Delivery has been the platform arguably making bigger waves in the world of consumer convenience, but the opportunities around click and collect should not be ignored. Georgi Gyton looks at the prospects for growth, what trends are being seen by operators, and how the entry of Deliveroo to the arena might change the game. Featuring commentary from McDonald’s, Tortilla, K10, Chop’d and HOP Vietnamese.

The words ‘click and collect’ have long been associated with traditional retail outlets but the sales platform is becoming an increasing part of many food to go and traditional restaurants’ revenue streams, and looks set to grow.

While many operators have offered some kind of click and collect service for years – and the option to collect a takeaway is nothing new – it has become an area of increasing focus in recent months, fuelled by developments in technology.

Approaches to click and collect across the sector range from Greggs’ trail with Preoday, launched last September, Prezzo teaming up with Orderswift and Toby Carvery launching its Toby Takeaway option to Darwin & Wallace experimenting with a chicken-focused offer called Cluck and Collect. And now Deliveroo is getting in on the act, with plans to launch a click and collect option across thousands of restaurants this year, as part of its wider expansion plans in 2019.

The ability for consumers to click and collect an order via an app has enabled businesses to add another string to their bow of convenient choices, and it obviously has the potential to drive incremental sales, but what is the scope for growth?

Richard Morris, chief executive of Tortilla, says he is hopeful that click and collect will become a bigger part of its business than it is currently. “It’s a great way to get people in without using Deliveroo – they are not being charged for delivery and we are not being charged a commission,” he says.

At its Baby Tortilla site, which is set up for the delivery (with around 35-40% of sales coming from these orders), online pick-up currently makes up less than 5% of sales. While it’s not growing at anything like the pace that the delivery market did from a standing start four or five years ago, it is increasing, he says.

“Our view is that when things (in the economy) get slightly tighter, consumers will look at this option. The costs associated with delivery seem to be going up – restaurants who operate on the platform are charging a higher price versus in their restaurants, and delivery charges seem to be increasing – so what previously looked like a good deal is starting to look quite expensive,” he suggests.

While Tortilla has always operated a click and collect function on its website, it has been trialling click and collect with Just Eat at six of its sites, which Morris says is working well. “Will it ever take over from delivery? No, but obviously all operators want it to work because there are no costs associated with it.”

In addition to delivery and table service, McDonald’s Experience the Future platform has enabled the fast food operator to explore click and collect. “We successfully rolled it out through our mobile app, My McDonald’s, over the course of last year, and it’s now available at all of our restaurants,” says Jason Clark, SVP, chief operations officer, McDonald’s UK & Ireland.

It fits in from a convenience point of view, he says, and while it’s early days “it’s a channel that I think will grow for us as we are able to offer more convenience and a more personalised experience through the app”. “From what we have seen so far we are really pleased,” he adds.

The Deliveroo addition

Deliveroo claims it wants to bring “even more choice” to consumers, but does its move into click and collect show it is concerned about reaching a saturation point in the delivery model? The platform has yet to reveal what sort of commission rates it will be charging for click and collect.

Maurice Abboudi, director at K10 restaurants, which recently launched its own click and collect service, insists the model simply would not work if Deliveroo charged comparable commission rates to delivery.

“We simply cannot trade on high margins like that. It has to be a sensible price point. With delivery there is the potential for a higher price point on the food, but you cannot have that with click and collect,” he says. “If they are going to charge +15% on gross sales that it is untenable.”

Morris is in agreement that price will be the deciding factor when it comes to the take up of Deliveroo’s click and collect service by operators. “At the end of the day its popularity will be determined by how much the consumer is prepared to have food delivered to their front door. I don’t know what that is. Certainly in the last few years it’s seemed like no one has really cared how much it cost, but I think as time goes by people are starting to look at the price,” he says.

Operational challenges

While the downsides to click and collect appear to be few and far between, there are some operational challenges that present themselves to operators not familiar with the model. Abboudi says that a major consideration for operators is what happens with a hot food offering in particular.

“A box of sushi or a salad is fine, but with a hot meal like a burger or katsu curry, what happens if they are late collecting it – you don’t want to serve a bad product?,” he asks. In terms of the physical space, some grab and go sites are quite small, so operators need to think about where they put a separate area for people to pick up food, he adds.

The appeal of click and collect is arguably not for everyone. As Eddie Holmes, managing director of Chop’d points out: “Why would you use click and collect to buy an egg mayo sandwich from Pret?” When it’s something the customer can grab off the shelf and pay for straight away then there is always going to be a limited scope for click and collect – but then you could say the same about ordering an egg may sandwich to be delivered.

Chop’d does quite a lot of business through click and collect – it has its own app and pays 4% commission – because of the nature of the business, in that customers can build their own salad, he says. “I think it’s good for some things and not for others.” Operators also need to think about how robust the payment system is and how quick and reliable the system is – as with all tech it often promises the earth but doesn’t actually deliver, adds Holmes. The lion’s share of its click and collect orders are currently from individuals, but it is currently working on the ability to offer a sharing option on the app where orders can be pooled.

Morris says the majority of the business Tortilla does through click and collect is in its City locations – its Leadenhall Market and Bankside sites, with companies picking up group orders. “Sometimes they will use Deliveroo, but we are noticing more and more that they will order it and come and pick it up themselves,” he says.

Group ordering on click and collect is something that Paul Hopper, founder of HOP Vietnamese, believes could be the next evolution in ordering. Speaking at MCA’s recent Food to Go Conference, he said: “Traditionally it’s been seen as a single person ordering and collecting from a shop. What is really interesting in my view, which is coming, is group ordering, whereby it changes the mindset of people in an office.

“One person might do the round for everyone and then it becomes a convenience for the team not to leave the office,” he said. “That totally changes the game, and there are people bringing this to the market – that’s more exciting than the traditional model.”