Many Australian retailers are implementing clever distribution options in response to customer demand and overseas activity, but with the country’s geographical state and changing consumer lifestyle habits, it’s an element that needs to be introduced across the entire online network.
As customers come to expect more from online shopping experiences, international retailers such as John Lewis are searching for innovative ways to dominate the market, but what are our local retailers doing to compete?
John Lewis announced wide-scale plans to extend its click-and-collect service so that customers can collect online purchases from local convenience stores across the UK. This concept is already well established across Europe.
John Lewis managing director Andy Street spoke last week at the British Retail Consortium Symposium, announcing that the retail giant is seeking a new partnership to allow customers to pick up online purchases from a national chain of shops.
This model is already gaining traction in Australia, with companies such as ParcelPoint, Temando and Australia Post coming to the rescue of Australian retailers, offering a network of local collection points, where online shoppers can have their parcels delivered to instead of their home or work. The “convenience” stores are open long hours and weekends.
ParcelPoint’s co-founder Julian Leach says for click-and-collect to be effective, the collection points must be both “ultra-local” and open at convenient hours.
“Customers want to pick up their parcel on their short walk from the bus stop to their front door, requiring a network of hundreds or thousands of collection points. Post offices are not open late enough and bricks-and-clicks retailers are not local enough, so local retailers such as convenience stores offer an alternative network,” he says.
Retailers everywhere are embracing click-and-collect options. John Lewis already offers a UK click-and-collect service through its grocery leg, Waitrose, allowing customers to make orders from John Lewis but pick up in a Waitrose store. The option to pick up in-store from John Lewis is also available.
Pureplay online retailer, ASOS, is also leading the way with its click-and-collect service, partnering with Collect+ to launch a service that allows customers to pick up an online order in one of 4,500 participating stores. Amazon has also teamed up with UK supermarket chain, The Co-operative, enabling shoppers to pick up Amazon purchases in The Co-op stores.
Where local credit is due, Australian businesses have begun to compete in the click-and-collect game too, with Coles and Woolworths among the first local players to roll out click-and-collect capabilities. Harvey Norman, JB Hi Fi and Masters Home Improvement are among other retailers to introduce similar options.
Carl Hartmann from national freight aggregation specialist, Temando, says click-and-collect is an “absolute critical part” of any retail best practice fulfilment strategy.
“For bricks and mortar retailers like John Lewis, that are fortunate enough to have a large network of stores, it’s a huge competitive advantage that can really help differentiate their value proposition,” he says.
“What is driving this demand is what I’ve been calling ‘Hyper-Local-Mobile’ – mobile commerce demand by consumers, largely driven while they are shopping in physical stores, or using mobile devices to find products locally.
“The fulfillment expectations are near instantaneous – either directly by the consumer that same day by click and collect, or alternatively with a direct shipment from the store – ideally in under three hours.
“Failure to offer that level of experience, abandonment is typically more than 95 percent, and conversions practically nothing. Get it right, and it’s a golden ticket – I’ve seen abandonment drop by around 50-60 percent with conversions more than 5 percent.”
Hartmann says the large Australian retailers have been quick to roll out convenient distribution options.
“We’ve enabled almost all the large retailers to move to store based fulfilment models, and practically all of them offer click-and-collect. With some retailers, we’re seeing click-and-collect take up rates of over 50 percent, but with average rates of around 25 percent.
“We’ve now got it so turn-key that all we need is an inventory feed from the retailer, for them to setup their stores as a once off, and enable the option in their rule engine and before you know it they’ve rolled out both click-and-collect and ship from store with very little effort.”
Hartmann says Temando is working with ParcelPoint to offer consumers a national parcel collection point network.
Implementing the click-and-collect offerings into current platforms has been a challenge, Hartmann says.
“The challenge is that almost none of the popular shopping carts outside the top-end enterprise level platforms support the basics needed to achieve this – stock on hand at multiple locations, store based fulfillment processes – so it’s not really an easy thing to achieve.”
Online is an increasingly important channel for all retailers, and it’s paramount that all retailers continue to maximise choice in delivery.