by Camille Chin | April 21, 2021
It was this time last year when non-essential stores locked their doors to shoppers. No foot traffic meant that a lot of in-store merchandise became stale. For retailers that already had BOPIS (buy online, pickup in store) or BOPAC (buy online, pickup at curbside) capabilities in place pre-pandemic, they were able to continue selling as normal. Brands that had a ship-from-store (SFS) strategy could also continue selling store stock in online sales.
There are many benefits to using stock from your brick-and-mortar stores to fulfill omnichannel orders. By fulfilling and shipping orders from neighbourhood stores rather than a distribution centre (DC) that is potentially hours away, your business’ transportation costs are significantly reduced. Shorter shipments across a single carrier zone get your product into your shoppers’ hands faster. Accelerated deliveries are huge when retailers are dealing with increased customer delivery expectations and competing with the likes of Amazon Prime.
Satisfying demand by leveraging in-store inventory that may otherwise sit unsold also means that your business will see a reduction in in-store markdowns. Consider, for example, shipping a full-priced item from a local store close to your customer; this shipment only incurs a single-zone carrier fee, which is far more profitable than shipping a sale item from a DC that’s further away.
Dark Stores: A New Light in Retail
A ship-from-store strategy can be implemented in dark stores too. “Dark stores” are retail stores that are currently functioning as mini omnichannel fulfillment centres because they are temporarily closed to foot traffic. Bed Bath & Beyond is one retailer achieving gains from the ship-from-store model. The company converted 25% of its stores in the U.S. and Canada into fulfillment centres last year. The retailer shipped 36% of its online orders from stores in 2020’s Q2.
Many dark stores emerged during the COVID-19 pandemic as a temporary solution, but now small omnichannel fulfillment centres where online orders are being packed for pickup or shipped out for delivery have found a home as popular, permanent fixtures in densely populated areas. These mini fulfillment centres shorten delivery times and promote a better customer experience with quicker access to goods.
Experts have recognized that dark stores aren’t going anywhere. “Every chain in the world will be doing this in the future,” Ken Morris, Managing Partner at Cambridge Retail Advisors, recently told Fast Company magazine. “And the future is now because COVID-19 has pushed the timeline up for a number of these kinds of initiatives.”
Tips for Making a Ship-from-Store Strategy a Success
Only 40% of consumers say they plan to shop for apparel in physical stores either the same amount or less after being vaccinated. To keep your brick-and-mortar stores from becoming a blemish in your supply chain strategy, consider implementing a ship-from-store strategy in some stores keeping them relevant and profitable. Here are five factors to keep in mind when implementing ship-from-store services.
1. Location and Space
Consider implementing ship-from-store services at the stores that are closest to your best customers. Remember that aisles and backrooms will have to be converted into mini DCs so make sure there is enough space to do so without sacrificing too much selling space. A dedicated section where employees can pick and pack online orders will prevent cross-selling and confusion over which products are still available for sale in the store and which ones have been sold.
2. Employee Training
Stores will need associates to service customers and others to manage in-store operations, including order fulfillment. Don’t discount employee training. An associate’s primary responsibility is to take care of the customer, whether in-store or online. A hand-written “Thank you!” in an order is a simple, personal touch. Pick Carts should match the aesthetic of the store and in-store customers should not be negatively impacted by online fulfillment.
Note: Don’t try to tackle express orders. These accelerated orders should still be fulfilled at a DC. Online shoppers pay a premium for express deliveries and a warehouse can better meet the commitment required. Stores can be easily overwhelmed with foot traffic and in-store customers should always be prioritized over online orders.
3. Software
A ship-from-store strategy requires complete visibility of your enterprise inventory and cross-channel orders — a feat only accomplished with an efficient tech stack. A cloud Unified Commerce platform will ensure that your Order Management System and Point-of-Sale system are synced and getting the same online order details in real time. A cloud Unified Commerce platform will also seamlessly update inventory numbers throughout your ERP.
CRM software is also important as it analyzes enterprise-wide transactions and exposes the hidden connections between your customers, merchandise and shopping channels. Equipped with keen and discerning insights into customer habits, your brand can create more relevant marketing material that will better connect with your shoppers, boosting engagement and ultimately sales.
Learn more about Jesta I.S.’s cloud Unified Commerce platform. Not ready to lift-and-shift all of your existing technology? Jesta I.S.’s Vision Store & Omnichannel can be seamlessly integrated with your current ERP to drive your ship-from-store strategy.
A multi-carrier shipping software will facilitate rate shopping, comparing thousands of carriers and services to identify the best shipping option for every order, and allowing you to save on shipping costs and avoid risky capacity constraints. A multi-carrier shipping solution helps meet and exceed customer shipping expectations by simplifying the packing process, and creating and printing carrier-certified labels at stores leading to more orders on the truck faster.
Learn more about ProShip Multi-Carrier Shipping Software. Need help connecting the dots on your ship-from-store strategy? Jesta’s Warehouse Management System, ERP and Order Management System are seamlessly integrated with ProShip Multi-Carrier Shipping Software to simplify ship-from-store.
4. Carriers
The past year has proved that your business should use a variety of carriers, including smaller ones. Local, regional and national carriers will provide a mix of delivery options and capabilities. Smaller, local carriers can typically move orders 80 to 100 miles within a specified zone. They often provide more personalized service so they’re great for shipping local orders from neighborhood stores as a part of your ship-from-store strategy.
5. Returns
Consumers expect free and easy returns, and if they don’t like your return policy, they’ll take their business elsewhere. Determine if you want orders fulfilled in-store to be returned in person and/or by mail to both stores and distribution centers. Ensure your brand’s policy is clear on your website.
Online shopping is growing in popularity and retailers need to be sure they’re optimizing their strategy for the future. Carefully weigh the costs and benefits of a ship-from-store strategy including recognizing that now is the time to re-evaluate your current operations and efficiencies (or inefficiencies). With good planning and the proper tools and technology, you can use a ship-from-store strategy to reap the rewards, turning your stores into assets and ultimately improving sales and enhancing the customer experience along the way.
Interested in learning more or ready to launch your omnichannel transformation? Send an email to marketing@jestais.com to schedule a chat with a Subject Matter Expert.
