Opinions expressed by Entrepreneur contributors are their own.
While ecommerce has experienced stunning growth since the onset of the Covid-19 pandemic in 2020, the industry still faces its fair share of challenges — particularly in regards to getting products from retailers to customers.
Amid a variety of ongoing supply chain challenges related to global events, the ecommerce industry continues to grapple with the high costs of “last-mile delivery” — the phase in which a product is finally delivered to a customer’s doorstep. Parcel theft, environmental damage and other issues can also hinder the effectiveness of ecommerce deliveries.
To that end, many companies are starting to implement what is known as “click and collect” technology — a valuable tool that aims to streamline and improve these and other common challenges.
Should your company offer click and collect? This article will go over what click and collect technology is and how ecommerce companies are using it to overcome the challenges of “last-mile delivery.”
What is click and collect?
Click and collect is considered a hybrid ecommerce model — and is actually already in use by Amazon and other retailers. In this system, an individual will purchase a product online. Instead of waiting for the product to get delivered to their home, the shopper will instead pick the item up in-store (in-store or curbside pickup), or they will pick the item up from another designated collection point.
For retailers with brick-and-mortar locations, this is relatively easy to implement. Even grocery stores offer curbside pickup, allowing customers to go to the nearest store, scan a code and have their items brought to them by a store employee. Of course, this is only available during store hours.
Retailers without physical locations, on the other hand, use lockers or kiosks, such as Amazon Hub lockers. No employee is present to run these locations. Instead, the retailer places items in an appropriately sized locker and sends a notification and code to the customer. The customer then uses that code to pick up their item at any time.
The availability of non-proprietary lockers that various retailers or concierge services can use is also on the rise, expanding the availability of these systems to more ecommerce sellers.
Related: How to Launch an E-Commerce Brand
How click and collect solves key ecommerce challenges
Ecommerce businesses that use click and collect systems can directly confront three primary challenges that affect both their operating expenses and customer satisfaction.
Though less “visible” than other issues, last-mile delivery is a major challenge for ecommerce brands. In fact, a Business Insider report reveals that 53% of shipping costs are directly attributable to last-mile delivery, with traffic congestion, long distances between delivery locations and the cost of third-party delivery services hindering retailers’ ability to provide prompt and cost-effective delivery.
Click and collect essentially eliminates last-mile delivery altogether. Retailers can simply drop off a shipment at the pickup hub and wait for the customer to come get it. The items don’t need to go on a delivery truck for local delivery, which can greatly reduce shipping costs. The customer can get the item at a time that is convenient for them.
Package theft and damage are another source of financial loss for ecommerce retailers. The New York Post reports that 64.1% of Americans were victims of package theft in 2021, with over 210 million packages stolen. Porch pirates aren’t the only threat — it’s estimated that one in 10 ecommerce packages shows up damaged. Rain, extreme heat and other hazards can easily damage a package that gets forgotten on a shopper’s doorstep.
One example of how click and collect can solve these issues comes from Mileberry, a modular smart locker system designed for both senders and recipients. As David Thompson writes for Tech Times, “The only way somebody can open a cell at a Mileberry Hub is with a collection code or QR code, which means that thieves will have no opportunity to snatch the parcels and take them for themselves. This provides peace of mind to the end consumer since they can rest assured that their parcel is safe.”
Returns are another challenge for ecommerce retailers. The National Retail Federation reported over $761 billion in returns in 2021. Retailers are typically responsible for covering shipping costs. Customers are often inconvenienced when their return is tied to a specific logistics company (such as UPS or FedEx), especially when that company doesn’t have a location nearby.
Some click and collect systems are also designed with returns in mind. They allow customers to return an item to the same locker or store location where they made the original pickup. This streamlines the process for the customer while also helping retailers avoid the shipping costs that would be incurred by using a third-party service.
Related: 7 Tips for Reducing Your Shipping Costs
A more efficient approach to ecommerce
Increased interest in online shopping won’t do retailers much good if they can’t control costs and deliver hassle-free shipments for their customers.
By offering a system that can be used by retailers, couriers and individual customers, click and collect systems are poised to dramatically improve many of the key challenges that have continued to hinder ecommerce — even as it has gone through historic, record-breaking growth.
Without depending on third-party last-mile logistics companies, retailers and brands will have to make significant capital investments to shift their operating models to enable last-mile fulfillment capabilities. Click and collect systems mitigate last-mile shipping, package theft and other challenges, meaning ecommerce sellers will be able to cut costs while improving the overall customer experience in the long run.