Online sales may not be growing as fast as some industry observers had expected, but the number of shoppers reserving or buying products online before picking up in store is outstripping forecasts.
The convenience of ordering online and then collecting the goods when you want – rather than waiting for the postman to call – is proving to be very popular. As a result, even online-only retailers are trying to find ways to establish some sort of presence on the high street.
This week Asos, the online fashion retailer, announced it was in talks with high street retailers including Alliance Boots about a tie-up that would let its customers pick up parcels at their shops.
“A lot of people forget that home delivery is not always that convenient if you’re not at home to receive a parcel or you have to miss work to wait at home,” said Tony Stockil, chief executive of Javelin, the e-commerce consultancy that works for most of the top-10 UK retailers.
He predicts that by 2020 there will be almost as many web-to-store transactions as store-only purchases, but online sales delivered directly to customers, which are about 7 per cent of all sales, will only reach 14 per cent.
When online retail first took off, people suggested a number of ways to avoid the problems of home delivery, from secure boxes outside every house to pick-up points at corner shops. But collecting shopping directly from the retailer has proved to be by far the most popular way of avoiding deliveries. This is one area where bricks and mortar retailers have an advantage over online retailers, who usually benefit from not having the heavy fixed costs of a retail estate.
Argos, owned by Home Retail Group, led the way by transferring its telephone ordering business to the internet in 2002 and now almost a quarter of its total sales are made through its click and collect service, compared with 10 per cent ordered online and delivered to customers’ homes.
Web-to-store cuts the cost of delivery as retailers can use their existing delivery networks and group parcels together.
It also increases in-store sales as once customers are through the doors, they tend to buy more. “There are definitely incremental sales otherwise we wouldn’t be putting the money in,” said Dave Hughes, director of Marks and Spencer Direct, which is still rolling out the service but so far has 13 per cent of online orders picked up in stores.
Mr Hughes said it was now expanding into Simply Food stores so shoppers could pick up their lunch at the same time as they collect their orders.
John Lewis, which has 20 per cent of its online orders collected in store, is also interested in using its food retailer, Waitrose, as a pick-up point. “We can look to send through Waitrose and explore any other alternatives,” said Simon Russell, head of multi channel at John Lewis.