

• Product visibility

• Data

• Safety

• Better Communication

How can small business retailers price competitively for evolving customer expectations? Let’s walk through 5 considerations for Click and Collect adoption.

1. Friction Free Experiences

Mistake: Not incorporating why your customers buy 

Your customer profiles impact whether or not a Click and Collect model is suited for your retail business. A recently published IBM Report exposed 4 consumer types:

• Value-driven consumers (buys around on value, convenience and simplicity)

• Purpose-driven consumers (products align with customer’s values

• Brand-driven consumers (buy around brand trust)

• Product-driven consumers (care about features)

Figuring out what customers you sell to will determine if a Click and Collect model is right for your retail business.

Solution: Build a shopping experience linked to customer profiles

2. Product visibility

Mistake: Not building for inventory visibility

You can’t succeed with Click and Collect without product visibility. 

Can you provide it to your customers? It may require changes to your business process or investing in technology that can instantly audit inventory levels across sales channels. 

Without inventory consistency across sales channels you can’t track how effectively Click and Collect is working or which product offerings are best suited for this type of fulfillment model. 

A worst case scenario is to create a purchase experience that increases the risk of stock outs. 

Solution: Creating consistent inventory visibility online and offline

3. Data

Mistake: No data about each fulfillment profile

Are you measuring the right things for the right fulfillment channel? What are your customer acquisition costs (CAC)? Measure KPIS for Click and Collect to compare against other fulfillment channels. Measuring:

• Operating costs
• Gross margins
• Post purchase behavior
• Incremental spend
• Product category turnover
• Cost of delivery

Solution: Validate, benchmark and scale around data insights

4. Safety

Mistake: Failing to consider customer safety

Can you answer the questions your customers care about? Where did this come from? How long have you had it? How was it handled? 

Solution: Incorporate safety concerns into the buying experience

5. Better Communication

Mistake: Creating uncertainty about purchase status

Keeping your customers abreast of the status of a product without the need of a phone call or reading an email is mandatory. Can you let them know what the status is at any point in time during the fulfillment process? 

If something goes wrong with the customer’s order how will they get informed? How precise is the time for pickup? 

Think about all the factors that cause uncertainty and make sure you have a plan for it. Customers expect Amazon level status notifications, can you give it to them?

Solution: Remove purchase uncertainty 

Click and Collect purchases are up *60% in 2020.  I hope you'll use our list of considerations before adopting your Click and Collect strategy. Accessing the benefits may prove worth the time and effort. 

Feel free to message me with any questions. 

About Ovalz

Ovalz wants to empower retail e-commerce businesses by continuously auditing inventory levels to avoid stockouts—without clipboards or spreadsheets. Marvin and Albee founded Ovalz after hearing quotes like this one from Kathryn Hoerster, a bakery owner in Silver Spring, MD “We spend time every day on inventory– the more time we can save on that task, the better”. Ovalz was born from stories like Kathryn’s, especially the ones that took place during COVID-19.

Marvin is available across social channels @marvharris on LinkedIn, Twitter and Instagram. 

+ Source: U.S. Census Bureau

*Source: Statista