What’s all the fuss about click and collect fulfillment?

The 2020 holiday shopping season placed unprecedented strain on countless retailers and delivery partners across the globe. Between the COVID-19 lockdowns and record-high delivery volumes, logistics networks struggled to keep up with demand. Unfortunately, the shipping crisis is still looming.

Lingering complications from the pandemic, supply shortages, a labor shortage, and surging online sales  are converging  to throw supply chains into a tailspin—again.

“The pressures on global supply chains have not eased, and we do not expect them to any time soon,” Bob Biesterfeld, CEO of C.H. Robinson, one of the world’s largest logistics firms,  told CNN Business .

For today’s consumers who expect fast service, sending apologies for unexpected delays isn’t enough—businesses have to give them options.

That’s where click and collect comes in: an order fulfillment strategy that lets customers purchase items online, then pick them up at a physical location on their own time. This gives customers maximum control over their online shopping experience while boosting sales and cutting costs for businesses.

What is click & collect?

Click and collect is an omnichannel fulfillment strategy where shoppers pick up their online orders at a designated location. Here’s how click and collect works:

1. The customer places an order via the company’s online store or mobile app and selects the pickup option at checkout.
2. Employees prepare the items for pickup.
3. The company notifies the customer of the pickup time.
4. The customer arrives at the designated collection point, shows proof of purchase, and collects their items.

There are three main types of click and collect services retailers implement:

Buy online, pickup in store (BOPIS)

Online shoppers collect their purchased items inside a physical store after placing a purchase.

Curbside pickup

Customers drive up to a physical retail store and employees bring the purchased goods out to the customer’s vehicle.

Remote locker pickup

Customers collect their purchased items at an affiliated pickup point, such as a UPS, FedEx, or post office. One of the most popular iterations of this tactic is Amazon’s Hub Locker service, a self-service kiosk that allows shoppers to pick up packages at designated lockers located in more than 900 U.S. cities.

Click and collect vs. local delivery

Both of these fulfillment strategies have gained popularity over the past couple of years. Let’s compare them.

Local delivery is an alternative to shipping with a carrier like UPS or FedEx. When customers purchase products online, the merchant delivers them to the customer rather than a third party delivery service, solving the last mile carrier issues.

Local delivery lets merchants bypass potential shipping delays and take more control over their fulfillment process. Additionally, data from Shopify shows that shoppers who choose local delivery at checkout have up to a 19% higher conversion rate than shoppers who select standard delivery options.

69% of shoppers prefer home delivery over curbside pickup, according to Nielsen. However, using local delivery has some downsides. Local stores assume responsibility for coordinating fulfillment on their own. They’re also on the hook if items get damaged or lost en route. This requires additional staff and higher delivery fees to protect margins.

Bottom line: local delivery is a great option for companies that have the resources to execute it, but click and collect may be a safer option that still gives customers the flexibility they want.

Growth of click and collect

The click and collect model has been around for a while. But as consumers have grown frustrated with shipping delays and avoid large crowds, click and collect is surging.

In 2016, less than one third of shoppers utilized click and collect services. However, between March and December 2020, more than half of shoppers chose to pick up their orders in-store or curbside, according to Numerator Insights. Further, two-thirds of new click and collect users plan to use the service post-COVID.

In the past, click and collect was a nice-to-have option for retailers. But now that customers are privy to the convenience, lower costs, click and collect is a must-have offering to stay competitive and optimize customer experiences.

5 benefits of click and collect

When executed correctly, there are clear advantages to click and collect fulfillment for both retailers and consumers.

1. More sales, fewer returns

Click and collect customers spend an average of $40 on unplanned purchases when they come into the store for pickup. There’s even a term for these shoppers: “super customers.”

On top of that, 77% of retailers that offer click and collect experience lower return volumes, according to Internet Retailing.

3. Cost control

Click and collect services transfer the cost of the final mile delivery to the customer, helping retailers cut logistics and shipping costs and increase gross profits.

4. More convenience and control for customers

Customers can avoid what they may view as exorbitant shipping fees with the added benefit of being able to physically inspect their items before they accept the order.

Store pickup also enables the customer to seek immediate customer service, and refuse or return the order with minimal hassle. Ultimately, this method gives customers maximum control over their buyer experience.

What are the challenges of click and collect?

