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Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

It’s back to store for etailers as online shopping collection points get physical.

On August 12, Craig Woolford, consumer sector retail research analyst at Citi drew attention to recent strength in apparel sales at specialty stores. Sales grew by 9.4 per cent in the first half of 2014 on a year-over-year basis.

Woolford identified four reasons for the recovery in specialty apparel, one of which was "fatigue with the short-comings of online shopping". Woolford's observation about ecommerce is supported by some eye-catching data − the most recent NAB Online Retail Index Report put ecommerce growth at 6.4 per cent in the year through April, while admitting with quite spectacular understatement that this was "much more subdued" than the 20-30 per cent growth rates to which we had become accustomed.

the collection bar retail store

Unhappy returns

One of the short-comings of fashion e-commerce in Australia − to which Woolford might have been referring − is the problem of returns, specifically, how to make it dead easy for shoppers to return products so they are not reluctant to make the purchase in the first place. Although virtual reality technology is making fantastic strides in helping online fashion shoppers make the right choices of fit and style, at the end of the day there is really only one way to know if you want the merchandise and that's to try it on.

Omnichannel retailers can address this issue more effectively than online-only retailers because the customer increasingly has the option of ordering online and then picking the item up in the store. If the customer wants to return it, then the better retailers allow the return to be made to the store as well, eliminating the hassle of repackaging the unwanted item and mailing it back to the warehouse.

No stores? How about faux stores?

If you are an e-commerce retailer only, it isn't possible to offer this convenience. Unless, of course, you can piggyback on a bricks-and-mortar entity that has a chain of convenient locations for your customers to use as pick-up and return points; this is where ParcelPoint comes in.

ParcelPoint is an online delivery platform that has partnered with more than 1300 bricks-and-mortar locations to give e-commerce shoppers an alternative to home delivery. The locations include pharmacy chains, convenience stores and other entities that tend to be open late and on weekends. The delivery points also act as points of return, although customers still have to handle the repackaging and labelling of the merchandise.

ParcelPoint has now taken its model to the next level. The Collection Bar, a collaboration between ParcelPoint, online fashion retailer The Iconic and Sydney’s Broadway Shopping Centre that launched in June. The arrangement offers customers not just a convenient place to pick up their online purchases, but also dedicated dressing rooms to try the merchandise on. Then if they don’t like it or it doesn’t fit, they can hand it back to the dedicated staff member who handles the nitty gritty of returning it to the retailer.

Something’s in it for everyone

The benefit of this arrangement for the retailer and the customer is pretty clear. But what’s in it for the shopping centre? On the surface of it, this looks a bit like the fox being handed the keys to the chicken house. But it’s also conducive for the centre to get incremental shoppers who will make an impulse buy at a store or have a bite to eat while they are picking up their online purchases.

Julian Leach, ParcelPoint’s commercial director and co-founder, says “our research shows that 34 per cent of the people who pick up a parcel at one of our locations also make a purchase there.”

If the experiment works for The Collection Bar Broadway, it could be rolled out to other shopping centres. Measuring the true benefit to the shopping centre will not be as easy as it looks, and it will take time. But if the idea turns out to have legs, one of the main bugbears that get in the way of online shopping will become a little less important.

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