Why 'click and collect' is getting popular

December 13, 2016 15:03
According to a study, nearly 33% of American shoppers bought items online and picked them up at a store during the 2015 holiday shopping season. Photo: Savills

Hong Kong's retail landscape is in the midst of considerable reinvention.

As luxury brands rein in their expansion and sales of high-end goods slow, landlords and retailers have had to adapt — quickly — to new purchasing patterns. Among those new patterns are e-commerce and mobile shopping (m-commerce).

Mall operators have responded to shifting consumer demands by offering more food and beverage options in shopping centers and making a visit to the local mall more experiential — and convenient.

One of the fastest growing retail trends is click and collect services, or buy online, pick up in store (BOPUS). According to the New York-based International Council of Shopping Centers (ICSC), nearly 33 percent of American shoppers bought items online and picked them up at a store during the 2015 holiday shopping season.

Why click and collect makes sense

Click and collect makes sense for retailers feeling the heat from e-commerce. ICSC data indicated that 69 percent of shoppers made additional impulse purchases at the time of pick-up, and 36 percent shopped at other nearby stores.

It's good business for mall operators and leads to increased foot traffic, and the convenience of the service keeps customers coming back. For customers, it makes for a smooth shopping experience without the wait involved in e-retailing.

In Hong Kong, some early adopters of click and collect retailing started experimenting in 2014, and now include Burberry, Watsons, Watson’s Wine and Wellcome supermarkets. American casual clothing retailer J.Crew (which entered the Hong Kong market two years ago) allows for refunds and exchanges at its stores, and furniture supplier Indigo Living lets customers pick up accessories and small items in days or hours.

Spanish retailer Zara is another brand offering a click and collect option.

"I like the online-offline just because I can avoid potentially long queues. Any salesperson can retrieve an order," says one regular Zara shopper who wished to be identified as Clement.

In addition, "If something is on sale online but not in the store, and it does happen, I can buy it at the lower price and just pick it up. I also like having a chance to actually feel clothes before I buy them, or make sure the size is right. They can vary."

And it's not just clothing, pharmacy and food vendors that are getting in on the trend. Swedish mega-retailer IKEA offers collection services at its dedicated Island East Merchandise Pick-up Point in Shau Kei Wan.

Items are ready for next-day pick-up after ordering in-store —quicker than online purchase and home delivery.

Indigo launched its click and collect service in early 2016 as part of it revamped website, but the option was on management radar for some time. As an international retailer, we also offer it in Hong Kong because we offered it in Shanghai and Dubai," explains John McLennan, Indigo's managing director.

"We were finding that people who did buy online were also asking to come in to the store and pick up their items, sometimes because of a delivery fee or timing," said McLennan.

In line with the ICSC data, it was also an opportunity to upsell in some circumstances. This holiday season, Indigo will have its first opportunity to gauge how much impulse purchasing its clientele does.

Challenges faced by click and collect

Efficient click and collect service isn't without its challenges. Front and back offices need to coordinate carefully, and the supply chain must be flawless. Little is more frustrating for shoppers than getting two different messages from a store: an online version that states a given item is in stock, and a bricks-and-mortar shop that says otherwise.

Indigo is careful with what can and can't be done in an effort to ensure items are indeed available as promised. Click and collect is offered at specific stores on specific timelines.

"We only offer it on certain items. You go to website and there are only certain things that you can click 'collect at store' with. It can be lamps, small accent pieces, gifting products and accessories, bed and bath, that sort of thing," says McLennan.

More and more retailers are opting into click and collect services largely due to consumer demand. As a market, Hong Kong aligns itself quickly with online and mobile trends, and retailers compelled to respond to those demands and trends are adopting click and collect services as a way to remain vital in a transforming retail landscape.

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Managing Director and Head of Leasing for Savills Hong Kong