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Essential Retail's View from the Top is a regular series of interviews with executives operating at the heart of the retail technology industry. This week, the focus of the feature is Neil Ashworth, CEO of third-party click & collect network, CollectPlus.
Shopping centres could become the delivery hubs of the future but the UK retail property sector and the wider industry must shift their way of thinking to open up further trading opportunities that meet today's customers' requirements.
That is the view of Neil Ashworth, one of the founding fathers of Tesco Direct and current CEO of third-party click & collect network CollectPlus, who says the typical retailing model comprising a workshop at the front and a stock room at the back has not really evolved much over the last 350 years. He told Essential Retail that one of the limiting factors to today's shopping experience is logistics capability, and suggested more can be done to use the UK's major shopping destinations as part of the retail fulfilment network.
"Shopping centres by their very nature are great for access and great for getting deliveries in and out – they have extensive footprints and they could become local delivery hubs of the future," Ashworth argued.
"What if we moved all the stock rooms in shopping centres to a single place adjacent to the car park so the customer could browse the stores, try on products and get things delivered to their car? All of the inventory can be used for immediate fulfilment or [online] customers living locally who want a quick delivery."
Some of Ashworth's comments are meant as a provocation to the UK retail property industry, in an attempt to insert some new thinking into British retailing strategy, in particular the high footfall areas such as shopping centres and out-of-town destination retail hubs. Ashworth, who took over from John Lewis-bound Mark Lewis as CEO of CollectPlus three years ago, says the property industry is often so focused on yields and the general economics of the shopping complex that it can lose sight of end-customers' needs.
"In my opinion they don't spend enough time thinking about what consumers are doing, where they are going, how they are living their lives, how they are behaving and, therefore, considering if the existing model the most appropriate model for the future?
"We've operated with the same model for several hundred years, and maybe it's time for a change."
Such a move would be driven by the mounting challenge retailers are facing regarding the economics of online retail. It is no secret that serving customers with a home delivery proposition can have a seriously negative impact on bottom-line figures, but with a growing number of people now opting to choose eCommerce as part of their shopping journey retailers need to assess how they can serve customers in a suitable – but profitable – manner.
As a result, a trend towards distributed order management and serving online sales with store stock is occurring across the different sectors of retail. This publication often speaks to retailers who cite creating a single view of stock inventory as a key pillar of their next stage of development, and some businesses are making progress in reaching these targets.
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Ashworth predicts this will continue to be a central strategy in coming years.
"Retailers are very efficient at getting product to store, so why don't we use that to fulfil online demand?"
"There will be a significant change and growth in the number of retailers who are actually deploying their in-store inventory to online sales over the course of the next five years to really get a grip on the economics of this."
CollectPlus itself is creating a presence in a greater number of shopping centres, which represents a step change from the business's original strategy when it first arrived on the scene in 2009. Operating service desks for online order collection and returns in these high footfall locations around the UK is viewed as an important part of the business's aim to fit in with shoppers' daily lives.
Having launched as a third-party click & collect service, allowing customers to pick up their online orders from a range of retailers at local newsagents, garages and convenience stores, CollectPlus now has a network of over 6,000 pick-up and drop-off points throughout the country, including more than 30 shopping centres.
It is attracting new users, too, with more than 400,000 people using the service for the first time in the final quarter and busiest shopping period of 2015. Last December's CollectPlus usage alone was up by 15% year on year, buoyed by consumers' increasing willingness to shop this way and a raft of new retailer partners joining the network.
Recent work by the CollectPlus team to evolve its proposition centres on the development of IT solutions, and this has resulted in mobile barcodes replacing the paperwork previously required when collecting goods. In fact, the business has developed a range of mobile applications to remove other paperwork in the process.
In beta test mode at the moment is the option for shoppers to print labels at CollectPlus points around the country, and Ashworth cites eBay sellers as a target market for this type of service as "not everyone has a printer these days – particularly the younger seller".
"If the customer gets a good fulfilment experience they are more likely to shop with that retailer again," he added.
CollectPlus requests customer feedback every time its service is used, and this helps the company monitor the levels of customer experience by store. Ashworth suggested that some of this internal data may even be shared publically in the future if they can devise the right format. This would potentially expose the store ratings on the main CollectPlus website and give customers more transparency into previous shoppers' experiences of the service.
Ashworth acknowledged that the customer fulfilment part of retail is attracting a lot of attention right now, in terms of the new options available for picking up and dropping off products and the fact many retailers are placing it at the forefront of their improvement planning. This area of retail even has its own acronym, PUDO, or the pick-up, drop-off sector.
The CollectPlus CEO suggested, in the early days of online retailing, companies involved in eCommerce put the majority of their focus on developing very strong front-end capabilities, getting the descriptions right and creating hierarchy taxonomies, arguably at the expense of establishing a robust back-end.
"Customers took control of the front end and now they've taken control of the back end – they want a service that is suited to their lifestyle needs," he explained.
"I think what we are seeing in the market is a natural progression. Retailers set up their own click & collect operations – it's not a new idea but it is something that's accelerated as people's lifestyles have changed and people have become busier and need a range of options to fit those lifestyles."
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