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 Click and Collect Strategies: How Target +273% Sales same day fulfillment
In Q2 2020, Target increased pick-up sales by 60% and Drive Up sales by an incredible 700%+. It is compelling proof that click and collect is becoming a mandatory fulfillment model for retail and grocery eCommerce.
This guide will break down how top retailers are using Click and Click (or buy online, pickup in store strategies). We will go over statistics, as well as click and collect benefits as part of a wider omnichannel retailing strategy. Finally, we will share challenges and best practices for a successful Click and Collect service.
If you'd like to skip straight to click and collect examples here.
What is the Click and Collect Model?
Click and Collect is an omni-channel retail strategy where shoppers buy online and pick up in store.
Currently, the model is more prevalent in Europe - especially France and the UK. However, as US retailers continue to become more customer centric, they are adopting click and collect functionality.
Companies are implementing this model in three main ways:
Lastly, Click and Collect goes by a few other names.
BOPUS: Buy Online, Pick Up in Store
BOPIS: Buy Online, Pickup In Store
We'll use these terms interchangeably.
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Creating a Buy Online, Pickup In Store Strategy
We've collected a series of buy online, pickup in store best practices.
As you build out your omnichannel strategy, remember that the fundamental promise is convenience. Your Click and Collect tactics should make life as easy as possible for customers.
1. Nail Communication with Triggered Emails
Transactional emails are a staple in eCommerce. For BOPIS strategies, transactional emails should be used to communicate clearly to the customer what the next steps are.
Consider the following types of triggered emails:
2. Prioritize Convenience Above All
The fundamental reason for click and collect is a better customer experience.
Unfortunately, this promise is extremely difficult to keep in the final fulfillment phase.
Overcoming limited retail space (that is more often than not already utilized), and incorporating the logistics of a successful buy online pickup in store strategy is complicated. The temptation is to follow tried and true retail strategies of having customers walk by as many products as possible, and locate pickup towards the storage room where orders can be kept alongside existing inventory.
However, this experience would negate all the promised advantages of convenience.
Instead, locate pickup up front. The goal is to maximize customer value through convenience, giving your store a strategic advantage against others.
To do this, your BOPIS strategy should center around convenience.
“The fundamental reason for click and collect is a better customer experience.”
3. Maximize Cross-Sales
Cross sales are a major click and collect benefit.
With a successful buy online, pickup offline strategy, you will get internet shoppers coming into your store. Multiple surveys show that 50% of customers who use click and collect end up making additional purchases while they are picking up their items.
To capitalize on this, you should leverage data collected online to create personalized recommendations in store. This can be accomplished by simply printing recommendations, or piping customer insights to store personnel to increase revenue.
2015 - 2021 Click and Collect Statistics
Below we have collected a number of Click and Collect statistics. I prioritized recent studies, with the newest studies coming from 2018.
Click and Collect Market Growth
Current Market Share
72% of UK shoppers currently use Click and Collect - Cybertill & Forbes, March 2016
21% of shoppers use Click and Collect for half (or more) of their purchases - Cybertill & Forbes, March 2016
Toilet paper, Vitamins, and Laundry are the most popular items for click and collect. - Nielson, December 2017
68% of shoppers use Click and Collect Services - Forbes, 2019
Local delivery orders jumped 600% in 2020. - Shopify, 2020
US Adoption and Market Growth
49% of U.S. Consumers used Click and Collect for the first time in 2016. - CNBC, January 2016
71% of US shoppers have used Click and Collect in the past 12 months - CNBC, January 2016
Click & Collect Continues to Grow
By 2025, 10% of all sales will be fulfilled by Click and Collect. In-store purchases will decline to 60%. - Post and Parcel
Larger metro areas have the highest demand for Click and Collect - FMI , Nielson, February 2018
Click and Collect is Growing in Grocery
In general, the US online market lags in grocery market share. Currently, online CPG sales account for only 1.5% of total sales.
However, Click and Collect has already emerged as the major fulfillment model for perishable goods.
