Whenever we see a national retailer charging extra for something that’s either free or significantly less everywhere else, we try to alert our deal-hunting followers of the fact. An example of this was the post I did last summer on Big W’s delivery charges to Perth and their classification of even the metropolitan areas as being “regional” when it came to calculating shipping costs.
This time though it’s Target I’m taking a look at after noticing towards the end of last year that they appear to have made the decision to start charging a fee for the “privilege” of being able to click and collect in-store after purchasing online. In what appears to be some form of penalty for smaller orders, Target are now asking customers to pay $5 to prepare their orders of $25 or less for collection.
The first problem I have with this approach is that they are the only national retail chain, as far as I can tell, who charging a fee like this. All other stores like Myer, Dick Smith, Big W, Harvey Norman, The Good Guys, JB Hi Fi etc provide this service for free. Secondly, the market and demand for click and collect services would appear to be evolving and growing rapidly, so why not keep pace with these changes while at the same time keeping customers happy?
According to Julian Leach, founder of ParcelPoint – a service which allows customers to order goods online and then collect them from convenient locations (e.g chemists, video stores, newsagents and other shops open seven days a week) – 2014 is going to be the year of “click and collect” for Australia’s $14.6 billion internet shopping market. In a recent interview with The Australian, Mr Leach commented on the rapid growth of the click and collect market in the past few years in Britain where it is now said to account for almost 50% of some retailers’ total online transactions. He believes that the reason for the popularity of these services is that they allow customers to avoid having to face any issues surrounding home delivery and missed parcels.
To see the development of these services in the Australian market, all you need to do is look at companies like Woolworths who are becoming increasingly competitive and inventive in their click and collect offerings. Examples include things like Dan Murphy’s (part of the Woolworths group) text message service to notify you when your order is ready for collection, Woolies setting up a “fly and collect” service at Melbourne Airport allowing busy travellers to pick up their online grocery orders directly after stepping off the plane, as well as their setup of the first drive-thru supermarket in Warringah Mall (with no need to even step out of your car). And having to deal with the logistics of fresh produce and refrigeration is a lot more complex than the non-perishable products which Target have to worry about.
In light of the above, I can’t help but come to the conclusion that Target’s approach to this service is both short sighted and not likely to do them any favours when it comes to popularity with customers. Perhaps they’re trying to claw back revenue on their otherwise tight profit margins or maybe they simply couldn’t find an efficient way to handle the logistics of their previous click and collect operations. What ever the reason though, it seems a risky game to be playing by not getting a solution in place, as the ever-increasing competition in the online retail space means they can’t really afford to get left behind on any key service offerings.