The UK is one of the top markets for e-commerce penetration, with online’s share of retail sales reaching 18% in 2017, a 6% increase year-on-year. Strip out food sales, and online hit 24% of all retail sales in December 2017 — the only channel of growth in a sluggish market. In the three months running up to Christmas, in-store sales of non-food items fell 4%, while online sales grew 8%.
In this environment, retailers are reassessing the role of their stores, realizing that they offer a key competitive advantage over pure play e-tailers such as Amazon and ASOS. Given the high level of e-commerce in the UK and the fact that consumers typically don’t live far from their town centers or local malls, it’s not surprising that click and collect penetration in the UK is among the highest in the world. According to L2’s Digital IQ Index: Specialty Retail, 79% of UK retailers offer click and collect, compared to only 35% in the US.
However, while most retailers have innovated their sites to optimise the online shopping experience, few have considered the implications on store design for when consumers collect their orders.
Many UK retailers have launched collection services by converting a checkout desk at the far back of the store, forcing consumers to navigate the whole store to collect their online orders. This is ironic, as consumers often shop online specifically to avoid suffering the lengthy queues and confusing layouts of the physical store. Consequently, consumers’ ratings of the click and collect experience are often poor.
A small number of UK retailers are completely rethinking the layout of their stores to cater to online shoppers. Size, a UK chain offering designer branded training shoes, casual sportswear, and accessories, converted an apartment above its Covent Garden store into a dedicated collection point, allowing online shoppers to collect their orders without even having to enter the store.
This week, fast fashion retailer Zara opened its first store that caters exclusively to the online shopper. The 2,150 sq. ft. shop in London’s Westfield Stratford City shopping mall was designed primarily for the collection of online orders; it will also offer a selection of women’s and men’s clothing that can be ordered online while in-store, with delivery either later the same day or the next day. Store staff will be equipped with mobile devices to help customers buy through the Zara website. In addition, Zara is building another new store that will feature an automated online order collection point serviced by a robot that can handle 2,400 packages simultaneously.
Rather than redesign the in-store layout, UK supermarket Asda is installing parcel vending machine towers outside its stores, following a successful trial by parent company Walmart in the US. These parcel towers can hold up to 500 items and allow customers to collect online orders from both Asda and other e-tailers including ASOS and Missguided — a smart move that can help drive increased footfall for the stores from non-Asda customers.