Click and Collect poised to capture future supermarket spend

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Click and Collect concepts and drive-in formats are expanding rapidly across Europe as retailers seek to capture spend from omni-channel shoppers. By integrating mobile and online ordering with their physical stores, retailers can take their offer directly to the shopper, reports retail and distribution optimiza-tion software supplier Aldata. Click and collect and drive-in formats are a growing phenomenon across Europe, as retailers look to capture spend from an increasingly omni-channel shopper and make best use of their existing store and supply chain portfolios. With much physical store expansion now on hold, leading grocery retailers are eager to maximize their investments and drive productivity of their existing assets. Click and collect also enables retailers to combine a larger food and non-food offer in a local store.

For the consumer, click and collect is a no-brainer with multiple benefits, not least convenience. Shoppers desig-nate the collection time and pick up point. They are no longer constrained by retailer’s home delivery schedules.

Mobile ordering is another bonus, allowing consumers to shop, literally on the go; while real time availability of products on the retailer websites ensures shoppers will never be disappointed with substituted items. In France, leading retailers go one step further by providing an opportunity for shoppers to vet and check their fresh produce at the pick-up point, de-risking the purchase and eliminating a potential barrier to online sales.

Drive-in formats are expanding rapidly in France Research published by French retail magazine LSA put the number of drive-in formats in France at 700 at the end of 2011,10 times the number three years ago. Leclerc, for instance, is reported to be opening one to two drive-in formats per week. Drive-ins are popular with mums because they help them save time and are practical. They also appeal to older shoppers, who like help with heavy shopping; while Parisians are reported to use these road-side locations to collect a weekend shop on their way home.

According to LSA, customers are typically young families and heavy spenders (basket sizes are bigger than in hyper-markets) and once they convert to this shopping model, they tend to stick with it.

Acceptance is growing. Kantar Worldpanel reports 2.3m French households have visited a drive-in during the last year and forecasts the number will rise to 4.5m by the end of 2015, equivalent to 6.1% of the market.

Three models are currently under the microscope in France: store-based picking (the most popular), drive-in warehouses and standalone drive-ins, which are built away from a main supermarket. Casino opened its first solo, standalone drive-in - Casino Express - on the outskirts of Lyon in September 2011.

Orders can be placed online at a dedicated website but topped up via a kiosk at the drive-in. The website has been developed to show real time availability so customers are only able to order products that are in stock. Casino aims for a maximum turnaround of five minutes on the shopper’s arrival and a minimum of two hours from the time of their internet order.

Leclerc operates 46 drive-in warehouse sites, which are attached to stores, and is reported to be targeting 400 sites by 2015 and 700-800 by 2017-18 comprising two drive-ins per site - one attached to the store and one standalone.

In July 2011, Leclerc opened a drive-in in a south-eastern suburb of Paris, which is attached to the main hypermar-ket but totally autonomous. It manages 170 orders per day with an average preparation time of 10 minutes. Like Casino Express, it offers real time stock management plus the opportunity for customers to reject any fresh produce at pick up.

Click & Collect grows in popularity across Europe German and UK shoppers are also warming to drive-in formats, according to Aldata’s research.

It found 23% of German shoppers would choose drive-through over shopping in-store, rising to 32% of 18-34 year olds. A fifth of UK shoppers, meanwhile, admitted a preference for drive-in.

In Germany, Rewe launched a trial Drive store in Cologne in November 2009 and has extended the pick-up service to a further 10 Drive locations based at existing stores. Shoppers can order from a range of 10,000 skus, including food and non-food items.

Metro Group’s Real,- opened its second standalone drive-in supermarket - Real Drive - in Cologne in October 2011, following a trial in Hanover. For Real,- a key benefit of the model is avoiding the downside of shipping and delivery charges associated with online shopping.

Later in December 2011. Hypermarket operator Globus also followed suit and launched its first standalone drive-in store in Ensdorf, Saarland, Germany, in December 2011, and is planning a second outlet in Rhineland-Palatinate this year. Customers can select from an online range of 6,000 products.

In the UK, while pilots for Drive-In are underway leading retailers Tesco and Sainsbury’s are both widening their extensive Click & Collect operations to support sales of grocery items as well as their current general merchandise offer – Tesco claim that 70% of online general merchan-dise orders are through this channel, so there is much to gain by adding grocery to this mix. Click & Collect adds to the retailer’s established home-delivery services.

Elsewhere, the Co-operative, which operates 3,000 convenience stores and claims to be the most frequently visited retailer in the UK, is planning an online grocery service and would be well placed to offer click and collect. It could even include its high street bank and pharmacy outlets in the mix.

Mercator in Slovenia is trialing click and collect services by clustering smaller convenience stores around larger hyper-markets, exposing shoppers to the hyper-market assort-ment, which can be ordered online and delivered to the local branch.

Making Assets work harder demands even more from your supply chain

The retailer benefits of click and collect and drive-in formats are clear, says Donal Mac Daid, VP marketing Aldata.

“Today’s reality is one of the omni-channel shopper who dictates where, how and when they want to purchase. The blurring of store and web retailing click and mortar concepts enables retailers to use their existing assets to offer more and sell more, whilst delivering the convenience today’s shopper is looking for. For retailers it’s about understanding their cross-channel fulfillment options, how best to manage inventory and to be clear on

the role they want their stores to play in this mix.”

Aldata can help retailers evolve and improve their omni-channel capabilities for their shoppers, says Mac Daid. “We know how to implement flexible supply chains and introduce concepts that can extend assortments without increasing physical space and manage assortments across channels. We also understand the importance of fulfilling the order and enabling the shopper to decide exactly how they want to shop.”

Aldata’s expertise in omni-channel solutions spans order management, order picking in distribution centers, fulfillment centers or stores; and managing the replenish-ment cycle of products. This capability is vital in order to provide excellent customer service, however consumers choose to shop. The solutions also allow retailers to adapt to their customers’ changing needs, expand their offers and efficiently optimize their existing store assets.

Sources

Experian: “European Footfall Year To Date”, Nov 2011 Retail Times quoting Euromonitor International: “Retail Spotlight is there a future for the hypermarket store format”, Feb 2012 Commerces & Territoires quoting Kantar Worldpanel “Le Drive": 4.5 millions de clients fin 2015, soit 6.1% de part de marché, Apr 2012 LSA: "Special Drive", Oct 2011

Click and Collect poised to capture future supermarket spend

www.aldata.com I info@aldata.com Copyright © Aldata Solution. All rights reserved. Aldata Solution and its registered trademarks are the property of Aldata Solution Oyj and/or its affiates. Other names may be trademarks of their respective owners

Aldata Aldata is a global leader in retail and distribution optimization. Our software and service solutions help retailers, distributors and manufacturers dramatically improve their business performance. We optimize categories, space, supply, logistics, and consumer engagement to increase our customers’ revenue and margins, reduce time, cost and waste, and enhance on-shelf availability, service, and retention. Founded in 1988, Aldata has an unparalleled track record of delivering successful projects for the world’s largest retail and consumer brands, national wholesale and distribution organizations, and regional store.