Welcome to swimsuit season! Swimsuits are flying off shelves to adorn hard bodies at an alarming rate. That is, until fall fashion rolls in. That’s when swimsuit prices are slashed and swimsuits are relegated to dangle on a haphazard clearance rack. But what about the stores in the land of eternal summers and severe droughts aka California? Their stores have high demand and thus nothing in stock, and the stores in the north have way too many end of season swimsuits. This is the continual, inevitable, retail cycle. This, in conjunction with online competition, has retailers trying to figure out their next move.
Ship-from-store allows online orders to be fulfilled from a physical retail store. Like those northern stores with all those swimsuits. A good order management system will allow you to customize the routing of an order based on specific parameters which will assign it to the optimal location for fulfillment. Parameters such as inventory availability.
Ship-from-store allows you to reduce cart abandonment, move stale inventory, reduce costs, and deliver on customer expectations.
1. Reduce cart abandonment
A shopper is more likely to find the item they want when all available inventory across the entire company is made available online. This helps to avoid purchase abandonment. According to Forrester Research, “Our interviews with retailers revealed that when online stores are able to sell both store and online inventory, a profound uplift in online revenue in the region of 10% to 30% can be achieved.”1
Not only does ship-from-store reduce online shopping cart abandonment, but it will also reduce in-store sales loss. If a customer walks into a store and the inventory is low or out of stock, a store associate can route the desired item from a different location to fulfill the order.
2. Move stale inventory from stores and decrease markdowns
Reduce end of season markdowns by fulfilling online orders from stores with the slowest moving inventory. Instead of discounting end of season inventory like those swimsuits, use ship-from-store. According to Forrester Research, “One retailer we spoke to reported a 30% improvement in in-store inventory margins after optimizing its ship-from-store program to avoid markdown situations.”1
Also, returned items that are no longer in season won’t have to be in an automatic markdown situation. That item can be sold online, and the store that has the item will fulfill the order.
3. Reduce Costs
Reduce carrying costs when you fulfill and ship online orders with items sitting on your shelves. This increases inventory turns, and as a bonus gives retailers a better idea of the items they want to sell in their stores. During seasonal peaks when retailers would need more people to fulfill online orders at a distribution center, retailers that utilize ship-from-store have the opportunity to save costs on temporary workers by spreading that workload out to the retail locations.
Additionally, an order can be routed from the store closest to the consumer, saving on shipping costs. In a report done by Forrester Research, they say, “Retailers with an operational ship-from-store program have the opportunity to ship locally from a store in geographic proximity to the customer’s delivery address….Consider that the standard cost of shipping a one-pound package via UPS ground from New York State to California is $7.71, versus $6.24 for shipping the same package within California.”1 This is convenient for either party who may be paying the shipping.
4. Deliver Superior Customer Satisfaction
Ship-from-store opens up a wider range of inventory. When an online customer can’t see store inventory, they don’t have a full view of the items available for purchase. As a result, you might have an avoidable out-of-stock scenario where the item might not be available in a distribution center or warehouse, but is available in retail stores. This could lead to a disappointed customer who will leave a retailer’s website and go search elsewhere on a competitor, like Amazon.
The current ways of buying and selling need to change. Customers demand more, and retailers want to give more while also succeeding and surpassing business and customer expectations. Ship-from-store is quick to implement and easy to use. Ship-from-store can be the tool that will improve sales, build greater customer satisfaction, and even change the way you look at end of season swimsuits.
Consider this information from Macy’s: The number of Macy’s stores doing ship-from-store grew from 23 to nearly 300 in 2012, with 200 more planned for 2013. Macy’s made plans to ditch distribution centers and instead implement ship-from-store fulfillment. Terry Lundgren, CEO of Macy’s explained, “We’re no longer going to need fulfillment centers anymore. We’ve got 800 of them, and they’re called Macy’s stores.” Innovators like Macy’s chose to turn their stores into assets by utilizing ship-from-store.
Contact us today to find out how you can easily implement ship-from-store.