Staying ahead of the curve is essential for retailers to achieve success in today's retail environment. With the rising customer expectations for faster fulfillment of online orders, retailers are increasingly turning to omnichannel strategies like Ship From Store and Buy Online Pick-Up In Store (BOPIS) to meet these demands.
In our recent podcast with Nate Skiver, we explored the intricacies of implementing one such strategy in retail, the “Ship From Store” strategy. Ship From Store allows retailers to leverage their physical stores as mini-warehouses and fulfill online orders at a much faster rate. Furthermore, this approach helps retailers in minimizing the transit time and the overall associated cost of delivering the item to the customer’s address.
Let’s dive deeper into why leading retailers are embracing this omnichannel approach to enhance customer experience and drive business growth.
Understanding the term “Ship From Store”
Ship From Store is a retail fulfillment approach where online orders are processed and dispatched directly from a physical retail outlet rather than a centralized warehouse. When a customer places an order online, the retailer's system intelligently identifies the closest store with the required inventory and seamlessly initiates the fulfillment process from that specific location. Store staff then pick, pack, and ship the items to be delivered to the customer's designated address.
This strategy presents numerous advantages. Firstly, it enables retailers to provide swifter delivery options by leveraging their network of stores, thereby reducing transit times and associated shipping costs. Secondly, it eliminates the need for separate inventory allocations for online and in-store sales, resulting in more efficient inventory management practices and decreased markdowns.
Ultimately, Ship From Store significantly enhances customer satisfaction levels by offering expedited delivery services while simultaneously expanding the retailer's fulfillment capabilities.
Challenges with the Ship From Store strategy
Using physical stores as fulfillment centers can accelerate the fulfillment of online orders and enhance customer experience by providing same-day or next-day delivery. However, there are certain challenges which can arise while this strategy, such as:
1. Inventory management complexities
Retailers would need to maintain a sufficient level of inventory at physical stores, to meet the demand of in-store shoppers while having enough stock to fulfill online orders. This would require real-time inventory visibility across all store locations, along with the data of stock that has already been allocated to online orders. Furthermore, in certain cases where a particular variant or a product is running out-of-stock due to rapid in-store sales, store associates won’t be able to fulfill a Ship From Store order for that product or variant, leading to a situation of unfulfilled orders and customer dissatisfaction.
2. Resistance by store associates
Store associates face the challenge of juggling priorities to meet the demands of both in-store shoppers and online customers. For instance, some associates would want to focus on assisting walk-in customers rather than spending time on fulfilling Ship From Store orders. This resistance is primarily fueled by the concerns of losing out on commissions and incentives tied with in-store sales, which store associates might lose if they prioritize online orders over offline orders. Without proper training to balance multiple orders, there's a risk of delays in order fulfillment which would ultimately lead to a negative customer experience.
3. Shipping logistics and coordination
Relying solely on one shipping carrier can pose a challenge for retailers, not only for store fulfillment initiatives but also for traditional warehouse-to-customer shipments. While it simplifies logistics, it's prone to disruptions or carrier specific delays that could affect both types of shipment. Moreover, by negotiating competitive rates with just one carrier, retailers may miss out on cost-saving opportunities with alternative options. Saying that, just having multiple carriers is not going to solve the issue, as each carrier will have different schedules and service levels which would require real-time monitoring and effective communication to avoid more complexity.
4. Maintaining varied customer demands
Ensuring customer satisfaction is crucial for any business, however, challenges could arise when catering to diverse shipping requirements. For instance, fragile items demand delicate handling, while oversized products can strain the resources for shipping carriers. Not all stores and carriers are equipped to handle these varied needs, moreover, it adds more complexity in the packing process for associates to ensure that items are properly protected during transit. Additionally, products with specific delivery deadlines, such as perishables or urgent orders necessitate specialized attention for prompt arrival. Therefore, balancing these factors while maintaining customer satisfaction becomes a make-it or break-it for retailers.
How to overcome the Ship From Store challenges
1. Efficient inventory management
Leveraging Omnichannel Order Management Systems (OMS) can provide businesses with real-time inventory updates and order statuses, allowing retailers to streamline their operations. Additionally, advanced technologies like RFID tagging and barcode scanning can help with accurate tracking of inventory movements across all channels. Furthermore, strategic inventory allocation across physical store locations, based on geographical location and customer demand will ensure minimum stockouts, maximum sales opportunities and enhanced customer satisfaction.
2. Training and evaluation of store associates
Providing necessary training to store associates on task prioritization will help them in managing multiple responsibilities at store. Along with the training, associates should be equipped with the right communication tools to coordinate the efforts for fulfilling online orders, without affecting the shopping experience for in-store customers.
In addition, retailers should establish clear metrics to evaluate performance and reward associates for fulfilling both types of orders. This will generate motivation among the associates to prioritize online orders just like assisting a walk-in customer with their purchase.
3. Collaborate with carrier services
When parcel carrier companies and retailers form partnerships, innovative solutions are brought to the table. By collaborating with carrier service partners, retailers can capitalize on various opportunities that could benefit both the parties. For instance, regular meetings and performance reviews will ensure that all the parties are aligned on the same goals and strategies, resulting in improved operations. Furthermore, retailers gain insights into customer buying patterns and delivery expectations by analyzing the data from shipping carrier companies. This will help retailers in determining which store location would be more suitable for fulfillment, when receiving online orders from certain areas.
4. Speedy order fulfillment through picklists
Picklists ease the process of directly picking up or gathering the order items in store to help fulfill customer orders efficiently. With picklists, store associates have clear instructions on which items to retrieve and where to find them, reducing the time spent on searching for products. By organizing items based on their location in the store or warehouse, picklists enable associates to navigate the inventory quickly and accurately. This minimizes errors and ensures that the correct items are selected for each order, improving order accuracy and customer satisfaction.
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HotWax Commerce’s Omnichannel Order Management System empowers store associates to complete Ship From Store orders with ease. With the key capabilities above, HotWax Commerce OMS streamlines the shipping process by reducing the time spent on batch picking, generating shipping labels, and reporting inventory variances. These features aid retailers in putting omnichannel strategy into action.
Talk to our team today to learn how HotWax Commerce can improve your Ship From Store strategy.
