Zara is testing pickup kiosks in Spain

BI Intelligence

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Zara is testing a click-and-collect kiosk, called CleverFlex, in one of its stores in Spain, Business Insider reports.

The kiosk is made by Cleveron, the Estonia-based company that Walmart worked with to implement its pickup towers. The tower Zara is testing can hold 4,000 packages, which is double what Walmart's kiosks can handle, and is faster than Walmart’s towers, according to Cleveron.

Zara is likely hoping to get a leg up on rivals as the fast-fashion space heats up. Retailers such as ASOS and Boohoo.com have been speeding up their apparel design and manufacturing processes. These online fast-fashion retailers can leverage their strong social media presences to keep close tabs on trending styles, and strictly control their inventories and supply chains to respond quickly to new trends, which has allowed them to cut production cycles down to as little as two weeks.

However, adding a more convenient pickup option could attract more customers to Zara, as they may choose the convenience of click-and-collect over more clothing options. Although benefits such as an expanded inventory can be attractive to consumers, most people shop online for convenience reasons — to save time, shop anytime and anywhere, etc. As such, providing a convenient click-and-collect option may be a more persuasive benefit to consumers, helping Zara fend off growing competition.

A strong omnichannel strategy can be very difficult to implement, but has been valuable to several retailers. According to a survey by JDA Software and PwC, only 10% of retailers are seeing positive returns on their omnichannel services, as many struggle with costs related to managing inventory and returns for these channels. However, retailers should devote resources to implementing a strong strategy, as omnichannel shoppers can be lucrative. For instance, Ulta found that its omnichannel customers spend 2.7 times more than in-store-only customers.

Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has laid out the case for why retailers must transition to an omnichannel fulfillment model, and the challenges complicating that transition for most companies. This omnichannel fulfillment report also detail the benefits and difficulties involved with specific omnichannel fulfillment services like click-and-collect, ship-to-store, and ship-from-store, providing examples of retailers that have experienced success and struggles with these methods. Lastly, it walks through the steps retailers need to take to optimize omnichannel fulfillment for lower costs and faster delivery times. 

Here are some of the key takeaways from the report:

• Brick-and-mortar retailers must cut delivery times and costs to meet online shoppers’ expectations of free and fast shipping.
• Omnichannel fulfillment services can help retailers achieve that goal while also keeping their stores relevant. 
• However, few retailers have mastered these services, which has led to increasing shipping costs eating into their profit margins.
• In order to optimize costs and realize the full benefits of these omnichannel services, retailers must undertake costly and time-consuming transformations of their logistics, inventory, and store systems and operations.

 In full, the report:

• Details the benefits of omnichannel services like click-and-collect and ship-from-store, including lowering delivery times and costs, and driving in-store traffic and sales.
• Provides examples of the successes and struggles various retailers have experienced with omnichannel delivery.
• Explains why retailers are having trouble managing costs with their omnichannel fulfillment efforts, which are eating into their profits.
• Lays out what steps retailers need to take to optimize costs for their omnichannel operations by placing inventory where it best meets customer demand.

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