UK retailers that fail to offer ‘click & collect’ delivery options are missing out onhundreds of millions of pounds worth of business this Christmas, as consumers increasingly turn to
alternative delivery options, according to new research.A study conducted by retail analysts Conlumino, in partnership with automated parcel terminalfirm InPost, indicated that UK Christmas gift spending was expected to reach almost £8.5bn thisyear, but shoppers were only planning to allocate 13.2% of this to small or medium-sizedretail chains and local independents. Price (39.4%) and product range (24.6%) were inevitably thekey drivers of spend, but factors relating to convenience, such as delivery and pick up options,also play a major role (21.2%) and can sometimes make the crucial difference.
The study estimated that ‘click & collect’ deliveries to a store or locations such asautomated lockers would account for 7.8% of gift spend (over £700m), with almost a third(29.5%) of consumers intending to use click and collect services this Christmas.However, with less than a fifth of SMEs (18%) offering such a service, comparedto 60% of large retailers, SMEs could lose out on an estimated £200m in potential sales during thiscritical time of year for the retail sector, the study estimated.
Statistics published this month by e-retail association IMRG in conjunction with Capgeminiindicated that click & collect was even more popular among certain sections of the market. TheIMRG Capgemini Quarterly Benchmarking Report identified “the growing influence of click &collect services for high street and multichannel retailers”. Click & collect accounted for 18%of online sales by high street and multichannel retailers in the third quarter of this year, risingfrom 16% in the second quarter, the report estimated.
Meanwhile, the research by Conlumino and InPost claimed that 50% of UK shoppers were set to “switch” to larger retailers for gifts as Christmas approached, a trend that it claimed was “particularly pronounced amongst 25-34 year olds (68.5%)”, although InPost was unable to defineprecisely what they were “switching” from. Nevertheless, it said over half (51.3%) of SMEsacknowledges this was a key reason why shoppers will “switch”, even though 42% of consumers whoconfessed to favouring larger retailers “could be swayed by smaller chains that offer onlineordering and convenient delivery options”.
Half of those aged 18-44 said they would be more likely to shop at smaller chains if theyoffered online shopping and delivery to home and 47% would use them if they offered click andcollect services.
Among those consumers favouring larger retailers at Christmas, almost a fifth cited the lack ofconvenient delivery options at smaller retailers as a reason for switching atChristmas. Conlumino said that as more and more spend shifts online this Christmas, “thebattle lines have been drawn and smaller retailers should begin to prioritise developing theironline presence if they are to fight back successfully”.
Neil Saunders, Managing Director of Conlumino, said: “We, therefore, encourage smallerretailers to consider partnering with logistics providers, investing in online and improving theirdelivery and collection options so that they stand a better chance of competing. Convenience countsfor a lot, particularly amongst the younger generation.”
He said that with 42.9% of SMEs believing the costs of setting up online ordering and deliveryto be prohibitive and 25.7% lacking the necessary expertise, having a third-party logisticsprovider on board could make the process much more straightforward, reducing the costs barrier andvirtually eliminating the need for internal know-how.
Jonathan Smith, Chairman of InPost UK, commented: “Overall, two-thirds (64%) of retailers agreeonline shoppers are demanding more convenient fulfilment options and it’s having an impact on howthey’ll spend this season. Therefore improving fulfilment capabilities is one way for smallerretailers to fight back this Christmas.
“SMEs should consider solutions such as automated locker networks that don’t require lots ofinvestment and which would not only help them extend their reach by providing 24/7 collectionlocations across the country, but which also provide easy drop off points allowing them to quicklyand easily send multiple items at once without the queues.”
InPost now has a network of more than 1,000 fully automated lockers across the UK at locationsincluding at Morrisons supermarkets, petrol stations, train stations and Transport for Londonsites, and outside retailers such as Toys R Us and at local shops across the UK.
According to the latest results from the IMRG Capgemini Quarterly Benchmarking Report, anestimated £25.1bn was spent online in the UK in the three months from August to October, with£9.3bn spent via smartphones and tablet devices. The report estimates that over 37% of UK onlinesales are now made via a smartphone or tablet device, with the figure increasing to 43% forclothing merchants.
With mobile (including tablets) accounting for less than 1% of e-retail sales in 2010, thesector has seen a staggering 4,000% growth in its penetration of online in just four years. Visitsto retail websites on smartphones and tablets now account for exactly half of all UK onlinetraffic, the study estimated.
