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Viewpoint 11 Managing collection


With ‘click and collect’ now described as ‘mandatory’ by many e-commerce experts the implications for retail supply chains are significant and far-reaching – how will they cope with the challenges?


W


PENELOPE ODY


Regular columnist Penelope Ody is a retailmarket specialist.


hen Argos launched “Click and Collect” back in 2001 other retailers could only


look on in envy: the company’s catalogue showroomformatmeant that it had a pretty accurate idea of stock availability at every location, somanaging the goods “available to promise” for online shopperswas reasonably straightforward. But Tesco.com– launched in 2000 –was finding just howinaccurate its own inventory records could bewith numerous stock-outs only discoveredwhen its store-based pickers tried to fulfil home shopping orders fromthe depleted shelves. A decade or so later shoppers


expect just about everymulti- channel retailer to offer a click and collect service,while a growing number also promise same or next day delivery: among fashion chains Oasis uses Shutl to provide a 90- minute delivery service,Next offers next day delivery for all orders placed before 9pm,while for orders placed before 7pmJohn Lewis promises “click and collect” from 2pmthe following day.


Challenges While customersmay take such services for granted, they can represent significant challenges for retailers – not least because very few, if any,multi-channel players can guarantee complete real-time stock accuracy at store level.New Look’sweb site explains that “click and collect” orderswill be available “three to five days” after placing the order and shopperswill be notified by e-mailwhen their goods are ready for collection.Thismay lag behind customer expectation but is, at least, an honest reflection of supply chain issues. Others prefer to integrateweb site


with stock records and allowawide margin for error, limiting the stores fromwhich goods can be “collected” or else declaring online items to be “out-of-stock”when safety stock levels are breached. Both approaches can lose sales or increase shopper irritationwhen customers find that the items they


Supply Chain Standard September 2012


want are available at the local store. For some, RFIDappears to be the


answerwith systems capable of identifying in real-time exactlywhat is available on the shelves, how many are languishing rejected in fitting rooms,what is in a shopping trolley heading for the checkout or howmany are currently in transit and can reach the store in time to fulfil an order. AsMarks & Spencer’s well-publicised RFIDproject has demonstrated, even themost prestigious retailers have problems maintaining accurate stock records. Itemlevel sales recording at point- of-sale is all verywell, but it only takes a fewmis-scans or a couple of shoplifters to compound the inaccuracies.


Itemlevel sales recording at point-of- sale is all very well, but it only takes a few mis-scans or a couple of shoplifters to compound the inaccuracies.


Identifyingwhich items are


actually available inwhich store is clearly vital for click and collect orders fulfilled fromstore stock. Other retailers such asNewLook, appear to prefer fulfilling click and collect orders centrally: picked and packed and sentwith the next regular store delivery ready for individual collection.This overcomes other problems such as lack of compliance and poor in- store processes. Some retail systems direct “click and collect” orders to the till-point so that sales staff can pick up the details, assemble the order and place it ready for collection. Again, great in theory but during peak timeswill store staff make such orders a priority orwill they prefer to continue interacting with real shoppers?With all retailers looking closely at overheads employing extra staff to handle click


and collect orders in every store seems an unlikely luxury, so good staff training and discipline are needed tomake sure that the online orders are processed as quickly as those “90-minute” delivery or collectionwindows demand.


Complications In thewarehouse, picking and packing individual orders also brings problems.Many online retailers outsource their home delivery orders to specialist fulfilment houseswhile bulk picked store deliveriesmay be handled by a logistics service provider. Asking the fulfilment house to send items to stores overnight or for bulk pickers tomove to packaging individual orders can add further complications – not least a need for increased capacity fromthe night shift if those “orders placed before 9pm” can be delivered next day. When online sales amounted to at


most three or four per cent of the total, click and collect orderswere fewand far between, butwith analysts nowpredicting that in some sectors online retailwill exceed offline by 2020, it is a very different story. By then queues of shopperswanting to collect pre- ordered goods at a till-pointwill clearly be unmanageable – especially asmany retailers regard click and collect as a sales opportunitywith staff encouraged to promote add-on products or up- sellwhen the shopper collects. Equally howmanymore Shutl-


style operationswill be needed as demand for 90-minute delivery grows?What about logistical needs of ad hoc inter-store stock transfers so that the right goods are available in the right storewhen the customerwants to collect? Andwill store orwarehouse fulfilment for such orders prove themore efficientmodel? As high-street sales continue to


fall,many retailers are already looking to rationalise their store estates. Add a significant increase in click and collect orders and activity within those surviving stores could be very different in future.


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