Insight / Blog

Boost your ecommerce profitability with the Click & Collect multiplier

Posted on 13th September 2019

eCommerce is a tough business. Margins are constantly under threat from a laundry list of necessities – promotional discounting, delivery costs, returns, acquisition costs, et cetera. These pressures make it essential for retailers to maximise their profit margin wherever possible. An effective Click & Collect offering acts as a multiplier to existing ecommerce revenue, amplifying the value of ecommerce purchases.

Click & Collect directly improves margin in two ways. One; by consolidating shipping from DC to store, bringing many parcels to one location, delivery costs are significantly reduced compared to individual parcel drops to a long list of addresses. Two; when customers come to stores to collect their parcels, they’re likely to purchase additional items.

Consider how much effort and money is spent to convince shoppers to come back onto the ecommerce site and look around at the products again. Click & Collect brings the shopper back to you as part of the purchase experience.

In our case studies with major UK retailers we’ve seen an average uplift of 25% in the value of ecommerce orders through click & collect, thanks to additional in-store purchases made at the time of collection. Adding 25% of value to an ecommerce order and then saving cost on the delivery should be an appealing offer to any omnichannel retailer. It’s an amazing positive multiplier effect, just by changing the delivery method.

Exposing Click & Collect to more customers

Making the most of this opportunity is key – of course, many omnichannel retailers already offer some degree of click & collect capability. The challenge is to improve the quality of that service and to nudge more customers towards using it.

The latter is partly a result of the former, in that the better the service is the more it will be used, but it could also be helped by retailers actively highlighting the option to customers. Our research earlier this year showed that a quarter of customers are frustrated that home delivery is still positioned as the default option in checkouts. That’s just the ones who are aware enough and keen enough to miss having Click & Collect as an option – many more will be less conscious of the option in the first place.

To fix this, retailers should employ their talents in directing consumers through a purchase journey and apply them to the checkout and delivery options. Rewarding customers who choose Click & Collect will pay off if the retailer starts to see the uplift in sales in stores as a result.

Stepping up the collection experience

Improving the Click & Collect service both increases adoption and can encourage the multiplier effect. Great Click & Collect services offer consistent branded communication to customers throughout their purchase journey, from order confirmation to tracking updates and an email containing a collection code.

The experience for the staff in stores is just as important – they need an intuitive app and clear processes set out, especially for aspects like the storage of Click & Collect items. Technology is an essential differentiator when it comes to standing out with a customer-first Click & Collect service, and that is the standard which will earn a retailer the multiplier bonus from instore collection of ecommerce orders.

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