Sounding Board: Diamond in the rough or fool’s gold
By Len Lewis
Some call click-and-collect the new wave of retailing. Others see it as three of the most dangerous words in the retail lexicon. Click-and-collect was designed to combat Internet-only shopping. Customers go to a retailer’s site, make purchases and opt to pick it up in store rather than having it delivered to their homes. It is a nifty idea considering that more than 50% of people surveyed have had problems with home delivery of goods—either not getting them on-time, being away when an order arrives or finding out at the last minute the item they ordered was not available. In fact, London-based consultant OC&C forecasts that products ordered online and collected at stores are growing faster than home delivery and will surpass home delivery in 2015. Many retailers, including supermarkets, are waxing poetic about the click-and-collect model; how it is more convenient for shoppers and that pickups bring more people into the store. Not to mention that it is a step toward the new Holy Grail of retailing, omni-channel marketing. All good arguments in theory and practice. In the UK, Amazon—whose home delivery service is getting lots of attention on both sides of the pond—went a step further by installing lockers at some shopping centers and supermarkets. Customers unlock them by using a code sent to their smartphones. At present, there are reportedly 9,000 Amazon lockers around the country. Walmart’s Asda stores have begun testing temperature-controlled lockers with three zones—chilled, frozen and ambient. They are unlocked by a QR code or order number that is sent to customers following payment. Tesco and Waitrose have gone a step further. In a deal with Transport for London, which operates the London Underground, consumers can pick up their purchases at certain subway stations. In France, drive-through groceries, while less profitable than conventional stores, are becoming increasingly popular, accounting for 2.6% of the country’s retail food market. In the U.S. Walmart has initiated a click-and-collect model including drive-through collection points at about 19 stores around Denver. Harris Teeter developed a very successful model that is likely to show up at a lot of Kroger stores since the acquisition. The concept is also being tested at Giant Foods and Stop & Shop. But allow me to play devil’s advocate. I am not convinced this is the greatest thing since sliced bread for several reasons. Click–and-collect is convenience-oriented. However that may be trumped by reluctance of people to have store personnel pick out their meat, produce and deli items, categories that can make or break a store. If customers end up with something they do not like, who do you think they are going blame? And how convenient is it to have customers wait in line to pick up their order at a busy store. Furthermore, some retailers have opted for delayed pickup, asking people to wait a day before picking up their order. Do you ask customers to fork over a pickup or picking fee to get orders in a timelier manner? Of course, there is the possibility of curbside pickup. A boon for busy moms, but the problem is that pickup areas do not necessarily have to be supermarkets, thereby removing the potential for incremental sales. In recent years, the industry has focused on fine-tuning the in-store experience in order to make traditional grocery shopping less of a chore. Many retailers have done just that. There is more creativity and variety in retailing now then ever before. But how compatible is this with a click-and-collect strategy that is largely designed to help people avoid in-store shopping. The younger generation is already questioning the need for big box and traditional brick-and-mortar stores now that they have access to the entire retail universe at the palm of their hands. I have always believed that great retailing is a combination of art and science. Art means enticing people into the store, to make the shopping trip an experience in which people lose themselves. To quote Howard Schultz, CEO of Starbucks: “You walk into a retail store and if there’s a sense of entertainment, excitement and electricity, you want to be there.” I would hate to see that lost as technology pushes forward.