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While e-commerce has experienced amazing growth since the start of the Covid-19 pandemic in 2020, the industry still faces a great deal of challenges, especially related to getting products from retailers to customers.
Amid a variety of ongoing supply chain challenges associated with global events, the e-commerce industry continues to struggle with the high cost of “last-mile delivery” – the stage where a product is finally delivered to the customer. Parcel theft, environmental damage and other issues can also hinder the effectiveness of e-commerce deliveries.
To that end, many companies are beginning to implement so-called ‘click and collect’ technology – a valuable tool that aims to streamline and improve on these and other common challenges.
Should your company offer click and collect? This article is about what click-and-collect technology is and how e-commerce companies are using it to overcome the challenges of last-mile delivery.
What is click and collect?
Click and collect is considered a hybrid ecommerce model – and is actually already used by Amazon and other retailers. In this system, an individual buys a product online. Instead of waiting for the product to be delivered to their home, the shopper collects the item from the store (in-store or curbside pickup), or picks up the item at another designated collection point.
This is relatively easy to implement for retailers with physical locations. Even supermarkets offer curbside pickup, so customers can go to the nearest store, scan a code and have their items delivered by a store associate. This is of course only possible during the opening hours of the store.
Retailers without physical locations, on the other hand, use lockers or kiosks, such as Amazon Hub lockers. There is no employee present to run these locations. Instead, the retailer places items in a properly sized locker and sends a notification and code to the customer. The customer then uses that code to retrieve their item at any time.
The availability of non-proprietary lockers for various retailers or concierge services to use is also increasing, expanding the availability of these systems to more e-commerce merchants.
Related: Launch an ecommerce brand
How click and collect solves the top e-commerce challenges
Ecommerce businesses using click and collect systems can directly address three primary challenges that impact both their operating costs and customer satisfaction.
While less “visible” than other issues, last-mile delivery is a major challenge for e-commerce brands. In fact, a Business Insider Report Reveals that 53% of shipping costs are directly attributable to last-mile delivery, with traffic congestion, long distances between delivery locations and the cost of third-party delivery services hampering retailers’ ability to provide fast and cost-effective deliveries.
Click and collect essentially eliminates last-mile deliveries. Retailers can simply drop off a shipment at the pick-up hub and wait for the customer to pick it up. The items do not need to be on a van for local delivery, which can significantly reduce shipping costs. The customer can pick up the item at a time that suits him.
Theft and damage to packages are another source of financial loss for e-commerce retailers. The New York Post Reports that 64.1% of Americans were victims of package theft in 2021, with more than 210 million packages stolen. Porch pirates aren’t the only threat – it’s estimated one in 10 e-commerce packages appear damaged. Rain, extreme heat and other hazards can easily damage a package that is forgotten on a customer’s doorstep.
An example of how click and collect can solve these problems is Mileberry, a modular smart locker system designed for both senders and recipients. Like David Thompson writes for Tech Times: “The only way someone can open a cell at a Mileberry Hub is with a pick-up code or QR code, which means thieves have no way of stealing the packages and taking them for themselves. This gives peace of mind the end consumer, as they can rest assured that their package is safe.”
Returns are another challenge for e-commerce retailers. The National Retail Federation reported: over $761 billion back in 2021. Retailers are typically responsible for covering shipping costs. Customers are often inconvenienced when their returns are tied to a specific logistics company (such as UPS or FedEx), especially if that company doesn’t have a location nearby.
Some click & collect systems are also designed with returns in mind. This allows customers to return an item to the same locker or store location where they made the original pick-up. This streamlines the process for the customer and also helps retailers avoid the shipping costs that would be incurred when using a third-party service.
Related: 7 tips to reduce your shipping costs
A more efficient approach to e-commerce
Increased interest in online shopping won’t do retailers much good if they can’t control costs and deliver hassle-free shipments to their customers.
By providing a system that can be used by retailers, couriers and individual customers, click-and-collect systems are poised to dramatically improve many of the key challenges that continue to hinder e-commerce – even if it is a historic, record-breaking has undergone growth.
Without relying on third-party last-mile logistics companies, retailers and brands will have to make significant capital investments to change their business models to enable last-mile fulfillment capabilities. Click-and-collect systems reduce last-mile shipping, package theft and other challenges, meaning e-commerce merchants can cut costs while improving the overall customer experience in the long run.