In France, Click and Collect (known as Click and Drive) already accounts for 5% of the countries grocery sales, and is expected to reach 10%.
As convenience becomes more important in the competitive landscape, Click and Collect is becoming the top focus of top grocers.
Kroger recently celebrated it’s 1,000th click and collect grocery shopping service - Progressive Grocer, December 2017
We plan to expand our seamless service to more markets, ultimately making this convenient shopping experience available to every one of the 60 million families who shop with us. - Yael Cosset, Chief Digital Officer Kroger
Kroger's program is known as ClickList.
In fact, every major grocery player in the US, from Wal-Mart to Safeway are investing in click and collect infrastructure.
Click and Collect Grocery Statistics
US online grocery spending will reach $100B by 2023 - FMI, Nielson, February 2018
Millennials prefer to use click and collect/curbside pickup more than delivery for groceries, FMI, Nielson, February 2018
Percentage of grocers offering click and collect programs grew 53.3%, from 15% to 23% in 2016, Food Drive, April 2017
Click and Collect is Growing in Retail
US retail giants are investing heavily in click and collect through a myriad of efforts.
Acquisition has been a major trend, highlighted by Target's recent target Shipt. While the acquisition gives Target the ability to fulfill same day delivery, it also gives it a greater capability to overcome inventory challenges associated with Click and Collect.
Retail Chains are Expanding Click and Collect Efforts
Target plans to expand Click and Collect service “Drive Up” to 1,000 stores by end of 2018 - Progressive Grocer, April 2018
WalMart to add another 1,000 stores to its curbside pickup program by the end of 2018. - CNBC, December, 2017
Click and Collect Retail Examples: Target
Target recently announced their Q2 2020 results. It was the best in history, largely driven by their online and click and collect investments.
How Target emphases Click and Collect throughout buyer journey
From the home page Target highlights their click and collection solutions: "Order Pickup" and "Drive Up".
Above, we see three different instances above the fold where Target communicates to customers.
First, even though my session is initiated on their site, they clearly connect my local Target to my shopping session. Target says "you're shopping" and then dynamically insert when my local in store location closes.
Second, they give center stage to the click and collect offers in the main value proposition centered in the hero image.
And third, they give click and collect a permanent place in their navigation bar.
Additionally, further down the home page they give a full width call out on both their drive up and same day delivery options.
Again, their click and collect options are pushed first.
How Click and Collect has benefited Target
Specifically, Target saw massive growth from their click and collect retail strategy.
In-store pickup increased more than 60%.
Drive Up grew more than 700%.
And overall same-day fulfillment grew a combined 273%.
Since implementing order pickup five years ago, click and collect has continued to be a huge success.
These trends have continued throughout 2020 and into 2021. Target's last holiday season reporting saw
“Comparable digital sales growth was driven primairly by the Companyu's same-day fulfillmentservices (Order Pick Up, Drive Up and Shipt), which together grew 193 percent. Of the services, Drive Up grew the fastest at more than 500%...” - Target Provides Updates on Holiday Sales, 1/18/2021
How Target uses Click and Collect Strategies to Increase Retention
Managing inventory with demand is difficult.
If a product is out of stock, you may lose the sale. Target actively combats this by assuring customers that their item will be restocked.
If an item is unavailable for immediate checkout, they offer a Pick Up option at a later date. The copy is great. They focus on the benefits of "free" and emphasis "how soon" the customer is able to get it, reframing the fact that the item is out of stock at the local location.
In this way, Click and Collect creates a much better customer experience and has become a key part of their customer retention marketing strategy.
The Click and Collect Experience: Why Customers are Demanding Convenience
We've covered the shortcomings of the eCommerce experience before with ROPO (Research Online, Purchase Offline).
In that article, we shared how Brick and Mortar sales still account for 90% of all sales. Shoppers want the ability to see and touch items, and ensure that items fit.
Click and Collect combines the best of eCommerce and traditional retail.
Benefits of Click and Collect to Shoppers
Below are the most often cited reasons customers give for using click and collect services.
