Retailers suffered a huge drop in sales as we turned away from traditional stores in favour of online outlets. With high streets up and down the country looking increasingly bare, there is no questioning that e-commerce has changed the way we shop. However, will a new trend in consumer purchasing behaviour unite the traditional bricks ‘n’ clicks retail model with a more modern e-commerce alternative?
A new approach to e-commerce
we have witnessed a boom in the number of click and collect operations. This innovative delivery method combines the best aspects of online shopping and retail stores. By allowing customers to make orders online and then pick up their products from retail outlets at their own convenience, retailers have been able to capitalize on consumer’s increased focus on convenience.
According to Retail-week, businesses are completely rethinking their existing business models in order to provide an effective e-commerce service. ASDA, for example, have recently invested heavily in specially designed temperature controlled pods which they hope enable customers to pick up their all their grocery purchases whenever they want. Given that the retailer has already enjoyed a 20% increase in demand for their online grocery division as a result of such developments, there is no denying the potential of this new approach to e-commerce.
This is re-enforced by the fact that even well-established online retailers realize the advantage of having a physical location customers can pick their purchases up from. For instance, while Amazon has traditionally offered customers a range of postal delivery options, the online giant is now trialing a number click and collect pick up points which are expected to be strategically located in tube stations, shopping centres and in Co-operative stores around the country. Given that click and collect points in London’s tube station are already taking over 10,000 orders a month, the rise of these new e-commerce services marks a huge shift in the way retailers do business.
Holistic demand planning
With the rise of such e-commerce services however, retailers have placed huge amount of pressure on their internal supply chain operations. Whereas before click ‘n’ collect, retail stores had to manage just two major distribution channels: physical stores and distribution centres which supported the online operations, the emergence of pick up points has blurred the line between the two.
Instead of developing a separate plan to meet demand from online and store customers, retailers now need to take a more holistic approach to demand planning. After all, when you consider that a customer could potentially have a product delivered directly to their door, sent to a dedicated pick up point or simply straight from the shelf in a retail outlet, supply chain managers undoubtedly have a lot more to think about.
With many of the biggest names in retail investing into click and collect services, it will be interesting to see what impact this has on the industry. Considering the recent interest in this new approach to e-commerce, what potential challenges do you envisage for retailers?