The British invented the railway during the Industrial Revolution, but in the intervening two hundred years the French have delivered superior customer experience on their TGV high-speed train network. In CPG and Grocery e-commerce, the French were the first to pioneer click and collect programs with their “Drive” format. Yet the British now lead in delivering the most innovative solutions for U.K. shoppers.
It has been a decade since Auchan’s Chronodrive launched its “Drive” pick-up service to collect non-grocery products from local stores. Drive pick-points continue to expand in France, outnumbering hypermarket formats by some estimates. The U.K. was late to the game, but the market has come a long way since Tesco launched click and collect in 2011. There is now near universal adoption by the major retailers and competition is fierce.
U.K. e-tailers have made substantial investments in site functionality and user experience. L2’s upcoming Digital IQ Index®: Personal Care: U.K. study looks at the top e-tailers’ site functionality, including behemoths Amazon.co.uk and Tesco.com and relative late-comers such as Morrisons.co.uk and Waitrose.com. The vast majority of retailers offer click and collect. And of all the e-tailers with a brick-and-mortar footprint, only Morrisons has failed to step up. (Although it too has announced plans to launch lockers this year.) Ocado and Waitrose are taking on larger e-tailers by allowing users to import shopping lists from other online supermarkets in an attempt to make up for lost ground.
A few U.K. supermarkets are taking it a step further and targeting transport hubs for collection. This summer Waitrose announced plans to open a locker for click and collect at Gatwick Airport. Tesco and Waitrose have now joined Asda in testing click and collect points at Tube stations.
Retailers have good reason to invest in click and collect. A recent McKinsey study estimates click and collect programs to have on average 30% higher profit margins than home delivery. Yet, neither Aldi nor Lidl are providing online shopping solutions. In fact, the German Aldi site states that the company does not believe online sales are compatible with its value proposition. As pricing pressure from discounters continue to weigh on U.K. supermarkets, finding more profitable and differentiated routes to customers is critical.