Of all the reasons, the most often cited is speed. According to the latest study by conducted by Bell Howell, 88% of respondents cited speed as a reason for using click and collect.
Shipping costs were the second most cited reason, with 76% of respondents noting it.
It is interesting to note that many of these reasons correlate to the top reasons shoppers abandon their eCommerce carts.
-> Unexpected Shipping Costs
->No Express Shipping Available
-> Return Policy Wasn't Acceptable
Click and Collect solves all of these issues with cart abandonment, and is a major reason retailers are investing in Click and Collect.
Increased Use and Importance in Holiday Season
Knowing how Click and Collect helps consumers, it is easy to see why demand and usage for the service increases during holiday seasons like Black Friday and Christmas.
Speed is crucial for last-minute shoppers. They need to take control of the timing. Many cannot afford to wait even a day for their deliveries to be made.
The store itself is packed, making it unpleasant to some consumers. WalMart famously focused on Click and Collect as a way to boost sales during the holiday season last year (2017).
Click and Collect Benefits to Retailers
Investing in Click and Collect creates numerous benefits to retailers.
The biggest benefit to retailers are the increased sales Click and Collect generates. According to the same Bell and Howell study, a full 49% of shoppers made unintended purchases while picking up their items in store. Internet Retailing actually put this number higher, saying between 60-75% of Click and Collect shoppers purchase additional products.
A much harder benefit to define is the increased online conversions companies are having by offering Click and Collect fulfillment. What we do know is that both shipping costs, shipping timing, and worries about returns are all major reasons for cart abandonment.
Lastly, Click and Collect eliminates eliminates online returns. Customers are able to experience the product in-store, and make use of existing service centers if they need to return the item.
Lower Your Cart Abandonment Rate Click here to get access to a free PDF field guide that shows you 19 tactics to increase email opt-ins - the most essential step in shopping cart abandonment.
How to Implement a Successful Click and Collect Service
Click and Collect Challenges
Retailers are experiencing a number of challenges implementing Click and Collect.
According to a report by JDA & Centiro, many retailers are failing shopper's expectations.
35% of surveyed shoppers expressed discontent with long waiting times. Worse, 32% said that store associates were unable to locate the products they ordered.
Part of the issues stemmed from stores not having a dedicated pick-up location.
The truth is...
Click and Collect is going to add tasks to your existing store personnel. And, unfortunately, customers seem to be unwilling to pay for the added convenience of Click and Collect.
The result? Profit margins are being squeezed from many retailers.
Keys to Make Click and Collect Succeed
Below are a number of best practices to consider when implementing your Click and Collect service.
Many of these best practices center on making the service more convenient for shoppers.
eCommerce Best Practices in a Buy Online, Pickup Offline World
Lastly, it is important to note best practices for successful eCommerce stores competing in a click and collect world.
Implement Click and Collect by unifying data
The essential truth is that customers value convenience. We've seen how the top reasons for cart abandonment revolve around shipping times, extra costs, and hassles in setting up accounts.
Increasingly, we see the emergence of shoppers desiring an omnichannel retail experience.
To facilitate this, you want to unify data between channels and across devices. Barilliance is able to do both - enabling you to get a 360 degree view of each customer, create accurate segments, and send personal, conversion optimized triggered messages to each.
Take advantage of personalization to contextualize cross channel customer experiences
Personalization techniques enable click and collect.
You can use dynamic content personalization to show customers when their order would be ready to pickup and give detailed local store information based on where they are vising the site from.
Create Your Omnichannel Strategy: See how Barilliance connects data across devices and channels, enabling conversion, personalized messaging here.
While Click and Collect is one method of reducing cart abandonment, there are lower hanging fruit.
Check out our Guide on Cart Abandonment for a broad overview of what your store can do to recover more sales.
If you already have an effective cart abandonment campaign in place, you can multiply results by capturing opt-ins before they reach the check-out. Download our free book on 19 Tactics to Increase Email Subscribers here.