Is the U.S. ready for click and collect this holiday season?

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While many European countries have embraced click and collect, the U.S. has yet to catch up.

Click and collect poses a huge opportunity for retailers this holiday shopping season.

In the recently published NRF 2017 Holiday Planning Playbook, convenience was one of the four most important factors that consumers will consider as they plan their purchases. And for many shoppers, click and collect is a very convenient option. Plus, click and collect fills that immediacy need.

While many European countries have embraced click and collect, the U.S. has yet to catch up. But if retailers want to experience the monetary opportunities that the channel has to offer, they will have to build out infrastructure to support the level of adoption, assuming shoppers are ready to support it.

Danny Silverman

FierceRetail spoke with Danny Silverman, senior vice president of customer success at Clavis Insight, to get his thoughts on the growth of click and collect in the U.S. and tips for maximizing the purchasing channel.

FierceRetail (FR): What other countries have embraced click and collect ahead of the U.S. market?

Danny Silverman (DS): Top countries ahead of the U.S. in grocery click and collect are France and the U.K.

France has 3,863 click and collect pickup locations. While the U.K., which also has a well-established click and collect infrastructure, has helped drive 7.3% grocery sales through e-commerce.

FR: Why has it been more widely accepted in these countries before the U.S.?

DS: Geographically, European countries tend to be smaller areas with more population density in urban areas, versus the US. For example, one-day shipping in the U.K. and France have been commonplace for years whereas in the U.S. it's still a relatively new concept. The logistics efficiencies exist to support the model. With a larger geography and more spread-out population in the U.S., the parcel delivery model took hold first while retailers continue to try to find profitable paths to click and collect.

But none of that matters without shopper adoption.

Two things drive adoption of click and collect:

  1. Infrastructure (both physical and digital)
  2. Shopper awareness

Of the two, infrastructure is the first mover. Without infrastructure, click and collet cannot exist.

France leads the world in both click and collect locations and adoption, as 95% of all grocery e-commerce is via click and collect.

The U.K. does not have as much infrastructure, on a per capita basis, but strong shopper awareness has helped supercharge adoption.

FR: Is it the shoppers or the retailers that are resisting this change?

DS: In the U.S., retailers have been behind, and early stumbles—such as retailers providing the wrong items, or items being represented as in-stock when they're in fact out—have hurt adoption.

However, shoppers have rewarded retailers who have built out infrastructures and performed well, such as Kroger. Kroger's Clicklist click and collect service has been especially popular with young mothers.

FR: What are the challenges to click and collect that you think many retailers are not aware of when implementing a program?

DS: Accurately representing in-stock inventory can be difficult with click and collect—especially if the employees physically picking the items for a click and collect order are pulling from the shelves of the actual store.

In France, in order to solve the problem of accurate online inventory, some retailers have a completely separate inventory system dedicated to click and collect. The U.K. appears to have largely solved this problem as well, as only 15% of shoppers reported experiencing inventory problems.

Otherwise, often shoppers are reluctant because they prefer to select fresh foods personally. An April 2017 study of U.S. shoppers found that the top reason keeping shoppers from buying groceries online is that they want to see and touch the times in order to judge quality.

FR: What tips do you have to offer any retailer that wants to jump into click and collect?

DS: 1. Use a separate system for supplying and tracking inventory for click and collect—do not simply pick goods from the public store shelves. 

2. Develop dedicated real estate to grocery pickup at stores—either in-store pickup or drive-up.

3. Invest in people. Yes, you need physical infrastructure, and you need online interfaces, but at the end of the day, people are going to picking and packing these orders. To make click and collect work, you need dedicated staff who care that orders are fulfilled correctly, make intelligent decisions when preferred items are out of stock, and pick the best fresh food for orders.

FR: How important will click and collect be this holiday season?

DS: E-commerce accounted for 10.6% of all retail sales during the 2016 holiday season. And 95% of those 2016 holiday click and collect shoppers said they'd use the service again in 2017.

FR: Will more retailers be promoting it and will more consumers be embracing it than last year?

DS: You can expect Walmart to promote click and heavily over the 2017 holiday shopping season. Click and collect is one area where Walmart enjoys a considerable advantage over Amazon, since 90% of people in the US live within 15 minutes of a physical Walmart location. Given that Walmart has invested heavily to double their collection point infrastructure, Walmart is likely to attempt to leverage the holiday season to promote awareness of their vast click and collect capabilities.