Online sales again flattered the numbers, growing by a fifth. But of most interest were click-and-collect sales, which increased by 16 per cent over the period. This delivery method enables customers to order their product online and then pick it up from their preferred John Lewis or Waitrose outlet, or pay extra to pick it up from a local Collect+ store. Such has been the take-up of this delivery method that even a £2 charge introduced last year on the bog standard service, which is levied on orders below £30, has not stopped a customer surge for convenience. So much so that these sales now account for half of John Lewis's online orders. For Debenhams (DEB), click-and-collect penetration briefly hit 46 per cent before Christmas, underpinning a strong trading statement on Tuesday that drove shares up a fifth.
Now consider this month's big news: Sainsbury's (SBRY) is pursuing Home Retail Group (HOME). Setting aside Homebase, which the grocer sold as recently as 2000, investors have been questioning what its management sees in Argos. Eyes have settled on the latter's distribution: the catalogue retailer has been working hard for the past two years on its infrastructure and the accompanying customer interface. The word from management and analysts suggests Sainsbury's is pre-empting competition here, that online marketplace Amazon (US:AMZN) will soon bring to the UK its full stateside groceries service. It is already trialling food delivery in London and Birmingham. This offers next-day and early morning delivery of fresh groceries, food from local restaurants, as well as your typical purchases. Right now in the UK, regular parcels can be collected at a range pick-up points.
At Argos, the traditional route used to start with what comedian Bill Bailey calls the "laminated book of dreams", the in-store directory, proceeding to the counter to pay for and collect the goods, assuming they were in stock. Now customers can buy one of the 20,000 products online and collect it from a fast-track counter at their local store. Readers may also have noticed Argos click-and-collect stations embedded at tube stations, or concessions in larger Sainsbury's stores.
But promising almost everything, almost anywhere, can set you up for a fall, especially for retailers that have built longstanding relationships with their customers. "Click and collect nightmare for shoppers" was the headline on an AOL Money story posted earlier this month, gathering complaints on such services offered by John Lewis, Argos and Tesco. A brief look at the John Lewis Facebook page finds such an example - a customer who found one of two products under the same order number had been sent back to the warehouse, and eventually had to settle for a refund as the item had sold out. "[I] am always a fond and loyal customer of John Lewis, but [this experience] leaves a bad taste in my mouth," she wrote.
There are some consumer data to back up the anecdotes, published this month in a consumer report by supply chain management services provider JDA and software company Centiro. More than a third of the 2,000 online shoppers surveyed who used click and collect this Christmas experienced problems with their order. The main gripes of these customers were long waiting times, the lack of a dedicated click-and-collect area and staff being unable to find items. Clearly, not everything works: both Sainsbury's and Tesco (TSCO) recently ditched a scheme allowing London commuters to pick up their groceries at tube stations, after consumers preferred to pick up at stores.
Trading statements from Sainsbury's and Home Retail Group arrived too late for this article. If the grocer has suffered since the bid was revealed, perhaps investors are unsure about its strategy. Does Sainsbury's hope to be a one-stop, digital-first shop for food and household products: in other words, playing John Lewis to counter Amazon? Expect many more trials and distribution models before the dust settles - even our friend on the moon may find there is a handy pick-up point just around the next lunar crater.
