Retailing in the Week Ahead, Week 34

In the past month two companies have approached Kantar Consulting with requests to help them prepare for rapidly changing retail conditions outside of Europe, by reviewing insights from inside Europe where changes in retail are already well developed. In light of these conversations,  I thought now would be a good time to remind everyone that Europe has progressed at a rapid pace on four major changes in retailing that we feel will eventually move to the rest of the world. Those four advancements are:  Order & Collect (aka Click & Collect), Proximity, Home Delivery, and Self-Checkout.

Let’s briefly explore the first topic and then try to understand what lessons from Europe could be for companies in other parts of the world.

Order & Collect

It is true that many parts of Asia, particularly Japan, South Korea, and Mainland China, have been open to Click & Collect services for many years and consumers are advanced at using these services.  However, it is our view that these models can easily be duplicated in other parts of the world without too much difficulty. Europe, and especially France, has developed unique supply chain solutions which are complex, and most importantly, fully-integrated with multi-format mass/grocery conglomerates.  The next phase of these advancements is about to get very interesting with companies like Tesco, Carrefour, Casino, J. Sainsburys/Asda all attempting to take their supply-chain capabilities to the next level.  By contrast, Alibaba’s recent investments in physical retail such as that with RT Mart are advanced when it comes to the online element of shopping but are not as sophisticated as those in Europe when it comes to the physical (bricks) elements of shopping.

Companies looking to understand the innovations in Order & Collect and the supply-chains that bind these to physical retailing would be advised to break the insights into three distinct supply-chain models prior to building implications.  These are:

  1. Order to Service Desk.  In this form of Order & Collect, the physical retailer provides consumers with a service desk somewhere at the physical store location.  The supply chain for electronic orders is identical to that of physical orders except that staff are required to multi-task to make sure the physical shelves are stocked and that electronic orders are ready for pickup.  Best in class retailers are using partnerships with 3rd party companies like Zoot, InParcel, Amazon Locker, Doddle, and Collect+ to drive traffic and make this not just about goods at this location but any good in the long-tail that consumers want to purchase and have delivered somewhere except for home/work.  We often find consumers that value privacy shop these collection points regularly. This is important when adult children live with their parents. 
  2. Order to Dedicated “Drive-Through” on Premise.  In this form of Order & Collect, the physical retailer provides a service connected to the local store assortment where you can drive up, collect, and drive away.  This usually requires a one-off investment in store redesign to allow the back room to function in two directions – the normal way for staff to restock shelves and the new way where some of the merchandise gets diverted to cars that have pre-ordered.
  3. Order to “Dedicated Drive or Walk Pickup Points”.  You have to visit France to understand this model but the essential element is that the assortment and supply-chain are not directly connected to the physical store that is nearby.  The “drives” can have their own ecosystem and ways of working independent from any physical locations.

Next week, if you are interested, we can take on the next two topics.  Please email or comment if you are interested.

Also don’t forget to checkout articles/insights you may have missed from Week 33 using the links below.

Key Retail IQ Publications from Week 33

Upcoming Events

Good luck in the week ahead,

Ray Gaul – ray.gaul@kantarconsulting.com | @RayGaul on Twitter or @KantarConsulting | Linkedin

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