Before you go all-in on click and collect, make sure you address these potential challenges:

1. Pressure to meet customer expectations

Customers expect click and collect orders to be ready whenever they’re told to arrive. Delays or congestion at the pickup location defeats the purpose of this strategy, considering long lines tend to drive shoppers away from stores.

2. Pickup location miscommunication

If you have multiple pickup locations, shoppers might accidentally go to the wrong one, causing complications and frustration. It’s important to remind customers exactly where to go in their order confirmation, whether through text, call, or email notifications.

3. Staffing issues

Sorting and preparing items for in-store or curbside pickup requires additional labor. Make sure you have enough store employees to prepare for the influx of BOPIS orders, especially during the holiday season.

Integrating click and collect into your order management process

With its many subprocesses, order management is already a complex chain of workflows and hand-offs that must go according to plan to meet customer expectations and satisfy business requirements. Click and collect fulfillment does add another layer of complexity, but offers strong return on investment when done properly.

Click and collect is a technology-dependent service and will require integrated backend processes. Most importantly, your order management system must provide real-time inventory management and visibility. When an order is received, you’ll need to rely on an order management system to either assign the order request to the designated pickup location or generate a transfer order request and dispatch it to a store or depot that has the appropriate stock.

Transfer orders involve more hand-offs, each of which needs to be accompanied by a digital workflow so your staff can track orders and customers can be kept in the loop. With an advanced inventory management solution, you should be able to transfer inventory and track items by bin number, serial number, description, weight, and price.

Whether orders are filled in-store or transferred to the pickup location, you’ll want optimized picking, packing, and shipping so that the correct items are pulled quickly, efficiently, and at cost. Achieving this typically involves organizing warehouse and stockrooms in accordance with First-In, First-Out (FIFO) or Last-in, First-Out (LIFO) principles, and providing workers with predetermined picking routes and packaging instructions.

To build better customer profiles and cater to specific preferences, your order management system should be equipped to collect customer info both online and in-store. This also means customers should be able to complete payment at the time of their online check-out or via your POS system when they come in for pickup.

Best practices to capitalize on the click and collect market opportunity

The primary reasons consumers choose to buy online and pick up in-store are convenience and speed—every part of your order process needs to be designed to meet these customer expectations.

Communication

Most consumers making click and collect orders expect instant confirmation of their order, while 78% expect to pick up their order within 24 hours. Internal processes need to be swift and each hand-off should trigger an automated customer-facing update. Customer updates are generally communicated via email or SMS message, and should include the following:

• Purchase confirmation: This lists order items, includes the invoice, and pickup instructions
• Shipping update: Notifies the customer their order has shipped and the estimated arrival time
• Ready for pick up: Order has arrived and is ready for pick up and a recap of pickup instructions
• Pickup reminder: Send pickup reminders at appropriate intervals

Accurate pickup windows

Remember, customers have chosen this option for convenience. If you miss a customer’s promised pickup window you might lose their business. Collect data on fulfillment cycle times so your pickup estimates are accurate, and keep safety stock of popular items to avoid lengthy procurement cycles.

Dedicated pickup areas

Don’t make your customers traverse the store to get their pickup. Only 8% of online buyers are willing to go to the back of the store to get their pickup order. Have a dedicated pickup area with a sales attendant to check customers out or use self-checkout lockers like Walmart and Home Depot.

Offer personalized promotions

It’s true that in-store shopping trips are most profitable for retailers because customers make unplanned purchases. According to Forbes, 85% of click and collect customers make an additional purchase when they arrive at the store.

By using the customer data you have been collecting to build shopper profiles, you can further boost this percentage by sending personalized coupons (for in-store use) to customers who make online purchases. This same tactic can be used to coax online-only shoppers into the store.

Final thoughts

With the availability of affordable digital solutions to support click and collect, this fulfillment option is not only available to industry giants like Walmart and Target, but growing retailers as well. To reap the benefits of click and collect fulfillment, your company will need to:

• Unify data and workflows across your order management framework
• Have access to real-time inventory and item tracking
• Provide timely and accurate customer updates through automated notifications
• Leverage customer data to offer more personalized services and promotions
• Optimize every aspect of the order process for speed and convenience

Instead of waiting for the next holiday rush, now is the perfect time to consider how click and collect fulfillment could bear gifts for your company and its customers.