Ship from Store: An Omnichannel Fulfillment Must
Posted by Julia Morrissey on Feb 29, 2024
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For retail brands trying to unlock value from their physical store locations, herein lies the opportunity. With no signs of slowing down, retail brands can leverage their physical spaces to support ecommerce distribution and execute rapid fulfillment.
The average consumer wants two things: fast order fulfillment and convenient fulfillment options. It’s a precedent set by Amazon and driven by the convenience economy – consumers expect products and services in real-time and on-demand.
In this article, discuss ship from store and what you need to know about this omnichannel fulfillment strategy.
Ship from store refers to the retail fulfillment strategy where a brand uses its physical store locations as distribution centers for fulfilling online orders. Instead of relying solely on centralized warehouses or distribution centers, the retail brand utilizes inventory from its various brick-and-mortar stores to fulfill customer orders placed online.
Embracing the shift towards leveraging physical stores for online fulfillment is not just a strategy—it’s a necessity for staying relevant and competitive in the ever-evolving retail landscape. Retail brands that do not provide a ship from store option will find themselves at a huge competitive disadvantage. Traditional retail fulfillment models using warehouse-only fulfillment are simply no longer viable for the long term.
Below, we breakdown the key benefits of ship from store.
If inventory exists in the retail chain, there needs to be a way to get it to the customer. Your customers aren’t thinking about what is happening behind the scenes. Frankly, they probably don’t care so long as they get what they want. That’s why it’s so important to enable the sale of any item, whether at your store, another store, a warehouse, or a distribution center (DC).
One-day and two-day delivery is becoming the norm, but that is still time a product spends in transit versus in your customers’ hands. With ship from store, you have the ability to pick a fulfillment location that is closest to your customer. If you have a widely distributed physical footprint, this could mean a store is closer than your distribution center.
Distribution centers tend to be wide with inventory, but not very deep. They stock every size and color variant produced, but don’t have an infinite amount of units. On the other hand, stores usually stock products to cater to their geographic region. Stock usually reflects local trends and buying habits and is, therefore, more likely to align with what consumers want.
It is expensive to maintain inventory at a physical location, not to mention space within a store is sacred. However, you’ll never be stuck with aged inventory – which is a margin risk – if you can optimize it with the most productive products and distribute it to your online buyers.
Shipping costs are the number one consideration for online shoppers. USPS found that 51% of shoppers always choose the cheapest shipping option. But things like free shipping can be a burden to retail brands, especially in the many instances where faster delivery is also expected. You can mitigate the high costs by shipping across the fewest transit zones, especially when utilizing an order management system with automated smart routing.
Perhaps there was a merchandising mistake, or maybe demand shifted mid-season. Either way, every retailer wants to sell inventory at full price. So, how can you move products and avoid markdowns? You can do so by incorporating store inventory into your web assortment and routing from stores that are about to markdown so the margin is not lost.
Here’s an overview of the common challenges that retail brands may encounter when adopting a ship from store fulfillment model.
You’ll need to maintain real-time inventory accuracy across stores and online platforms.
The inherent discrepancies arising from in-store sales, returns, or tracking system errors necessitate robust systems for precise inventory management.
You will need an omnichannel order management solution to ensure seamless integration between online and in-store technology channels. Legacy technology will not be able to support a successful ship from store fulfillment strategy.
Adapting store layouts to accommodate fulfillment needs without disrupting the in-store shopping experience can be a logistical challenge. Efficient organization becomes essential to streamline the process, necessitating careful consideration of traffic flow, storage capacity, and accessibility for both customers and staff.
Continuous staff training is vital for maintaining high efficiency in picking and packing processes, especially during peak order periods. As technology evolves and processes are optimized, ensuring that store staff stays updated and proficient is an ongoing challenge that requires consistent investment in training programs.
You must meet customer expectations for fast and accurate delivery. Delays, errors, or communication gaps can result in customer dissatisfaction.
Ship from store isn’t without its operational considerations. Here are a few of the things you should think about to make ship from store as valuable of an omnichannel fulfillment strategy as possible.
You must have the staff to handle pick, pack, and ship activities. These employees must also be motivated to perform tasks not as directly connected to sales numbers. Fulfillment requires a different mindset than selling, so make sure you have the right store team in place to manage every aspect of the job.
Store merchandise is traditionally planned, allocated, and replenished based on historical sales. Now with store fulfillment, buy online return in-store (BORIS) and endless aisle, you’ll need to rethink your approach. There needs to be a balance between inventory for “walk-in” customers and that in which you’re fulfilling from the web.
Brands need clear inventory visibility, and it takes a well-defined process, training, diligence, and the right software.
Ship from store aligns supply with demand, but only if you have a single view of all supply sources – web, warehouses, distribution centers, other stores, and third-party suppliers – and all demand sources, including orders and carts across channels.
You will need a flexible order management system to determine the most efficient fulfillment location based on factors like proximity to the customer, stock availability, and shipping costs. With an omnichannel fulfillment solution you can adapt to changing conditions and prioritize customer satisfaction.
Who gets credit for the sale if it’s bought online but fulfilled in-store? A similar question arises at the store level when a commission is involved. You’ll need to do what’s best for your brand, but remember a sale is a sale – as long as it doesn’t go to your competitor.
Your stores will need to present direct-to-consumer shipments in the same way as a distribution center. This will likely require incremental supplies, new processes, and corporate oversight. Ensure that physical stores have the necessary supplies and staff is trained to use these materials efficiently and follow standardized packaging guidelines. Also, you’ll want to ensure you have enough physical space to be able to successfully fulfill ship from store orders.
Think like a warehouse to optimize picking and packing and make store fulfillment tasks more productive. With batch picking (also known as wave picking) associates walk through the store to pick multiple orders at once versus picking orders one at a time. Forward picking is also helpful – dedicate a special place in your backroom for commonly ordered or “hot” items to save your pickers time.
Many retail brands are already putting their physical stores at the heart of fulfillment and delivery.
NewStore customer Outdoor Voices is modernizing its customer experience in a similar way. With 99% inventory accuracy thanks to RFID labeling, the brand has a real-time view as to what items can ship from different stores. Store associates can then efficiently accept the request and fulfill the order from an iPhone, getting it out to the customer much more quickly than if a warehouse sent it or if it was fulfilled in-store via a clunky computer system.
Ship from store offers the speed and options consumers expect. Even more, it increases store productivity and inventory turns and drives store traffic through pick-up orders. Simply put, it’s a must if you want to survive today’s modern retail world.
Check out NewStore’s omnichannel store fulfillment solution.
