Wednesday 22nd Nov 2017 - Logistics Manager

Preparing for peak problems

PennyOdyClick and collect is booming – but with limited resources and the need for new IT tools to support operations how will retailers cope with the Christmas rush?

Ask many parcel carriers about their current greatest growth areas and the odds are a great many of them will mention click and collect: a raft of parcels coming from DCs to stores for those many retailers that either do not have their own delivery fleets or cannot service each branch every day.

For the carriers it can mean restricted delivery hours or negotiating shopping malls; for retailers it is a not inconsiderable expense for what is promoted as a “free service” for customers.

It is also something likely to keep on growing for the foreseeable future.

According to research by consultants Kurt Salmon, click and collect orders are likely to increase four-fold by 2017.

With a few major players already reporting – at peak – up to 500 click and collect orders per store, per day, it suggests that retail sales staff are going to spend an awful lot of time and effort shifting parcels in the months to come.

Of course, as all the experts and analysts point out, it is a great deal cheaper and simpler for retailers to fulfil those online collection orders “from store”.

That, however, demands the sort of real-time inventory visibility which most retailers can currently only aspire to.

Eventually – in a few years and with some realistic investment in better stock management systems – it will perhaps be commonplace, but in the meantime a great many are still shipping their click and collect orders from DCs or, in some cases, “dark stores” in desolate high streets.

Those numerous packages have to be logged and stored using some sort of easily retrievable system and then the collection desk must be adequately staffed to meet demand.

Collection, it seems, tends to “come in waves” with lunch- times or after 5pm on weekdays and Saturday mornings the shoppers’ favourites.

It doesn’t take a mathematical genius to work out that if there are, perhaps, 200 parcels a day and three-quarters of them are going to be collected at, say, 12.30–1.30pm and 5–5.30pm, and if each parcel takes no more than two minutes to find and hand over, then the need is for rather more than three full-time staff working flat out on the collection desk during the lunch break.

IT vendors may happily talk of the need to integrate labour scheduling systems with the daily click and collect manifest; of the need for better “mini-warehouse” applications to speed retrieval; or of extended “space management” tools to ensure that there is enough space available to store all the packages.

As retailers baulk at such challenges, the reality, as many shoppers have discovered, is likely to be lengthy queues at the collection point or a voucher for a free cuppa in the coffee shop and a suggestion to come back in half- an-hour.

As we start the run-up to Christmas and those “at peak” levels become a daily occurrence, it seems fairly predictable that many retailers will start to experience problems.

Some are already suggesting that the click and collect option may need to be “suspended” as the Christmas rush builds or they suggest greater use of “timed” collection choices – rather like the delivery windows familiar to online grocery shoppers.

Others talk of the need to integrate data about store capacity (i.e. space and staffing levels) into the online checkout system so that once a store’s maximum handling capacity has been reached, shoppers will be directed to collect from alternative outlets or be urged to choose home delivery instead.

Or perhaps we will see a sudden and dramatic increase in websites offering ”alternative” collection choices – such as ByBox, Collect+, the local Post Office or pop-up collection desks at railway stations and other “convenient” locations to relieve pressure on stores?

In a world where customers are increasingly demanding such options may not always be acceptable.

As Sam Anderson, senior consultant with Salmon (a different company to the “Kurt Salmon” referred to earlier) puts it: “I want to collect orders when it is convenient for me, not at a time the retailer suggests, so if there is a restriction that would probably act as a deterrent to purchase.” She is probably not alone.

As demographic analysts frequently report the “millennials” – the age group now entering their early 20s – are far more intolerant of poor service than their predecessors.

They are the ones expecting 90- minute or same-day delivery as the norm and for whom an offer of click and collect two or three days hence or at a strictly specified time would be anathema.

Over the next few years these “millennials” will possibly become equally impatient 30- somethings with steadily increasing spending power.

For many couriers same-day services would probably also be included in a list of current growth areas: add the convenience of click and collect and an impatient and potentially dominant consumer segment, and those forecasts of a four-fold increase in click and collect could well prove an underestimate.