Click and Collect economy booms amid rise in hybrid shopping

Click and Collect transactions will be worth £42.4 billion in 2022 – 8.4% of the UK’s total retail spending, according to research from Barclaycard.

The company’s study – ‘What’s in store for retail?’ –  focuses on retail businesses with over ten employees, and looks at the rise of ‘hybrid’ shopping.

Barclaycard surveyed 2,006 UK consumers and 600 UK senior managers in retail businesses who have at least one physical store.

Click and Collect now accounts for 40% of sales for retailers who offer the service, up from 37% a year ago.

The popularity of the service grew during the Covid-19 pandemic but, unlike pure online sales which peaked during that period, it has continued to grow post the lifting of lockdown restrictions.

The Click and Collect economy now also underpins 184,000 jobs across the industry, which equates to 7.4% of the total workforce. 41% of physical stores in the UK are now used as Click and Collect locations, with the same amount being used to process returns.

Consumers like to research products online and in-store in equal measure across a number of products, including homewares (34%), fashion (33%), accessories (31%) and garden products (28%).

24% say they can be hesitant when buying from online only brands, a figure which drops to just over one in ten when businesses also have physical stores.

Despite the increasing popularity of online shopping, there is still support for high streets. When asked whether there is a future for physical retail space, 67% of consumers agreed that there is, of whom 32% strongly agreed.

However, there is a clear demographic split: 54% of 16-24-year-olds believe in the future of the physical store, compared with 74% of over 55s.

88% of retailers feel that operating a physical store is vital to their business success. However, many are re-evaluating where their real estate is based, to make sure they occupy the most appealing destinations for consumers.

Two in five have reduced the number of stores they have in city centres, while 32% have increased their presence in retail parks. An increased presence in retail parks will likely be popular with shoppers aged over 55, a third of whom say it is their preferred location for a store.

Karen Johnson, Head of Retail and Wholesale, Barclays Corporate Banking, says: “Perhaps more than any other sector over the past two years, retail has been forced into a period of accelerated evolution.”

“The pandemic drove everyone online, and now the rising cost of living is increasing business outgoings while reducing consumer spending.”

“Encouragingly for the UK’s retail sector, however, businesses are adapting their sales models to weather these financial storms as effectively as possible. Links between digital and physical shopping are being evolved, which are opening up new opportunities and ways to generate income.”

Other findings from the ‘What’s in store for retail?’ report include:

A quarter of retailers have introduced services in-store such as beauty and grooming concessions, while 24% have partnered with another brand to share retail space, and 21% have created co-working spaces in-store.

Three in ten retailers are investing more in their data capabilities.

15% have recreated the traditional in-store experience in the metaverse.

39% of consumers want retail space to become more sustainable through more efficient energy use (e.g. turning lights off at closing), and 25% would like to see more electric vehicle charging points.