Is Covid-19 a good time for retailers to partner up for click-and-collect?

According to GlobalData, the UK's click-and-collect market is forecast to reach £9.6bn in 2022. With Covid-19 driving customers to online shopping, it's no surprise that more retailers are collaborating with each other to offer this service, among others. But is the timing right?

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click and collect online shopping covid-19 john lewis co-op sainsbury's dobbies
As of 2020, at least 80% of retail store locations offer click-and-collect.

With retailers witnessing a tough trading climate in recent years, it’s no surprise they are seemingly scrambling ways to boost footfall in their stores. Click-and-collect just happens to be one tactic employed by retailers to achieve this.

While many high street names already offer click-and-collect, some are now entering partnerships with fellow retailers to offer customers a simpler way of shopping.

As of 2020, at least 80 per cent of retail shops offered click-and-collect, increasing by 32 per cent since 2019, according to data from Statista earlier this year. Meanwhile, GlobalData states that the click-and-collect market in the UK is forecast to reach £9.6 billion in 2022, accounting for 13.9 per cent of online sales.

Click-and-collect is an attractive investment for retailers because deliveries are less costly and complicated if they’re going to one shop, rather than multiple homes. It also gives customers a choice by allowing them to make a purchase online and choose to collect that purchase at a pre-chosen location, saving them on delivery fees.

Last year saw Amazon partner with Next to launch a new service that allows customers to collect parcels from pick-up points from the latter’s high street stores, while John Lewis Partnership struck a deal with fashion retailer Boden to allow customers to collect online orders from selected Waitrose stores.

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Amazon entered a click-and-collect partnership with Next in 2019.

Prior to the Covid-19 pandemic, retailers were already struggling with trading, with 2019 being described as the “worst year on record for UK retail” as lacklustre sales over the peak Christmas trading period failed to give the sector the boost it needed.

At the start of the year, the BRC-KPMG Retail Sales Monitor revealed that overall retail sales in the UK decreased by 0.1 per cent for the whole of 2019, compared with the 1.2 per cent growth in 2018.

Now, with Covid-19 causing accelerating what was already an increasing shift to online shopping, some retailers have used this opportunity to enter partnerships and to enhance customer experience.

One of the most significant click-and-collect partnerships on the UK’s high street at the moment is department store chain John Lewis’ tie-up with grocery chain Co-op. John Lewis recently announced plans to extend the partnership to over 500 of its stores by the end of summer. The partnership was first announced in May last year, providing John Lewis customers with a new delivery option by allowing them to pick up online orders from Co-op stores.

Meanwhile, while not a click-and-collect tie-up specifically, Dobbies recently entered an exclusive partnership with Sainsbury’s to bring a range of food and grocery products to the former’s garden centres. The partnership gives customers the opportunity to buy over 3000 food products, ranging from ambient, chilled, fresh and frozen produce. The collaboration will also see Sainsbury’s supply Dobbies stores with some other grocery, household and toiletry products.

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John Lewis is extending its click-and-collect partnership with Co-op to over 500 stores.

Nottingham Business School retail research associate Nelson Blackley said the click-and-collect offering has “eliminated” the many problems that usually come with online shopping.

“The need to be at home and wait for the delivery of online orders proved to be inconvenient and frustrating for many busy workers,” he told Retail Gazette.

“The ability to collect online purchases from a local high street or city centre store, on their way to or from work, immediately eliminated many of these problems.”

Blackley added that the current health crisis has produced unexpected collaboration between retailers, in particular across the grocery sector.

As the government relaxed elements of competition law in mid-March as part of a package of measures to allow supermarkets to work together to “feed the nation”, retailers were able to share data with each other on stock levels, cooperate to keep shops open, or share distribution depots and delivery vans to help meet demand.

Catherine Erdly, founder of Future Retail Consulting, said the coronavirus pandemic has pushed retailers to come up with creative solutions and “expanding click-and-collect reach is no different”.

“This seems like a great opportunity for retailers to collaborate with one another, which has the advantage of them being able to access other retailers’ audiences, expand their own reach, and gain new customers,” she said.

“Covid-19 offers a great opportunity for retailers to collaborate with one another”

“Any business that isn’t offering click and collect is not keeping pace with the customers’ changing buying habits and is missing an important way in which they can encourage cross channel purchasing and growing their average purchased value.”

The partnership between Dobbies and Sainsbury’s came as a result of Dobbies’ “shared goal with Sainsbury’s” of seeking to “offer the best to customers”, as Dobbies chief executive Graeme Jenkins said earlier this month.

Ciaran Bollard, chief executive at ecommerce service Kooomo, said the Dobbies and Sainsbury’s partnership allows both retailers to “showcase their value and convenience for customers”.

“This increased value will build trust with the consumer and, ultimately, generate greater sales,” he said.

“By partnering with other brands to offer click and collect services, retailers can also leverage omnichannel growth potential.

“Merchants should follow suit of brands like John Lewis and Dobbies.”

However, Nikki Baird, vice president of retail innovation at retail tech provider Aptos, argued that for retailers to consider entering partnerships, it should depend on whether they are based in shopping centres or in a highly concentrated location.

“It might be worth it to band together. Doing so increases the convenience of the customer and provides the opportunity to share some of the costs, thus hopefully making it more affordable/profitable for the retailer,” she explained.

“For retailers that are stand-alone, or in an area that is more spread out, it’s probably not worth it.

“The examples you have of crossing over to different retail verticals can potentially work, but it really depends on the pickup location to make sure that they’re delivering a good customer experience for that pickup.

“Grocery stores are where the foot traffic is right now, so the focus on making it easy for customers to add in another company’s products to be picked up at a location where they’re going already is a good idea – as long as the fulfilment process is smooth and easy.”

Arguably, convenience plays a large factor here. The ability to offer consumers a way to access the product they have purchased online, at a short distance from their home in many cases, can prove fundamental.

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Dobbies’ tie-up with Sainsbury’s will bring a range of grocery products to the former’s garden centres

Tim Carter, operations director at shopper marketing specialist SMP, said getting to large out-of-town stores has been “too great a risk” to run during the pandemic and subsequently these local retail hubs have proved invaluable.

“It can work both ways for retailers, too, with Sainsbury’s now seeding its products in Dobbies,” he said.

“This isn’t necessarily something new, with the likes of Cook selling their food ranges in garden centres for some time.

“But what it does allow for Sainsbury’s is additional reach to those more risk-averse customers who feel happier entering a ‘safer’ semi-open environment.

“Acquiring grocery products from a trusted retailer at the same time they’re picking up their gladioli and fish food makes good sense.

“Click and collect partnerships ultimately enable physical retailers and ecommerce players to establish a symbiotic relationship – a mutual hosting of sorts.”

Undoubtedly, for retailers, click-and-collect is a way of expanding their accessibility to shoppers, especially if they do not already have substantial store portfolio across the nation. Therefore, partnering with another retailer that does have that extensive portfolio, such as convenience retailer Co-op, could prove beneficial in reaching more customers.

Either way, click-and-collect partnerships – and other forms of partnerships – are likely to increase. But for retailers looking to offer click-and-collect via another retailer, it may be crucial to assess the impact of driving footfall to a shop other than your own.

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