Click, collect? The retailers fighting back

MIKE O'DONNELL
Last updated 15:59 15/02/2014

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OPINION: MY MATE Dave is a bit of a rugby nut. A V8 Commodore driving lad from Taranaki, he can give you chapter and verse on each of the five times the 'Naki has won the Log o' Wood, as well as some near- misses over the last century.

Now Wellington-based, he coaches his son's footy team, and catches as many big games as he can. While rugby union is his game of choice, he was happy to join the thousands of outrageously clad spectators who last weekend made Wellington party central for the staging of the rugby sevens.

Dave's not big on dressing up, but his kids love it. So they went online in search of some outfits. His canny 10-year-old daughter found a great Greek Goddess get- up on an online auction site and he hit "Buy Now" for her. The outfit arrived by courier the next day - pretty stunning service given the seller was based in Australia and shipping was free. NZ Post finds it hard enough to do overnight across town, but this Aussie crowd managed Sydney to Wellington overnight for nix.

Free shipping and expedited delivery were two of the mega trends in e-commerce last year and they're now starting to hit our shores. For traditional retailers trying to trade profitably in a world where competition has moved from the local to the global, it's yet another challenge.

Global giant eBay was one of the early movers with its eBay Now service in 2012. This allows buyers to purchase items from local stores and have them hand- delivered in an hour for just US$5.

Amazon spent around US$1 billion last year putting in place warehouses that can provide same-day delivery to a selection of major cities in the US and Europe. They also offer free domestic shipping for items over US$35 and attracted media hysteria for their purported experiments around delivering items via remote control drone.

A recent e-commerce survey by investment house Forsyth Barr found huge variation across New Zealand retailers when it came to web store delivery services. Way out in front was Hallenstein/ Glasson who not only provide free shipping to local buyers for all three of their ranges (Hallensteins, Glassons and Storm), but free delivery to Australia.

Briscoes web stores (including Rebel Sport and Living and Giving) came in second, charging just $5 for local shipping. Those who came lower in the ranking included Kathmandu, The Warehouse, Michael Hill and Pumpkin Patch. A surprising number didn't offer overseas shipping at all according to the survey: perhaps they are allergic to overseas dollars.

At the same time shipping is becoming quicker and cheaper, non-shipping is also on the rise with "click and collect". This is where you buy an item from a shop's website but then collect it yourself. According to new data from Capgemini almost 19 per cent of online sales are now click and collect (up from 13 per cent the year before).

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The drivers here are convenience and time - busy metropolitan buyers have time to indulge in couch commerce in the evening but are time-poor during the day. But they are happy to grab the item from downtown premises.

As with free shipping, local companies are starting to catch on. Kircaldie & Stains Online has led the charge domestically. As well as offering free delivery on all online purchases, Kirks offers click and collect from its Lambton Quay store. Dick Smith and Countdown have followed suit.

Meanwhile The Warehouse/ Noel Leeming is expanding its click and collect service so customers can collect not just "red shed" products but also Torpedo7, Ilovebeauty, and No 1 Fitness items.

There's a sweet irony here, as well as an opportunity for the bricks and mortar stores trying to compete. It's actually easier for a physical retailer to set up an online facsimile, than it is for a pure online company to set up a physical presence, whether it be a single store or a chain.

In the US and Europe this had led to Amazon installing thousands of Amazon Lockers to allow people to pick up items locally - often located within existing grocery and convenience stores.

So rather than the web rendering traditional retailers obsolete, this new development sees the web delivering new foot traffic.

Looking around New Zealand at the moment there are a range of companies with extensive physical presences that might look to such an opportunity. NZ Post is the most obvious one, but consider also the likes of RD1, Farmlands, Countdown and Repco.

It might well be that in a year's time my mate Dave picks up his online-bought costume at the same time he's picking up a 4-litre pack of oil for his Holden.

Mike "MOD" O'Donnell is an ecommerce manager and professional director. His Twitter handle is @modsta.

- The Dominion Post

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