Click & collect solves last-mile delivery problem for retailers

Christopher Tredger
By Christopher Tredger, Portals editor
Johannesburg, 25 Apr 2023

More South Africans will buy into the idea of ordering online and then picking up their order from a designated point.

So claims Cape Town-based click & collect specialist Pargo, who point to the impact this model has had in overseas markets like the UK.

Some 20 years ago, British retailer Argos pioneered a new delivery method that allowed customers to order goods online and collect them from a designated pickup point. "Today we know this as click & collect, and it has become a global phenomenon. The service is used by 40% of customers in the UK, where more than 41% of physical stores are now used as click & collect locations, according to research by Barclays,” says Pargo.

The company adds that the numbers are similar in Australia, where three in every 10 people make use of this option. Notably, the 2022 Global Digital Playbook Australia Edition found that four in every 10 click & collect shoppers ended up buying more items when they went to the store to pick up their orders.

Pargo started in South Africa in 2015 and to date has over 3 500 pickup points countrywide.

The tech startup says it recognised early on "the need for a delivery service that catered to all citizens, not only those living in better-off neighbourhoods.”

Pargo estimates that its collection points now cover 87% of the country’s postal codes, and 45% of the company’s customer base lies within township and rural areas. Pargo Pickup Points are located in convenience stores across the country, including Freshstop at Caltex, selected Spar store, Clicks and Lewis stores. Other ajor retailers that use their tech include Woolworths, Edgars, The Foschini Group, Cape Union Mart and Mr Price Group.

Pargo co-founder Lars Veul says: “We have found that technology and digital literacy is not holding the township and rural markets back when it comes to accessing ecommerce… Last mile delivery is a critical factor in unlocking access to ecommerce, not only for shoppers, but for small business owners as well. There are many businesses within the township and rural market with a huge opportunity to grow.”

Tech investment

Pargo has implemented a customisable API, and has established channels including Shopify and Woocommerce plugins, along with an investment in software and platforms to engage customers.

Veul adds, “Our plugins take three minutes or less to install and configure - which means you can offer customers convenient click & collect delivery from nearly 4 000 pickup points across the country, within five minutes of signing up with Pargo. Our Pickup Point in-store application used by Pickup Point staff is an Android application built with stability and an intuitive user experience journey to ensure a seamless, hassle-free parcel collection and drop off experience. The application requires no updating or configuration, this all happens from our side, limiting disruptions at store level.”

The company’s in-house team of engineers and developers has also built a parcel management system called myPargo, a web application that enables Pargo to integrate directly with an e-commerce store, no matter which platform their store is built on.

Veul said the reasons the company invested in its own software and platforms is to ensure customisation, integration and scalability.

“As businesses and the industry grow, the needs of our partners will likely become more complex. We can ensure that it is scalable and can handle the increased volume of parcels and data that comes with growth. This helps us avoid the need to switch to a new platform down the line, which can become complicated, challenging and time-consuming.”

The total global e-commerce sales are expected to top US$8.1-trillion (R146-trillion) by 2026.

“A large percentage of that amount will be down to more people selling wares via social media platforms,” says Veul. Since most of these traders fall into the small and medium-size business category, they will look to click & collect as a more cost-effective last-mile delivery option, both for themselves and for consumers.”