Published tuesday 10th December 2019
It is one of the most frequently-told stories concerning British business over the last decade: the high street, as it once was, cannot survive in this ultra-competitive environment. Many of the UK’s biggest retailers have seen huge losses and closures, often through an inability to adapt to changing times.
There have been many reasons given for the apparent demise of traditional retail in the UK, with online giants often cited. However, solutions to the problem have been in comparatively short supply. Much has already been made about the potential of experience retail. However, perhaps there is more to be said about bringing online shopping into the traditional landscape, through a medium that has existed for years. Could ‘click and collect’ provide a solution to the decline of bricks and mortar shopping?
Modern Consumer Behaviour Transforming Retail
Despite a promising Black Friday, latest figures indicate that retail stores suffered more year-on-year declines across November. According to data company Springboard, overall retail footfall in the UK last month was down by 3.4% compared to a year ago, a result impacted slightly by the bad weather. When looking at just the high street, that footfall figure worsens to a 4.3% decline.
This trend has been seen for much of the last twelve months, as online shopping continues to eat into the revenues of traditional retailers. According to the Office for National Statistics, in October 2019, online shopping accounted for 19.2% of all retail sales, up 1% on the year before. Much was made when, last Christmas, e-commerce accounted for 20% of all retail sales in the UK. However, with current growth patterns, this will soon be passed year-round. Economic uncertainties caused by Brexit and consecutive general elections are also cited as having an effect, but the leading cause is often seen to be online shopping.
E-commerce has seen so much success over the last few years, led by industry leaders such as Amazon and eBay. Reduced overheads relating to premises and staff have played a role in creating price competitiveness for these companies. More importantly, though, they have managed to take advantage of substantial shifts in consumer behaviour. Online shopping offers a convenience that no traditional retailer has sufficiently competed against, both in terms of choice in store and ease of delivery. While some companies point to the cost of physical stores as a cause for their decline, the bottom line is often that the online world offers a more appealing option to the modern consumer.
Creating a Competitive Advantage in Physical Stores
So, how do traditional retailers compete against Amazon and e-commerce’s many advantages? Many have argued that it is impossible to compete, especially on the points of price and convenience, and therefore differentiation is vital. However, the convenience gap must be closed somewhat as it becomes increasingly important to modern consumers.
This convenience is where click and collect could play an increasingly important role for traditional retailers. One of the few criticisms of online shopping is that deliveries can be unreliable, costly and result in consumers having to stay indoors and wait for parcels to arrive. Click and collect allows customers to pick up their products when they like, from a location most beneficial for them and often for no extra charge. According to Barclaycard, 68% of shoppers now choose this option when it is convenient for them, while 60% have urged retailers to partner to create more pick-up locations. With 85% of such customers known to buy additional items when collecting click and collect goods, this presents an undeniable opportunity for traditional retail growth at a time when such chances are hard to come by.
An Effective Supply Chain for Modern Retail
Barclaycard state that, by 2023, the UK click and collect market would have grown by 45%. They also note that nine in 10 retailers plan to invest in the technology over the next five years. However, creating an efficient click and collect system which can sufficiently challenge e-commerce deliveries will require substantial overhauling of existing supply chain practices.
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