How to Cut Click & Collect Costs

Click & Collect has many business benefits when implemented correctly.  But if it isn’t correctly set up, it can become a costly drain on space and staff time. In this article, I share how you can streamline your Click & Collect operation to cut costs. 

By 2030, click-and-collect retail sales will reach $335.9 billion. What’s more, the 5-year CAGR for Click & Collect sales as a percentage of eCommerce revenue is 9.41%; the projected CAGR for 2025 to 2030 is 12.0%. So it’s clear that an increasing number of shoppers are using Click & Collect as an easier, more flexible way to collect goods ordered online.

However, the rise in popularity of Click & Collect has put additional pressure on stores to process the collections and has exposed areas of inefficiencies:

• Process inefficiencies
• Long waiting times
• Reduced customer experience
• Storage space requirements
• Taking staff away from the shop floor

To address these inefficiencies, organisations must first understand their customers’ needs.

What do customers really want

• Flexibility–to collect when it’s convenient for them
• Good customer experience–no queues or waiting times
• Good customer service–having staff members to help
• Self-serve options–to be able to carry out simple tasks by themselves

Some Click & Collect processes fail to deliver value for money for the business and customer experience. As a result, inefficiencies are costing retailers significant amounts of money.

Manual processes divert staff from their normal day-to-day activities. Staff must leave their shop floors to find parcels in the storage facility or the warehouse. This leaves shoppers waiting and queueing for unacceptable lengths of time at the tills, negatively impacting customer experience.

How much do these inefficiencies cost retailers?

If you break down the figures, it’s clear that retailers can make significant savings by eliminating manual collection processes.

As part of a feasibility study with a large retailer, we discovered:

• Current time taken to manage a Click & Collect order = 5 minutes
• Typical average salary (incl. NI & pension) = £10 per hour

If you base these figures on an average of 30 orders per store per day, the current manual processing time is 150 minutes (2.5 hours) at a cost of £25 per day.

Enabling online shoppers to collect in-store using self-service collection points, or smart lockers, is a great way for retailers to realise significant savings and improve the customer experience.

Introducing in-store smart lockers brings additional benefits, including:

• Automation of business processes
• Improved efficiencies
• Reduction in errors
• Real-time view of usage and collection patterns
• Higher customer satisfaction

Let’s take the figures above and compare this to a self-service collection service, where it takes approximately 10 seconds to load an order into a smart locker.

Based on 30 orders per store per day:

• Process time = 5 minutes
• Smart Locker process cost = £0.83

Saving per store, per day = £24.17

Now, let’s assume the retailer has 400 stores nationwide.

That’s a daily saving of £9,668 across all stores. If you trade for 364 days per year, that’s a staggering annual saving of £3,519,152.

What else can retailers gain from introducing smart lockers?

In addition to the clear financial benefits, retailers will also see a significant improvement in their day-to-day processes:

• All orders are loaded prior to the store opening, meaning staff hours are better utilised.

• Staff are able to focus on other revenue-generating activities,  merchandising, and customer service.

• Click & Collect customers are diverted from queuing at the till point. This allows for faster customer service and reduced queues.

• Smart lockers are suitable for indoor and outdoor use, giving 24/7 availability.

Implementing self-serve requires expertise

We’ve seen first-hand the challenges retailers can face when implementing a self-serve collection system. In some cases, retailers have had to stop the entire project because of the complexities involved.

If you’re looking for ways to improve the customer experience and blend the online and offline shopping experience, introducing smart lockers will bring significant benefits. Finding a partner who can help navigate the complexities and ensure the infrastructure is in place to operate the system effectively is key.

Interested in learning more about smart lockers? Read our guide to discover if RICOH Smart Lockers are right for you.