Where will shipping materials be stored? Who will train store associates on how to package fragile items so they don’t get damaged? These are just some of the change management considerations for Ship from Store.
A retailer’s greatest liability is their inventory. It represents a huge capital investment. One on which the return must be maximized. Yet competition in retail is fierce. And not just because of downward pressure on item prices. Rivalry now includes the cost of delivery, consumer expectations for fast delivery, and their unwillingness to pay for speed. Thanks, Amazon. So, what can multichannel retailers do?
In the quest to compete with Amazon’s fast delivery speed, stores are a key advantage. Ship from Store, where eCommerce orders are shipped from a local store to the customer, is one of the fastest-growing trends in retail. Stores do double duty as mini Distribution Centers (DCs). And it’s not surprising. With at least 80% of their inventory in the stores, at a location so close to customers, it is a great way for retailers to deliver faster, and for less money. Think about Walmart in the United States…
Their 4,700 stores are located within a ten-mile vicinity of 90% of the U.S. population. This means delivery from a Walmart store to a customer would be a fast, and easy way to reduce shipping costs. Now, not all retailers have 4,700 stores. But if they have more stores than DCs, there are still many advantages to Ship from Store. For instance:
- Delivery times can be reduced without the high cost of expedited shipping from a DC hundreds of miles away
- Store inventory can be utilized to fulfill online orders, which can reduce the amount of inventory held at a DC
- By using slow-moving inventory at a store to fulfill online orders, markdowns can be avoided or reduced, and
- By leveraging store inventory, retailers can achieve a 10-20% revenue increase simply as a result of reducing the number of lost orders due to out of stocks.
But the complexity of Ship from Store should not be underestimated. Implementation requires store associates to learn new processes and skills. And like any other omnichannel fulfillment initiative, preparation is key. So here are some change management questions to consider:
- Who and how will the store receive the order? Is this a store or backroom function?
- Where will eCommerce orders be staged, packaged, and held in the store?
- Where will shipping materials be in the store?
- Who will train store associates on how to package items for shipping?
- Will they require special training for fragile items so they don’t get damaged in transit?
- How will the store print shipping labels?
- Will the store pick items during store hours or off-hours?
- In the store, will there be specific associates responsible for picking, packing, and shipment?
- Will the store associate process the shipment confirmation via the Point of Sale system? Online? Via a mobile device?
- How many orders can the store handle per day? Will additional labor be required? What is the anticipated volume increase during peak season or promotions?
- Will the store be shipping merchandise through, USPS, UPS, FedEx, Uber, or associates? Will it change by location? Delivery address? Customer preferences? Time the order was placed? Carrier pickup time?
- Who is responsible for the shipping process and cost? Will the shipping expense be charged to the store or online for compensation/bonus calculations?
- How will packages be sorted for different carriers?
- If items in a single order are being sourced from multiple locations, are stores going to consolidate orders via the DC and/or store transfers? How will store associates know which items belong to which order?
- Will additional information, return labels, or promotions be included in the shipment?
Ship from Store is the most complex of all store fulfillment. Stores were not designed to be distribution centers. They were designed for cash and carry. But it’s a great option to leverage all inventory within the omnichannel journey. And with ‘Ship from Store’ you can take full advantage of your entire store network to fulfill online orders. To learn more about Ship from Store change management, please Contact Us.