Comment: Will click and collect save the high street?

It’s no secret that online spend is having a major effect on the high street, and that many retailers have become over-committed to locations that are no longer yielding enough sales.  It’s a huge challenge for the industry and retailers have to ask themselves difficult questions about how to respond – whether it’s improving the in-store experience or managing exposure to stores that are no longer profitable.

One answer has been to embrace online by using it to bring customers to the store through click and collect.  This approach capitalises on the fact that e-commerce still has major flaws when it comes to logistics, returns, brand trust and, moreover, the hands-on experience of shopping, trying products and experiencing purchases first hand.

We’ve also noticed that, by protecting the link with stores, retailers also benefit in some less-expected ways.  Working with retailers across a number of distinct sectors, we’ve seen a very strong relationship between proximity to stores and increasing online sales penetration, indicating that, at the moment, having a store network actually often boosts online sales.

However, our advice to retailers is that this is a short-term solution, especially for the high street, where poor logistics, unfavourable opening hours and limited parking often mean that stores aren’t convenient locations for collecting online buys.

Added to this are the incremental improvements being made to e-commerce, which will increasingly overcome the shortfalls in delivery and shopping experience.  We’re realistic that it’s nowhere near the finished article, and online retailing’s main downfalls are still motivating people to collect in store.  Nonetheless, our forecasts indicate that online spend for all categories of comparison goods will continue to rise and rise.

In essence, the problems facing online retail are largely surmountable and, as technology continues to improve, click and collect will become comparatively less convenient as solutions emerge for home delivery.

Shopping will, of course, continue to be a leisure activity – and that’s where online retail is less able to compete.  However, what we’re seeing is a consolidation of spending into a much smaller band of successful centres.  These are better placed for making retail a leisure experience and, as the market polarises, retailers will be left with stores on high streets that lack the quality to attract sufficient numbers of shoppers.

In these locations, the fundamental flaws that face the high street will be far less easy to address.  Shoppers are changing their behaviour when it comes to traditional shopping and, for the majority of retailers, it means they’ll have to reduce the number of stores in their portfolio. 

Click and collect can’t mask this shift in the way we’re shopping and, while it’s a great makeweight as online shopping develops more sophisticated solutions, it shouldn’t stop retailers from cutting down their exposure to stores in diminishing centres.

• Paul Langston, Consulting Partner for CACI