Introducing the ROI Calculator – What’s Click & Collect worth?

14 Feb 2019 Marketing Team New Feature

Click & Collect – What’s it worth to you?

This week, we’ve launched an exciting new feature on the HubBox website: Our Click & Collect ROI calculator.

Click & Collect, both the in-store and 3rd party location kind, only continues to grow in popularity with customers. A recent report published by Global Data estimates that the Click & Collect market will be worth an estimated £10bn by 2022, and account for an estimated 13.9% of total retail spend within the next four years.

Customers in the UK (and increasingly the US) expect Click & Collect as a standard service when they check out. Offering Click & Collect or BOPIS (Buy Online Pick-up In Store) not only leads to customers who are more satisfied with their overall shopping experience, but also has a number of positive benefits for retailers, such as reducing the number of missed deliveries customer services teams have to deal with and improving conversion rates.

However, being able to quantify the commercial benefits of Click & Collect has always been a bit more difficult. In October, we released a summary of the results from our retailer study, which found that when retailers offered HubBox Collect Points at checkout, customers spend significantly more on those Click & Collect orders than they do on home delivery. Across all studied retailers, we saw that HubBox orders are an average of 14% higher than home delivery basket value, an average increase of roughly £8.50. When segmenting for retailers who have an average order value of £80 or above, this increase goes up to £24 (30%).

Following up on that report, we conducted further analyses to determine why people spent more when choosing to Click & Collect their shopping. We found that:

  1. Shoppers add more items to their order when they have full control over the delivery and collection process. Removing the moment of uncertainty around delivery increases customers likelihood of making impulse purchases.
  2. Click & Collect is the preferred fulfilment method of customers purchasing higher-value items. As spend increases, so does sensitivity to the possibility of a failed delivery. Offering guaranteed local collection gives customers the peace of mind they need to make a high value purchase.

The calculator we designed takes this data and applies the relevant formulas to predict what returns retailers who want to offer in-store or local Click & Collect can expect. We require only three data points:

  • Your (predicted) number of annual orders
  • Your average order/transaction value (AOV or ATV)
  • The number of stores you would like to offer Click & Collect from (if applicable)

In both instances, we use the available data only to calculate the potential top line returns. Whilst there are additional savings to be derived from less missed deliveries (1 in 10 home deliveries fail on the first attempt, costing retailers an average of £14.35) we have not added those savings to this equation in this instance.

For Local Click & Collect, we work out the expected number of HubBox orders (at 8% take up rate) x Expected AOV increase = Additional Gross Revenue generated

Customers who pick up an item in-store usually go on to make an additional purchase once there. According to recent study run by Global Data, this amounted to as many as 40% of people making an additional purchase. Based on our own data, we took took a conservative estimate of 30% to estimate the additional number of customers in-store spend that in-store Click & Collect

For In-store Click & Collect we calculate: (Expected number of in-store collections * 0.3) x Expected average additional in-store purchase value = Additional Gross Revenue generated

Interested in seeing what Click & Collect could be worth to you, and downloading a more detailed breakdown of results?

Head over to our ROI Calculator to try it out for yourself!

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