The French Connection: Learnings on Click and Collect

By Mark Baum, Chief Collaboration Officer, Food Marketing Institute 

The “click-and-collect” market in the U.S. is relatively nascent, and a handful of FMI members, namely Walmart, Harris Teeter and Kroger, have introduced click-and-collect offers for their consumers in test regions.

Comparatively, with more than 3,125 click-and-collect operations, France arguably has the most mature click-and-collect business model. The case study of France suggests that there are two primary operating models: Warehouse picking and in-store picking. While warehouse picking requires initial investment of about €2.5M per location, labor costs are significantly lower than those of in-store picking. Notably, picking productivity in a warehouse is nearly three times that of in-store selection.

So what are the implications and opportunities for the U.S. food marketplace? France’s evolution around click-and-collect retail offers three valuable lessons for U.S. food retailers looking to explore click-and-collect operating models:

1. Build a sustainable business model that is not EBIT-dilutive, taking into account that increased competition often evens out the playing field;
2. Create new revenue streams in order to offset higher operational or capital expenditures – you are providing a service to your customers, so capture its value; and
3. Anticipate the impact on in-store sales and on your overall retail network.

Like many in food retail, I’m looking globally for inspiration, but there’s no truth to suggest that food retailing is a game of cat and mouse with Europe.  It’s universally apparent that our supply chain needs to transform and adapt to today’s new consumer. New business models will provide greater effectiveness in terms of big data analysis, inventory reduction and on-shelf availability, all while improving speed to shelf and service levels. Click-and-collect models are just another channel to connect with today’s busy shopper.

What is FMI doing to help its members explore click-and-collect possibilities? FMI is ensuring its unique gathering for all things food retail, FMI Connect, offers opportunities for understanding new competition and consumer engagement strategies including emerging models like click-and-collect.