Retailers today are contending with some of the most uncertain economic conditions in a generation. Consistently high interest rates and inflation are putting pressure on business budgets while, at the same time, cost-of-living pressures are making consumers more cautious in their spending.

Shippit data – based on millions of online purchases from thousands of retailers including Sephora, Target, Myer, Cotton On, BIG W, Kmart, Chemist Warehouse, Temple & Webster and Coles – reveals that Aussies made fewer purchases and spent less per purchase in June 2023 compared to June 2022.

So with consumer spending down and operating costs – like rent, wages, stock and deliveries – increasing, retailers must focus more than ever on ‘cost control’. When successful and strategic, cost control can give your business the foundation to pursue long-term growth and mitigate short-term risk.

As eCommcerce booms and delivery continues to become the next frontier in retail, there are many ways to control costs in the delivery process. One of those is ‘click and collect’ which allows customers to purchase products online and collect them from a physical store. But what is cost control? And how can retailers use click and collect to improve their customer experience and control their costs?

What is cost control?

Before understanding how click and collect can help you control costs, it’s important to understand what cost control is and why it’s important. Cost control is the practice through which businesses identify and reduce expenses to increase profits. There is no one-size-fits-all strategy to control costs, but a combination of different approaches and strategies.

For example it could be sourcing alternate materials, investigating different suppliers, using technology to automate previously time-consuming human tasks, or any one of countless other tactics. Click and collect is one of those methods, allowing retailers to deploy more cost-effective delivery options. Its benefits are more than just cost control, though; it’s an increasingly popular option for consumers, with Shippit data showing that 72% Australians placed a click and collect order last year. So how can it help retailers control costs?

Reducing delivery costs

When it comes to getting products from a store or warehouse to the customer’s doorstep, logistics can be both complex and costly, especially during the last step of the journey. Click and collect is a cost effective delivery option for both a retailer and the consumer- and is easy to integrate into a retailer’s shopping cart. Without a delivery, click and collect keeps costs low for both retailers and their customers, because it circumnavigates costs like transportation and additional packaging.

It’s a great way to improve customer experience, for example by offering more flexibility and convenience. Ultimately, customer experience increases retention and loyalty, because shoppers will return for experiences and brands that impress them. Loyalty is worth its weight in gold, especially today, and is one the most effective ways for retailers to mitigate risks. So click and collect can reduce costs immediately, and help retailers boost revenue and loyalty in the medium- to long-term too.

Upselling and increased foot traffic

Cost control isn’t purely about cutting costs, it is also about identifying ways to increase your revenue and boost your customer lifetime value. After all, the stronger your customer retention and upselling, the less you have to control costs. One of the most impactful benefits of click and collect is the increased foot traffic to your physical store, presenting a golden opportunity for upselling.

Customers tend to be more inclined to make impulse purchases when they visit a physical store compared to when they shop online. So this provides an opportunity to drive additional revenue, on top of the products they already purchased online.

Running a business is difficult, especially today with economic pressures intensifying. Effective cost control is essential in enabling retailers to overcome short-term challenges without compromising long-term growth. Click and collect can be a hugely impactful way of improving customer experience and controlling costs. So if it’s valuable for your customers and it’s valuable for your business, the new financial year could be the opportune time to invest in your click and collect capabilities, and by extension invest in your business.

Rob Hango-Zada is co-founder and co-CEO of Shippit.