The New Last-Mile Fulfilment Service for Online Retailers
Offering customers competitive and convenient delivery options has long been recognised as a great way to differentiate any online retail venture. Now there’s another option to consider, as collection point networks become mainstream in Australia.
Click-and-collect (buy online, pickup from store) is emerging as a strong growth area for many retailers across the globe. In the US and the UK, some leading retailers are now seeing 40 to 50 percent of their online sales collected from store, while local multichannels are ramping up investment in this area.
One driver of demand for this service is the customer’s ability to choose when they collect. Click-and-collect shoppers enjoy the benefits of buying online without having to be at home for the delivery, explains Julian Leach, Co-founder of ParcelPoint.
“As consumers we have all experienced that sinking feeling when we arrive home to a missed delivery card,” he says. “It’s generally a major inconvenience to collect a parcel from the post office or wait at home for a re-delivery. Who has time to take a morning off work every time they receive a parcel?”
A Click-and-Collect Alternative: Collection Point Networks
ParcelPoint is currently rolling out a network of collection points across Australia, providing online retailers with an alternative to in-house click-and-collect fulfilment.
This year, more than 50 million deliveries nation-wide are expected to fail because no one is home to answer the doorbell. That’s more than one in four residential deliveries. Of course, the rapid growth of online shopping is contributing to the problem, resulting in more consumer deliveries while a number of employers are banning personal deliveries to the workplace.
Online retailers typically see half of their checkout abandonment at the delivery step, based on customer dissatisfaction with options. UK research also indicates 44 percent of online shoppers claiming home delivery concerns have prevented them from buying, while 39 percent maintain bad delivery experiences have prevented ordering again from the same company.
Collection points are among a range of new delivery methods gaining traction in Australia and overseas, enabling any online retailer to offer last-mile control to their customers at the point of purchase.
“The idea is simple – as a retailer, you deliver the parcel to a convenient location for your customer to pickup when it suits them,” Leach explains. “The collection point may be staff-assisted (e.g. over the counter at a convenience store) or a self-service locker. Either way, the principle is that it is an efficient, cost-effective way for an online retailer to develop local points-of-presence without having to invest in a network of physical stores.”
As an example, Amazon recently launched its own locker-based collection points in the US and UK – fair enough if you happen to be the world’s largest online retailer, but not feasible for most. For many online retailers it makes sense to use an independent network of collection points, or one operated by a carrier.
Collection points are well established in Europe and North America. Collect+ in the UK partners with online retailers including ASOS to enable customers to collect and return parcels at thousands of corner stores. Very.co.uk, another retailer working with Collect+, reported 1-in-5 customer deliveries passing through a collection point last Christmas.
So what should online retailers look for when selecting a collection point network?
“Essentially, customers want to get their parcels when and where it suits them, requiring a network that is both ultra-local and open at convenient hours,” says Leach.
Selecting a Collection Point Network: An Online Retail Checklist
- Extended hours – 45% of collections take place outside traditional post office opening hours when the customer is given the option. One in three occur on a weekday evening, indicating strong customer demand for collecting on the way home from work.
- Proximity – Customers don’t want to travel far – they might not even have a car. International research indicates 47% of online shoppers are prepared to travel less than 1.5km for a collection. Coverage of residential areas is a must.
- Real-time notification – Information is a key part of the delivery experience. Instant notification, via email or SMS, keeps customers up-to-date. The immediacy of these communications reinforces the excitement of receiving a parcel and helps combat return-to-sender issues.
- Quick service in a trusted environment – No one likes to queue at the post office. Fast, easy service is critical alongside a securely managed network.
How to best introduce click-and-collect options into any fulfilment strategy:
- Promote it to drive sales – Don’t wait for the checkout. Ensure customers browsing your sites are made aware that you support delivery choice. This will increase the number of customers who make it to the checkout.
- Integrate seamlessly – Provide simple selection within the checkout, to facilitate conversion rather than distract the customer.
- Know your customer – Recommend pickup locations based on customer billing address. For returning customers, make sure you provide a quick-select option to use the same collection point as last time.
- Don’t assume one size fits all – A cost-effective collection option sits well alongside premium services, such as 3-hour or after-hours deliveries. Let the customer choose what suits them.
Convenience is a critical area of focus for online retailers, ranking top (alongside price) among reasons why people choose to shop online.
At the end of the day, it will be the retailers that can affordably offer the most shipping options that are successful, while missing out could prove fatal for some, Leach warns.
“End-to-end customer experience is what counts, including convenience at the last-mile when the customer receives their parcel.”