Retail · Home improvement
Click and collect was subsidizing the delivery it replaced.
This marketing & margin audit surfaced $54k in recurring annual margin in a Retail business, evidenced, senior reviewed, and delivered in 6 days.
The business
A home improvement retailer offered free click and collect, on the reasoning that it removed the cost of home delivery. It became a popular fulfillment option and was treated internally as a margin friendly alternative to shipping, so the actual in store cost of picking, staging and handling collection orders was never rebuilt against that assumption.
What triggered the audit
Fulfillment margin didn’t improve as click and collect grew, which contradicted the belief that it was cheaper than delivery. The audit rebuilt the true cost of a collection order, the labor to pick, stage and hand it over, and compared it against both home delivery and the assumption that collect was effectively free.
What the audit found
Click and collect wasn’t the free alternative everyone assumed. Each collection order still consumed real store labor: staff picking items from shelves, staging them, managing the collection point and handling the customer at pickup. Costs that were simply invisible because they were absorbed into general store payroll rather than charged to fulfillment. In practice, for many order types the fully loaded cost of collect approached or matched the delivery it was supposed to replace, so the shift to collect wasn’t improving fulfillment margin the way the model claimed. Because the labor sat in store payroll and was never attributed to the orders, the subsidy stayed hidden while the channel grew. Rebuilt honestly, the mis costed fulfillment was worth roughly $54k a year.
What we changed
Rebuilt the true fully loaded cost of click and collect, attributing the pick, stage and handover labor to the collection orders that actually generate it.
Repriced or set minimums on the collection order types whose real cost approached the home delivery they were supposed to replace.
Streamlined the picking and staging workflow to cut the store labor that was driving the hidden cost of the collect channel.
Made fulfillment margin by method a monitored metric, so the collect subsidy can’t quietly reopen as collection volumes grow.
The result
The published chart shows click and collect fulfillment margin moving from −2% to +5%, a 7 percentage point increase, after store picking, staging and handling labor was included. The recognized labor cost and any later operational improvement are separate effects. $54k a year recovered by costing click and collect honestly instead of assuming it was free, an annual figure equal to 9× the $5,950 Audit + Sprint fee. For any omnichannel retailer, the assumption is the leak: collect still consumes store labor that hides in general payroll, so a “margin friendly” option can quietly match the delivery it replaced. If you’ve never rebuilt the fully loaded cost of collect, it may not be saving what you think. A fixed fee audit rebuilds it in days, before the channel scales the subsidy.
From kickoff to signed off findings: 6 days, inside our fixed 5–7 day window.
What the client said
$54k a year found in 6 days
Fulfillment margin on click and collect orders: −2% → +5%
“Click and collect was never free. David rebuilt the cost of a collection order, the picking, staging and handover labor hiding in store payroll, and on many order types it matched the delivery it replaced. We repriced those.”
David JacksonSenior Auditor · signed this audit off