Sunday 19 August 2018
 
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Omnichannel cannot save the high street

Verdict Retail Lead Analyst Patrick O’Brien on why click & collect will not be the saviour of the high street

 

An omnichannel approach is essential for major retail chains in terms of being able to engage with customers through the channel of their choice, but the idea that click & collect can halt or even reverse the damage that the online shopping revolution has done to the high street is just wishful thinking.

 

Building a truly omnichannel operation is imperative for retail chains. Without being able to offer a seamless experience between online and physical channels, retailers will undoubtedly struggle to remain relevant to consumers who demand the ability to research, pay, or reserve products across online devices, while being able to pick up or return those goods when and where is most convenient for them. The problem is that omnichannel is now being trumpeted as a panacea for all retail’s woes, and, according to many retailers and industry commentators, means a bright future for the UK’s high streets.

 

There are a lot of assumptions built into this rather hopeful scenario: that consumers’ first choice is to collect online purchases in store; that by having online channels, store-based retailers will win over showroomers; and that it’s feasible for all retailers to build strong multichannel offers.

 

For physical stores to be financially underpinned by the success of their online operations, a major chunk of online sales must depend on the existence of those stores. While click & collect is growing, it does not follow that none of these sales would have happened without the option being available, or that customers would have used it had other delivery options been available, such as Collect+, or locker pick-up.

 

Convenience is a major spending trigger for the modern time-pressed consumer, and while in some cases the retailer’s store will be more convenient to collect from, convenience stores have the edge in terms of location and longer opening hours. Consumers with a satisfactory experience from a Collect+ or equivalent service are more likely to want to use it for subsequent purchases from other retailers, which will be bound to begin offering such services. As these (monochannel) services continue to grow, they will reduce the role of retailer instore collection. As such, the benefits of a multichannel operation over a pureplay start to evaporate, as the retailer’s store is replaced by the convenience store. 

 

So while store based collection will thrive, it will be local neighbourhood stores, not the retailer’s high street outlets, that will benefit the most. Neighbourhood stores have a major opportunity to exploit footfall, selling coffees and breakfast snacks to those picking up items on their way to work or food items for those picking up on the way home. 

 

We therefore don’t believe that in the long term, collection at the retailer’s stores will be the preferred way for shoppers to get their online orders.

 

 

 

 

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