How Retail Fulfilment Can Drive Growth

Fulfilment is no longer about efficiency; it’s about differentiation.

Same day delivery options will soon change from being a source of differentiation to a standard customer expectation.

Nowadays, the time customers are willing to wait for delivery has significantly dropped from less than a week to under two days. Same-day delivery options will soon change from being a source of differentiation to a standard customer expectation. In addition, the demand for what we want and when we want it needs to be done with minimal impact on the environment.

Customers expect multiple delivery options in store and online.

Store

  • Free home delivery (with online tracking and date rescheduling)
  • Inter-store transfer
  • Online ordering (if the stock is unavailable in-store)

Online

  • Fast and convenient delivery
  • Free delivery over a certain threshold
  • Click & Collect
  • Delivery to third-party collection points (such as Australia Post, ParcelPoint and Hubbed)
  • Vendor backorder and drop ship

To increase the efficiency and speed of delivery, Informed Retailers are using two fulfilment models:

Virtual Warehouses

Using stores as virtual warehouses, retailers can gain more control over orders and inventory. Where multiple store store locations are involved, Informed Retailers use systems to determine the ideal store that an order gets fulfilled from.

This system takes into account location, stock levels, planned promotions, projected sales, staffing and pickup frequency, in turn fulfilling orders faster and cheaper with fewer errors.

Warehouse, Hub & Spoke Model

For most multi-store retailers, the next evolution from virtual warehousing is a Warehouse, Hub & Spoke model.

For this model, the warehouse sends goods to stores (all hubs and spokes), however, hub-stores retain the majority of the stock based on geographic proximity to central customer locations. Hub-stores also have Spoke-stores in close proximity, to be able to ship an item to the customer via the Spoke-store within 2 to 3 hours for Click and Collect or same day delivery.

Informed Retailers also use A-B-C based performance analysis of different store locations to ensure the best performing stores get priority access to inventory.

Score your business in each of the critical areas of practice to identify strengths, weaknesses and potential blind spots.

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