This year’s holiday season left consumers in a crunch with six less shopping days between Thanksgiving and Christmas. With added pressure to meet record Sales goals and deliver on increasing customer demand, retailers are increasingly turning to click-and-collect, or BOPIS (buy online pick-up in-store), to provide a more convenient shopping experience.
With brick-and-mortar retail Sales slumping in recent years and thousands of stores closing in 2019 alone, many trends have indicated that shopping online and picking up in-store (click-and-collect) will be the industry’s saving grace. But according to recent data, this trend may not actually help drive long-term Sales like retailers anticipated.
In recent years, retailers have faced an overall lower average order value (AOV) as shoppers stopped shopping in stores as much and flocked online. Motivated by deals like free home shipping and the convenience of shopping whenever and wherever they want, consumers are less likely to spend hefty sums on large orders, and will gravitate towards quick, ad-hoc purchases that can be delivered right to their doorstep. What’s more, while consumers might be doing more shopping on mobile while on-the-go, data found that the AOV dropped 11 percent, compared to shopping on desktop, indicating that they are spending less time browsing around.
When looking at click-and-collect, order values were found to drop by nearly 40 percent when compared to an online order that was placed on a desktop and delivered to the consumer’s home. This drastic drop could be caused by various factors, such as stores having less inventory available for click-and-collect, paired with the fact that shoppers often know exactly what they’re looking for and are less likely to stray from the necessity.
With this sharp decline in AOV, retailers have had to rely on expensive Marketing tactics like targeted ads, general price discounting and special promotional deals—all of which decrease Sales margins. While these discount tactics might work to boost sales and reel in customers in the short-term, they likely are only attracting deal-hunting buyers who won’t become the loyal return customers that brands are looking to capture and maintain.
Many retailers are also beginning to offer customers a real-time look at inventory with options to reserve online and immediately pick up in-store. This allows customers to confirm an item is in stock before they head to the store and enables retailers to capture their most high-value customer face-to-face—the in-store shopper. This strategy is especially popular with last-minute shoppers during the holiday season as they can guarantee they’ll get the product they’re looking for and not have to worry about wasting time browsing around a store or paying for rushed shipping.
However, data comparing retailers’ AOV for click-and-collect in November 2018 and November 2019 shows a near 20 percent improvement year-over-year. This increase is promising news for retailers, indicating that shoppers are becoming more comfortable placing higher orders via click-and-collect. Retailers are also getting much smarter in how they offer more personalized products for shoppers to add to their order, encouraging shoppers to purchase more items before checking out and contributing to an increase in AOV.
While the data shows that AOV for click-and-collect is lower than ship-to-home, we have still seen strong year-over-year growth, indicating that we can expect even more growth in the new year. The question remains on how they can build the offering to a level that better fosters loyalty. The keenest of retailers will take a deeper look at these changes in buying behavior to inform additional tactics that will result in customer loyalty such as rewards programs and order recommendations that will help increase order value. If click-and-collect is done right and retailers are able to connect with high-value customers directly, the strategy can be used to bolster business growth. As retailers analyze their Sales from the 2019 holiday season and plan for the year ahead, they should focus on the methods that actually improve their business’ health and longevity, and go full speed ahead on these tactics in this new decade.