One of the trends to have most interested supply chain consultants in recent years is the rise of ‘click and collect’, which according to Verdict Retail, shows no sign of abating anytime soon. Indeed, the retail information firm’s latest report on the phenomenon suggests that ‘click and collect’ expenditure in the UK is set to go up by almost two-thirds (64%) between now and 2021. The report, entitled Click & Collect in the UK 2016, compares this figure to an online growth of 38% over the same period. It also suggests that while ‘click and collect’ will grow in every category, its expansion will be mainly driven by clothing and footwear – the category that already accounts for 54% of the UK’s entire ‘click and collect’ spend.
Retailers start to consider subscription models
‘Click and collect’ seems to be helping to bolster in-store expenditure for retailers, with nearly two-fifths – 39% – of customers that collect an online order from a store making an additional purchase. The equivalent figure in 2013 was just 29%. However, customers don’t spend as much on additional purchases now as they did in 2013, with that figure having now dropped to an average of £13. Even on a backdrop of such strong predicted growth, Verdict believes that retailers may focus more on other delivery models in their efforts to improve their fulfilment offers. Following Amazon’s launch of a home delivery subscription service in 2005, other retailers have followed suit, including ASOS in 2009 and Boohoo last year, a trend that Verdict thinks will continue.
An increasingly competitive marketplace
Another retailer to have recently made a delivery subscription service available is fashion brand New Look, which offers The Delivery Pass at £9.99 a year. Its service offers unlimited delivery and collection on all options including precise next day and evening deliveries in addition to free returns. The ability that such services give the customer to save money on delivery charges looks likely to help boost their loyalty and encourage them to spend more money with the given retailer. Other fulfilment offers are also predicted to see rapid growth, including PUDO – Pick Up Drop Off, which includes lockers and collection from local stores and is expected to expand by some 117% by 2021. As seasoned supply chain consultants, here at Bis Henderson Consulting, we will certainly be interested to see how many retailers embrace subscription models as the competitive landscape tightens. This will be especially so if increasing inflation in the UK – now at 1.6%, the highest rate since July 2014 – starts to impact on consumer spending.