IT services and solutions for retail and hospitality

  • 6 Jul 2015

Why is John Lewis calling time on free click and collect?

If you read the retail headlines last week, delivery and fulfilment was a very hot topic.

Whilst Amazon launched its premium one hour delivery offer in London, in a shock turn of events John Lewis announced it would be charging £2 for click and collect orders under £30, in a move away from “unsustainable” free fulfilment practices.

John Lewis boss, Andy Street, said that at present only 18% of its orders are under £30 in value, a minority figure. Nevertheless, if there’s anything to be learnt here, it’s that the customer will ultimately hold the final judgement on this risky move.

Consumers today have been taught to expect greater convenience, later cut-off times, faster delivery, and all of this not costing a single penny. But, you can’t continue to have something for nothing without someone losing out, and in a bid to reclaim this punishing cost on their product margins, John Lewis has made the call.

It will be very interesting to see if other retailers follow suit, in sight of the outcome of John Lewis’ venture. The industry will be watching the impact of the decision with a keen eye. With Marks and Spencer and House of Fraser amongst the first retailers to shout about their plans to keep click and collect services free of charge to the customer, will they be left with their tail between their legs upon realising they’ve missed the boat to fulfilment sustainability later down the line?

Earlier this year, we carried out an original Retail Assist survey, assessing the consumer sentiment around the click and collect delivery method. Here’s a helpful infographic of our findings:

Click and Collect Retail IT Support

The majority of our respondents use click and collect service because it’s free.

This statistic is slightly worrying for retailers thinking of charging for the service, and might well impact upon John Lewis’ online orders, changing the ecomm/in-store sales balance. 34% of shoppers we surveyed use click and collect at least once every three months, and 17% at least once a month, demonstrating that it’s a very popular choice.

Latest statistics in Drapers on CACI’s retail demographic report show that the typical click and collect shopper is worth £112 on that trip compared with £62 for non-click-and-collect shoppers, another reason that click and collect is a good opportunity for retailers to cash in on, rather than destabilise with changes that are unfavourable to the consumer.

Whatever the outcome, it’s clear that with the current omnichannel approach to retail (any product, any time, anywhere) retailers need to develop new strategies to combat the impact of more demanding fulfilment practices on product margins.

What’s your opinion on John Lewis’ latest move? Will other retailers follow in their footsteps and U-turn on free fulfilment? Post your comments below.

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