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How Click and Collect Last Mile Impacts Logistics

Categories: BCO/Shipper.

Last mile delivery has long been one of the toughest challenges for ecommerce retailers. That hasn’t changed, but now that more buyers than ever are turning to online shopping channels to get the products they want consumer expectations for delivery speed and service are increasing rapidly. Even some of the biggest big box retailers are having difficulty keeping up with mounting demand.

Innovative retailers are coming up with creative hybrid ecommerce solutions to offer customers same-day service without managing a fleet of couriers. Click and collect last mile represents one such fulfillment option that is growing in popularity.

What is click and collect last mile?

Popularly known as in-store pickup, click and collect is the practice of using brick and mortar stores to replace last mile fulfillment channels on ecommerce purchases. Rather than shipping a purchase through standard mail or a third party delivery service, the retailer picks the product from their inventory and sets it aside for pickup by the purchaser at a convenient location.

Click and collect last mile allows retailers to provide same day service for customers with fewer costly and time-consuming exchanges. That means rapid turnaround without the hassle from missed deliveries and lost packages. It also reduces the overhead related to shipping — a cost that, following Amazon’s lead, is increasingly covered by sellers.

A nice bonus for retailers: Many shoppers end up making unplanned purchases upon collection (51% of active online shoppers, according to one study).

Why do buyers choose click and collect?

Click and collect offers a number of advantages to customers who don’t mind taking on last-mile themselves. A buyer can pick up an order within hours of ordering online, rather than waiting until the next day or later for delivery. Making the purchase through ecommerce channels ensures that it will be available upon arrival — an essential step to minimize wasted trips during a pandemic — and most stores have quick, efficient pickup available (including curb-side options in many cases).

Nowhere is click and collect more appealing than in supermarket retail. Consumers like the convenience of ecommerce for buying groceries, but they also want fast delivery (and show reluctance to paying delivery fees). Click and collect allows customers to get groceries fast while cutting last mile fulfillment costs and complexities out of the equation.

Different Models for Click and Collect

The three most common methods for enabling click and collect include:

  • In-store pickup — A retailer with a brick and mortar presence pulls an item from inventory to fulfill ecommerce orders at an in-store pickup counter (usually customer service).
  • Near-store fulfillment — Rather than using an indoor customer service pickup, buyers collect their goods at a drive-thru or curbside outlets adjoining a brick and mortar store.
  • Stand-alone fulfillment — Pickup is completed at free-standing hubs, either at post offices, pickup lockers, or at third-party locations.

Each method comes with a unique set of advantages and disadvantages, from implementation to customer familiarity and beyond. As retailers look for ways to capitalize on 2021 retail supply chain trends, embracing convenient click and collect solutions creates opportunities to capitalize on changing consumer tastes.

Click and Collect and Reverse Logistics

Returns and exchanges have long been a sunk cost for ecommerce businesses. When a customer wants to return a product, a number of factors are involved — shipping, receiving, and processing the product for warehousing of course, but also fulfillment of replacement orders, refunds, and accounting for lost or damaged inventory — and each of these factors digs into the bottom line.

Reverse logistics are costly for running an ecommerce business, but returns are also a big hassle for customers who may not have time to hit the post office (or don’t want to pay return shipping). That’s part of why the practice of buy online, return in store — BORIS, for short — is taking off. BORIS is the opposite of click and collect in many ways, but it requires very similar infrastructure. Buyers who wish to return or exchange a product they bought online can go to a physical location to drop off their purchase. No postage, no post office, no problem.

The result is ease of use for customers and a drastic reduction in profit loss for retailers. By some accounts, a 40% in-store return rate could increase profit margins by up to 7% due to lower reverse logistics cost.

Conclusion

Last mile has been one of the fastest growing sectors within the supply chain. Many logistics experts are now wondering: How might click and collect impact this growth?

Like most trends from the past year, it’s hard to predict how click and collect will weather in a post-COVID-19 world. But it’s sudden spike in popularity is a good example of how unexpected variables can quickly throw conventional wisdom out the window. For innovative retailers, supply chain 3PL experts can help you find novel ways to fulfill consumer demand for instant gratification.

Technological transformation is reshaping the supply chain every day. To stay competitive, you need good, smart, technology-aware partners like GlobeCon to thrive in the modern supply chain environment.

Partner with a leading ecommerce fulfillment expert at the port of LA and Long Beach. Contact us today!