Retailers must scrap ‘penny-pinching’ click & collect fees to encourage footfall, says ParcelHeroNews
Posted by: electime 6th October 2022
As John Lewis suspends its click & collect fees until October 19, the home delivery expert ParcelHero says retailers should abandon them permanently. It argues click & collect drives footfall to stores and charging for the service is a false economy.
John Lewis has announced that it will continue to suspend click & collect fees until 19 October, to encourage shoppers to order ahead of Christmas. However, the home delivery expert ParcelHero argues that axing click & collect charges should be for life, not just for Christmas.
It argues in-store click & collect is a key tool to encourage shoppers back to the High Street. Charging for this service is pure penny-pinching, argues the courier price comparison site.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘Retailers who continue to charge for pickups in their own stores are misguided. Our High Streets need as much encouragement as possible, particularly now consumer confidence has slumped to a record low. Continuing to charge customers for the “privilege” of visiting stores to pick up an item they have already ordered seems at best arrogant, and at worst downright foolhardy.
‘Retailers large and small are guilty of missing the bigger picture by charging their customers extra to pick up items they have pre-ordered online. Some retailers click & collect charges can be quite significant, while others are so minimal that they beg the question, why bother?
‘The John Lewis partnership has partially seen the light by offering free click & collect to its department stores and Waitrose supermarkets until 19 October, after which it will presumably revert to its usual charges. John Lewis introduced click & collect fees back in 2015 when the retail landscape was very different to today. Though charges are currently suspended, John Lewis’ website usually says: “We try to keep costs down as much as possible, but as your order has to be delivered to your chosen pick-up point, a small fee is added.” That fee is £2 for orders under £30. John Lewis’ sister supermarket chain Waitrose offers free collection, but shoppers must spend a minimum of £40.
‘One must wonder why John Lewis feels the need to charge £2 to customers picking up an online order in person, when the opportunity for increased sales from customers visiting stores to pick up their goods is likely to encourage further purchases.
‘At least John Lewis has dropped fees for now. Other stores are grimly sticking with them, often with quite complex fee structures. For example, shoppers with New Look are offered free next-day click & collect for orders over £34.99 or face a charge of £2.99. Alternatively, if they are prepared to wait for 3-5 days, they only have to pay £1.99 or nothing at all if they have spent over £19.99. That’s quite a smorgasbord of options.
‘Far simpler are the click & collect fees for stationers The Works. Orders over £10 are free, but there’s a £1.99 fee to pick up orders worth less than a tenner. If that sounds a little like cheeseparing, it’s nothing compared to Next’s fees. Says Next: “At times of peak trade, we may charge 25p for the Next Day To Store service.” That feels as if the fashion retailer is cutting off its nose to spite its face. Why risk annoying customers for such a small sum?
‘At the other end of the scale, supermarkets are now charging quite sizeable sums for their click & collect services. Asda, which as recently as last year didn’t charge for next-day collections worth over £25, now charges fees ranging from £3.50 for express services through £1. 50p for same day to 50p for next day or later, or £4 if the spend is less than £25. That’s a set of options complicated enough to confuse a Chancellor…
‘Sainsbury’s click & collect options are equally complex but at least there’s a free option… for some days of the week! For orders over £25 Sunday to Wednesday there’s no collection charge, but from Thursday to Saturday there’s a 50p fee. Its most expensive option is the £6 charge for Same Day Click & Collect orders under £25, which seems a little steep.
‘Tesco has a more streamlined offering. It charges up to £2, depending on the timing of the slot booked for pick-up, but the minimum order value must be £25.
‘All these supermarkets may wish to re-examine the money they make on charging for click & collect versus the amount they are losing by discouraging customers from using their click & collect services and consequently not visiting their stores.
‘Finally, if anyone is any doubt about the true value of click & collect, the food home delivery specialist Deliveroo is actually introducing a click & collect alternative to its home deliveries. It’s opening its first brick-and-mortar grocery store in New Oxford Street, London, in partnership with Morrisons. This will allow customers to shop for groceries by ordering via the Deliveroo app, for in-store collection. When online companies start to build shops in order to offer a click & collect service, those stores that undervalue the benefits of in-store pick-ups may want to think again.
‘To find out more about how retailers are using new technologies to develop their click & collect and home delivery options, see ParcelHero’s study on “Dark Stores” and the High Street of the future at: https://www.parcelhero.com/research/shop-of-the-future