As click-and-collect becomes an increasing focus for UK retailers, Drapers spoke to Tim Robinson, CEO of Doddle about retail innovations and the future of delivery.
Why did you launch of Doddle?
Christmas 2010 was the first time carriers were unable to cope with ecommerce deliveries and customers were let down as a result. Consolidating deliveries was a way to mitigate the strain caused by home delivery. At the time I was working for Network Rail as managing director of its freight business, and the option to trial using railway stations as consolidation centres for parcels, taking advantage of great locations and high footfall, was too good an opportunity to pass up. And thus, Doddle was born.
What are some of the challenges ecommerce has brought for retailers in terms of delivery?
Delivery charges factor into consumers’ overall purchase decisions, so retailers have to think about merchandising delivery options almost as much as merchandising products. Balancing margins on the delivery option against the margins on the product being purchased is another challenge in this area that few retailers have cracked.
Customers of our fashion retail partners who use Doddle have an 11% higher average basket value
What advantages does click-and-collect have?
For consumers, click-and-collect is the most reliable delivery option because there is no risk of missed deliveries or stolen parcels. Click-and-collect also attracts many consumers, especially when it’s offered as a free delivery option. Shoeaholics is an example of a retailer doing this well: it has made click-and-collect the only free delivery option, enabling it to reduce failed delivery rates and lower delivery costs through consolidation.
Why do consumers and retailers benefit from click-and-collect?
For consumers, the benefit is convenience. Being able to choose a location that suits them to collect their purchases at a time that suits them. As a result, we have found the customers of our fashion retail partners who use Doddle have an 11% higher average basket value, with a 10% higher average basket size and their frequency of purchase is three times higher than customers using traditional delivery methods.
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What are common issues retailers encounter when implementing click-and-collect?
Building a click-and-collect capability into a retailer’s existing store network from scratch is not easy and almost all retailers encounter the same problems. Demand for click-and-collect is huge at lunchtime and the end of day. Everyone wants it at the same time. Managing peaks and being able to queue bust at these times to serve customers quickly is key. Many retailers will come across storage issues: how to store parcels efficiently. Lots of retailers will store parcels in crates, but these do not enable store teams to reconfigure the storage to accommodate more parcels at busy times.
There is a huge opportunity to cross-sell to customers while they are in store collecting an order
Additionally, creating an efficient parcel location system can be an issue: many retailers struggle with locating a customer’s click-and-collect order quickly. Alphabetically ordering of parcels is not the most efficient system and increases reliance on manual processes.
One last thing we have found is that there is a huge opportunity to cross-sell to customers while they are in store collecting an order, yet store assistants rarely have any information about the customer’s purchase. If store assistants knew the customer had purchased a dress from the party collection, how many additional sales could they make by letting the customer know about a new accessories collection, or footwear sale, while they are in the store.
You have Doddle shops in other stores, such as Morrisons. Why did you choose this a route?
Customers told us they loved using the service at railway stations on their commute, but they wanted more locations to choose from. By partnering with an experienced retailer such as Morrisons, we can increase network by taking advantage of Morrisons’ well-researched prime sites. For both Doddle and Morrisons customers, the partnership offers the next level in convenience by putting a range of useful services under one roof.
What have you learned from being a specialist click-and-collect company, do you see click and collect as becoming the dominant delivery option for ecommerce?
Click-and-collect is already the fastest-growing delivery option, accounting for 25% of multichannel purchases. Online retail association IMRG predicts this will continue to grow by 20% year on year for the next three years. However, no UK retailer has a head of click-and-collect. We have learnt how to make click-and-collect as effective as possible for retailers, by building logistics systems to cope with future volumes and designing delightful in-store experiences that keep customers coming back. We’d love to become the proxy head of click-and-collect for every retailer and we think we’re in a good place to do that.