Click-and-collect isn’t a digital strategy, it’s a customer experience initiative
November’s epic sales events have become the mainstay of retailers’ pre-Christmas calendars. Singles Day made a big splash in Australia and New Zealand, with several retailers seeing record revenues. Black Friday seemed to start on the Monday, and Cyber Monday was a hangover cure for the prior weekend. Who knows when Boxing Day actually starts now?
The timing – and creativity – of these events evolve each year as brands seek consumer attention in an ever more log-jammed space. With Singles Day on November 11, a fortnight ahead of the rest, it is expected to be a more aggressive event in 2020, although the links with Armistice Day make this a treacherous space for marketers.
It was particularly interesting watching the anti-sale movement gathering pace this year. Many sustainably conscious brands ramped up the anti-consumerist rhetoric, with some notably fantastic campaigns from the likes of Allbirds and Patagonia.
As we hurtle into another Christmas season of excess and frivolity, retailers continue to fight the revenue-versus-margin balance, all in the pursuit of maximising opportunity.
It must be remembered that click-and-collect is not a digital strategy, it is a consumer experience strategy embraced by the educated customer, who is ever more informed – there’s a general consensus that 60 to 80 per cent of consumers are researching products online. When a customer logs on to your website, they’ve come for a brand experience. The combined impact of all retail, marketing and content experiences leads to this.
While physical retail still accounts for more than 85 per cent of transacted revenue across Australia, there is now a heavy lean towards blending these experiences. Data suggests that the lifetime value of a consumer engaging across channels is 2.3 times that of one engaging through a single medium.
You just can’t beat the personal service. The discerning eye of the modern consumer demands dedication to the process and store staff to appreciate the opportunity in front of them.
The current ideal for consumer experience is the single customer view, where we can blend data from both in-store and digital transactions. This tends to be driven around a loyalty program, and requires a notable investment in POS, middleware and online solutions (not to mention continued investment in a tech-enabled performance marketing team). Concepts around the utilisation of this data could include:
- Welcome series and promotion
- AI-driven product recommendations
- AI-driven on-site content
- CRM segmentation (gender, geolocation, frequency, ranging, etc)
- Follow-up (leave a review, second purchase discount, etc.)
Marketing teams should drive online consumers in-store for fittings, to test products and take part in VIP events, specials and clearance deals. In turn, loyal in-store consumers should be pushed to engage online to continually drive product knowledge, tertiary purchases, social advocacy and brand loyalty.
The consumer is used to the immediacy of online shipping, and thus there needs to be dedicated attention to the physical execution of click-and-collect. This should manifest as exclusive pick-up areas, akin to the “internet booking” lane at cinemas.
Educated retailers should be nurturing consumer tastes and prepared with up-sell garments, accessories and add-ons. This personal product knowledge cannot be replicated online, and the cost of a click-and-collect operation should be offset through these cross-sells. Invest in the data, educate the staff, record the results – and continually finesse.
Several permutations of click-and-collect have evolved in the market.
Ship to store allows your online site to operate from a dedicated inventory warehouse; orders are fulfilled from the warehouse and sent to the store for collection. This is the quick and dirty version of click-and-collect, and ensures there are no inventory errors; it can be easily implemented within a customised checkout. There is some customer convenience here, but the operational efficiency is lost as the same pick, pack and ship costs are incurred. In this instance, it is paramount that the retailer leverages the up-sell opportunity.
Reserve in-store allows a consumer to reserve a garment in-store, which is held for them for a period of time. This requires the exposure of store inventory, but is a low-resistance path online as it does not require a customer checkout. This does generate the need for an accurate communication system as it’s not ideal to hold up valuable inventory.
Endless aisle is the utopia for larger-format retailers, as this exposes all stock to all channels at all times. This requires a deep investment in a technology stack that allows for real-time inventory and the subsequent allocation of stock. Consumers then choose their store, and products are either picked directly, or consolidated across multiple stores with automated internal transfers. This structure greatly enhances the retailer’s ability to transact.
Do customers always collect?
A strange phenomenon is that around 15 to 20 per cent of customers never come to collect their product. Life just gets in the way. And some savvy consumers have realised this is a quick path to free shipping, as the in-store customer service team can rarely work out how to charge the customer the freight and want the parcel clear of their area.
Product returns are also a key part of the consumer loyalty loop, and should be considered an extension of click-and-collect. As discussed, the consumer expects a single brand engagement, and thus should be able to return any product in-store if purchased online. This gives the retailer a fantastic opportunity to avoid the refund, and drive both an exchange and an up-sell.
The retailer’s focus should always be around lifetime value, and this is a fantastic opportunity to convert an online consumer into an omnichannel one of greater value. The warmth of person-to-person contact can convert a moment of tension into one of reciprocity and advocacy.
Awkward freight items
Those awkward freight items are an ideal candidate for click-and-collect. This allows consumers to avoid exorbitant freight costs and the retailer to absolve themselves of any damaged freight. Furthermore, this is relevant in the B2B space, where tradies collecting bulky items can save the significant costs of having items shipped to site, and can control the immediacy of collection. Retailers need to consider dedicated pick-up lanes, pre-loaded trailers, live local and global inventory, pick-up time and direct messaging for this market.
The politics of sales attribution
The biggest resistance to click-and-collect is often from the physical store managers, as they fear that the attribution of a sale will passed to the online store while they have had to fund a staff member to support the collection, all for no return on their margin line.
There are multiple contentious solutions to this involving the application of a customer attribution flag in the CRM/POS/ERP. Some retailers lean to a persistent first touch, others to a last-touch engagement. Other solutions lie around geographic territories of postcodes, while the more liberal just divide the online revenue by the number of stores.
Regardless of the politics engaged, and solution derived, it is pivotal to have this discussion with your senior teams to ensure there is a universal drive to push the brand forward.
Not an afterthought, but a strategy
Click-and-collect is not a simple bolt-on. It requires a deep investment in technology, data movements, in-store hardware, staff training, smart marketers and some internal politics. However, it has now become a core expectation to have a singular unified brand experience that places control firmly in the customer’s grasp, enabling them to transact when, where and how they choose. It is the retailer’s role to enable the consumer and wrap the brand experience around them at every given opportunity.
Service wins. Every time.
Todd Welling is group CEO and founder of Overdose Digital. Overdose is a consultancy service that drives fiscal growth outcomes for their clients through digitally let strategies.
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