How to fulfill orders most efficiently? By shipping from central warehouses, by using a retail ship-from-store strategy, or both? It’s a serious question that omnichannel retailers often face. Most retailers are familiar with fulfilling orders from central warehouses. Adding a new ship-from-store strategy can be costly. However, it also brings along many benefits which speed up delivery times and eventually cuts costs significantly.
What is Ship-From-Store Fulfillment?
Ship-from-store fulfillment is exactly what is says: rather than fulfilling online orders from central warehouses, the store act as a source of inventory. Orders that need to be fulfilled are picked up by the store’s staff and prepared for shipment. This brings along many benefits, including:
- Speeding up delivery times
- Allowing for pick-up in-store
- Reducing delivery costs
Let’s take a closer look.
Speeding up delivery times
Fulfilling all online orders from a central warehouse, usually means that deliveries take longer than actually needed. When an order is placed online, it is important to get it the customer as fast as possible. It reduces the chance of cancellation of the order, and improve customer’s satisfaction significantly.
Delivering orders from a brick-and-mortar store closest to the customer will speed up the delivery time. Needless to say, an order that is fulfilled from 5 km (or miles) away, will be much faster than a parcel that has to travel thousands of km.
Allow pick-up and in-store
In a recent study, customers were surveyed about buying online and picking up in store. The results speak for the importance of allowing in-store pick-up. For example, 57% of online shoppers said they had picked up an item in-store in the previous year. For 73% of the customer, avoiding shipping fees was the top reason for pick-up in store. 32.2% said it was convenient to pick up an item in the nearest store, while 30.4% did not want to wait for the order because they needed it right away.
Without a doubt, offering pick-up in-store increases customer satisfaction. However, pick-up in store also has other benefits, such as creating more foot traffic in brick-and-mortar stores. Customers who come to pick-up their order might be triggered to buy additional products in-store as well.
Reducing delivery costs
Both of the ship-from-store strategies described above have an additional benefit: they reduce costs.
First of all, distance is key to shipping costs. The further away the parcel has to travel, the more expensive it gets. However, when orders can be fulfilled from a shop that is near a customer, shipping costs will be significantly lower.
Second, a customer may simply choose to pick up an item themselves. This means that when a product is already available in-store the shipping costs are… zero! When a product is not available in the inventory of the shop, the item can easily be brought to the store with the next replenishment from your central warehouse.
Choosing the right system
Ship-from-store fulfillment is an omnichannel strategy that retailers need to invest in, in order to survive in the fast-changing omnichannel environment. Choosing the right system to allow for in-store pick up is key. Choose a system that allows inventory visibility, that can treat a brick-and-mortar as a warehouse and a system that offers an in-store system that connects to the inventory and online placed orders.
Want to know how Marello helps omnichannel retailers? We’d love to tell you more!