Omni-channel is certainly not a new concept in retail management.
In fact, it’s probably the most over-used word in the industry!
However, there’s no doubt that rapidly changing consumer behaviour and buying trends spurred on by COVID-19 have created new expectations on retailers to actually put this rhetoric into practice.
Every retailer – big or small - is having to optimise their business processes to ensure their shopping and fulfilment experiences provide new levels of convenience and consumer safety.
One way retail leaders have been encouraged to rethink their business models is with a Ship from Store fulfilment model. Whereby retailers fulfil online orders from local stores near to the customer rather than centralised warehouses (that may also be based in another state).
This type of order fulfillment transforms the role of the store from not only being a shopping location but also a virtual fulfilment hub.
The advantages of a Ship from Store strategy
There are several benefits for multi-store retailers offering a Ship From Store strategy, these include:
Faster delivery times and reduced shipping costs
Two key considerations for consumers purchasing online are the speed of delivery and the cost of shipping. They want the order delivered in the fastest time at the lowest shipping cost to them.
A Ship from Store strategy does just that. Directly shipping from a store where inventory is readily available helps dramatically reduce delivery times and even enable same day delivery. With orders being shipped from the store nearest to the customer this is often far closer than a distribution centre, reducing shipping costs.
With the right systems, this can be smartly managed whereby the local stores within a specific region are setup in a prioritisation order and your software finds the best outlet with available stock to fulfil that order.
Your inventory is optimised and always in stock
Not only does decentralising your fulfilment provide the opportunity to truly differentiate your customer experience it also has a major benefit to the performance of the individual stores.
By building up stock in your stores for online order fulfilment, this inventory can also be used to provide the stock availability for instant Click & Collect; and for shoppers that check your live stock in store whilst on your website. And, for walk in traffic, more stock is displayed and immediately available, presenting better convenience and choice to store visitors.
By offering rapid home delivery by shipping from nearby stores; in combination with live Stock In Store and instant Click & Collect, you’re providing these shoppers with the full range of choice and convenience to get the goods they want as quickly as possible.
Markdowns of store products can be greatly reduced
Using a Ship from Store strategy allows you to align the demand and needs of one location with the available inventory in another location which will reduce the need for markdowns. Because you are reducing your stock burden, you are also saving money by not letting go of the product at a much lower price. You can keep the value of the product up and move it out of your store at the same time.
Those retailers that can enable omni-channel fulfilment options while strategically balancing cost and service will drive additional profitability and meet consumer expectations.
Executing a successful Ship from Store strategy
Now that we have established the benefits of a Ship from Store strategy, how can you go about actually implementing it?
Optimise your store operations and space
If you are shipping a product from your store, it has to be picked and packed there. It also has to be done by your in-store staff, who may not have the experience doing it.
You will have to carve out dedicated workspace within your store to allow for your store associates to manage the orders including having all the right tools and equipment such as packaging material and labels.
It is essential to train your store staff on how to go about fulfilling such orders. They need to be aware of which packaging size to use, how to pack the order safely and efficiently, and when to fulfil the order.
Right systems, processes, and technology
One thing that will define success for a Ship from Store model is having the right systems, right processes, and fulfilment partners. Trying to run this manually or with basic systems that don’t cover all these areas will quickly result in frustrated customers and employees!
You need systems that can:
- Integrate your eCommerce and physical stores and enable unified inventory management processes
- Recognise the customers location and then enable you to setup a workflow to allocate stock from a list of prioritised stores within the region
- Alert store staff live at the POS that they need to fulfil the orders as they come in
- Ensure that inventory is continuously and automatically replenished to stores to meet both online and walk-in demand
- Provide real time management to ensure all locations are fulfilling orders
- Provide the opportunity to re-assign orders to alternative stores that have the available resources
- Enable your store employees to arrange shipping with couriers in a streamlined, automated way (such as The Retail Express and Shippit integration)
A competitive advantage for Bricks & Clicks retailers
There is no dip in sight for ecommerce, and the disruption caused by COVID-19 has strengthened its future. Ship from Store is going to be a long-term strategy, with many retailers already implementing it.
This is probably one of the few ways that bricks and clicks retailers have a competitive advantage over pure eCommerce players.
Now is the time for retailers to double-down on planning and designing a more robust and flexible operating model including a review of current systems and technology looking for all possible efficiency gains.
Those retailers that have embraced the latest omni-channel capabilities along with lean, agile operating models should be feeling very optimistic in this new era.
The rules of retail have changed and there is no going back. All retailers, big and small are now under pressure to deliver omni-channel shopping experiences and fulfilment processes that meet new customer expectations for safety and convenience.
To help retail leaders plan for success, we have created a free Omni-Channel Leaders Academy comprising a full library of video content covering the latest best practices in omni-channel retail. Get instant free access today!