Ship From Store: Ensuring Retailers Don’t Miss The Boat
2020 was a year of major growth across the ecommerce space, and as retailers scrambled to meet demand, they faced many challenges. Warehouse capacity was reduced due to new health and safety protocols, lockdowns, and staff shortages, while at the same time, supply chains were disrupted, causing delays and stock shortages.
Containers sat at docks, transportation stalled, and stock sitting ready to be sold in stores was trapped. As a result, many retailers rolled out ‘Ship from Store’ services to help meet demand and move stock out of storage and off the shelves.
But what are the challenges facing retailers in establishing ship from store capabilities, and in doing so, how can they deliver a positive customer experience?
1. The Complexities of Location Management
When retailers only ship from Distribution Centres (DCs), fulfillment location management has become relatively simple. However, with Ship from Store, retail businesses suddenly have a lot more nodes to consider, including sales floor, inventory location for Ship from Store orders, inventory location for Click and Collect or BOPIS orders, as well as pickup and return locations.
What’s more, those nodes often perform multiple functions which adds to the complexity of the wider process. As a result, building an all-round process not just about turning a location on or off, but about managing which functions it can perform, and automatically updating on key metrics such as whether inventory is available in the online channel for different fulfillment options. In 2021, therefore, a lot more retailers are focusing on getting better granular control over the functions each store performs, and on making sure they can update locations, or groups of locations quickly and easily.
2. Building a Buffer for Short Picks
Most retailers will be familiar with the scenario where a customer places an order, and their ecommerce platform then confirms that all items are available in multiple locations, so there’s no need to split the order. Their order management system routes it to the best store based on sell through rates and location. However, they will also recognise the problem caused by items that are short picked after an in-store customer bought the last one.
While this is good news for the instore customer and store sales, it’s a real headache for ecommerce efficiency. The retailer now has to decide whether to split the shipment and fulfill the missing item from elsewhere, or restock the whole order and reroute it to another location – which significantly increases the labour costs for the order. The answer is to buffer stock. By setting a safety stock level below which an item isn’t made available to the ecommerce channel, the retailer can protect the in-store customer experience, and that of the online customer – proving the power of a strong omnichannel strategy.
3. Managing Store Capacity
While Ship from Store is a great way to augment existing fulfillment capacity, stores are not warehouses; they’re not as efficient, and also have other functions to perform, such as servicing in-store customers. And when ecommerce demand is up, retailers also have to manage the flow of orders to stores, cope with volumes and make sure they don’t miss their delivery SLAs.
The simplest way to manage store fulfillment capacity is to limit the number of orders sent to each store per day. To maximise the number of orders each store fulfills, it’s important to track orders by status (open orders that need to be picked and packed) so stores don’t become overwhelmed but work as effective parts of a process that helps retailers to ship more orders.
In addition, some retailers will be faced with additional capacity constraints, such as the availability of equipment. In this scenario, tracking the maximum number of open orders by type can be important. A store may be able to handle 20 open orders if they are standard orders, for instance, but only five if the order contains bulky products that require special equipment or handling. If a retailer is able to track the maximum number of total orders at each store, in addition to the maximum number of orders of different types, they’ll get greater control over capacity management, and ultimately, customer experience
4. Carrier and Capacity Challenges
The major growth in ecommerce seen over the past 12 months has also caused considerable issues for carriers. To even out capacity issues and spread the risk, some retailers are diversifying their carrier strategy. For instance, carrier aggregators are playing an increasingly important role, while other retailers are building their own vehicle fleets or using store staff to deliver local orders.
But the cheapest way to fulfill store orders is customer pickup. For customers, this eliminates delivery delays and fees entirely, and at present, contactless curbside collection offers many customers the safer pickup experience many desire. In many circumstances, this is a win-win for both parties, and why Curbside pickup will be a big part of most retailer’s 2021 strategy.
It’s clear that Ship from Store services have not only answered an urgent and short-term need, they have become a standard part of the fulfillment process for retailers around the world. Optimising the process today is good practice for a post-pandemic future where customers not only return to in-store shopping but also want their retailers to maintain the flexibility they have come to rely on since early 2020.
Credit: Rob Shaw, MD EMEA, Fluent Commerce