In the last couple of weeks, we’ve talked a lot about Amazon, both because we are launching a connector for sellers to integrate Amazon into their back-end systems, and also because they are simply a fascinating company and a great case study in retail success. The company is carving out a new path for how to succeed in retail by having a razor sharp customer focus. In short, it sounds something like this: have the product the buyer is looking for, sell it at a great price, and ship it as fast as possible. Add to that the online ordering conveniences that Amazon has perfected and what more could a buyer want?
The Shift to Ship-from-Store
As Amazon charges forward, the rest of the market is creatively finding ways to keep up. They say imitation is the sincerest form of flattery and many companies doing just that trying to become their own Amazons in order to compete. A great example of this is the number of retailers implementing a ship-from-store program. Amazon is opening more and more distribution centers to get closer to their customers and deliver products faster. By their using stores as miniature fulfillment centers, retailers are employing the same concept.
Many companies began their journey to ship-from-store with an order online & pick up at store strategy (i.e. Walmarts site to store program). Both programs have similar benefits, but ship-from-store takes the process a step further by extending it to the buyers home. Nordstrom, Macys and Toys R Us are all examples of large retailers who are deploying this strategy and getting some great results:
- Reducing delivery time by shipping from the location closest to the buyer
- Lowering shipping costs
- Redirecting store employees to fulfill orders, thus reducing downtime
- Increasing inventory turns by moving slow items or compensating for too much/too little inventory in certain locations
- Reducing markdowns by reducing overstocked items
- Satisfying customers by speeding delivery and meeting demand
How any Small Business can Realize Ship-from-Store Benefits
Ship-from-store is not just for the big guys any longer. It’s not just for retailers either. Early adopters made heavy investments in technology in order to make ship-from-store happen, but that’s not necessary today. Even companies with a limited budget can realize the benefits of ship-from-store.
As RetailNet Group points out, the key to ship-from-store is making inventory visible and defining business rules that ensure inventory levels are monitored so that in-store shoppers don’t experience stock-outs. Knowing that, smaller retailers can take advantage of low-cost, cloud-based technology that links multiple sales channels and inventory systems to provide a cross-channel view of inventory. Meanwhile companies without physical stores can fulfill orders from drop-ship suppliers or third-party fulfillment centers to achieve similar results.
Technology has evolved over the years so that the capabilities found in highly sophisticated, multi-million dollar systems can now be emulated in smaller, more affordable packages that are designed with the smaller seller in mind. Multi-channel management systems, such as nChannel, provide inventory synchronization and visibility across multiple sales channels and back-end systems; the business rules necessary to make intelligent decisions based on pre-defined triggers (such as low stock in a particular location); and integration with third-party organizations to fulfill orders outside of the organization.
The one perspective we havent explored yet is that of the customer. Ship-from-store provides buyers with the cross-channel experience they crave and, in some cases, expect. Here are two scenarios:
- If a buyer walks in to a store and don’t see the color or size they are looking for, they expect you to find it while they stand there at the counter and ship it to them immediate gratification.
- If a buyer makes a purchase online, they want fast delivery in their hot little hands now!
Ship-from-store enables immediate gratification in both of these by finding the inventory at the location closest to the buyer and generating the order for fulfillment. Large retailers develop good/bad reputations based on how quickly they deliver or the lengths they will go to find an item a buyer is looking for. Now that ship-from-store is a possibility for small companies, they too can offer exceptional service and build up customer loyalty in the exact same way.