Is Click & Collect Undervalued?

J. C. Penney recently stated that in the third quarter, ending October 29th, consumers used the Click & Collect facility for nearly 40% of JCP.com orders; picking them up at a local store.  This is an impressive number, particularly when the facility was not in place until earlier this year.  This figure compares to Target.com at 15% and Kohl.com at 5%.

However, the really interesting aspect of the J. C. Penney statement is that 40% of those who visited the store, to pick up their online order, made additional purchases while in the store.

57% of respondents to a survey Internet Retailer conducted in August said they had picked up an online order in a store. Click & Collect is clearly a facility that consumers value.

If we look at the J. C. Penney figures and use some sample data (plug in the figures you think are appropriate to your situation) we see the bottom line impact of Click & Collect.

Bottom Line Revenue Impact

Sample Data

Total number of orders                 100

Average order value                        $50

With Click and Collect

100 orders (60 + 40) @ €50                        $5,000

In-store purchases

40 customers visit store to collect

16 (40% of 40) of these shoppers buy more while in the store

Assume additional purchase while in store            $30

Increment revenue         16 by $30            $480

Without Click & Collect facility

Without the facility, some percentage of the 100 customers will opt to purchase elsewhere because they need to pick up orders at their convenience, rather than be available for a courier delivery. Assume this figure is 20%.  This means that of the 100 prospective orders only 80 are actually completed online, where Click & Collect is not offered, giving revenue of €4,000 (80 by €50).

In such circumstances the bottom line impact is:

Without Click & Collect                  €4,000

With Click & Collect                         €5,480

Incremental revenue                      37%

Clearly the impact will be different depending on the assumptions used.

Why not check out the impact using your numbers?

From the prospective of an ecommerce model, Click & Collect helps to increase the conversion rate (100 orders rather than 80 in the example above) and if we add in the in-store purchases it also increases the average order value.  These are two of the three key variables in  The Fundamental Equation for Ecommerce Revenue 

 

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Is Click & Collect Undervalued?

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