Ship-from-store offers retailers an effective way of strengthening their omnichannel presence. Fast delivery, reduced costs, increased customer satisfaction… the benefits of ship-from-store are numerous. However, this omnichannel is not always easy to implement, due to the multiplicity of delivery points.
What is ship-from-store?
Ship-from-store is when a physical store ships its own inventory to fulfill orders placed online. These orders are sent directly to the customer, without passing through warehouses or distribution centers.
What are the advantages of a ship-from-store model?
Ship-from-store: an advantage for the post-purchase customer experience
Clearly, ship-from-store contributes to improving the post-purchase customer experience. Orders are delivered more quickly, and there’s greater flexibility and visibility over unified inventories, enabling us to respond more effectively to customer needs.
Faster delivery
Speed of delivery is considered a real asset by consumers. Ship-from-store means faster shipping. In fact, thanks to a unified in-store and online stock system, it is possible to ship an order from the place where the product ordered by the buyer is immediately available. This avoids longer lead times if an item cannot be shipped from the warehouse closest to the customer.
Unified inventories for a broader offering
Ship-from-store is a way of unifying product inventories. Web stocks and store stocks are aggregated to form a single inventory. A brand can therefore offer a much wider range of products, by proposing items from both warehouse and in-store stocks. The result is higher sales, a better response to customer demand and a more efficient use of inventory.
Reduce the risk of surplus and dormant stocks
Overstocking is a common problem in physical stores. For an e-tailer with several stores, it’s difficult to accurately forecast the demand for products required for each store. In fact, certain product references may be more popular in one place than another. In order to avoid dormant stocks and free up space for new items, it is sometimes necessary to resort to markdowns, resulting in lower profits.
This phenomenon can be avoided with ship-from-store. Dormant stock can be resold online or transferred to more efficient points of sale. This makes it possible to create a localized inventory strategy adapted to each physical store, thanks to a “mobile” inventory.
Overcoming lack of storage space
Warehouse space is the lifeblood of logistics. Finding a place to store all your stock can be difficult, especially in situations where e-commerce activity is expanding. Having the option of using your physical store to stock products is a good alternative.
Despite its obvious advantages, ship-from-store has its share of challenges. A few pitfalls need to be avoided if you are to reap the full benefits of this strategy. Indeed, the major challenge of ship-from-store lies in the smooth running of operations and order processing.
What are the disadvantages of ship-from-store?
Multiple delivery points make inventory management more difficult
Ship-from-store puts logistics operations to the test. Retailers must perfectly manage the multiplicity of shipping points, between different warehouses and stores.
Real-time stock visibility is essential to avoid customers placing orders for out-of-stock products. However, the organization of in-store inventory can be more complicated than in the warehouse.
In fact, unlike a distribution center specifically designed for inventory organization, physical store stock is more difficult to manage. Items picked up and not put back in their original place, garments left in fitting rooms or even shoplifting complicate inventory tracking. In-store sales staff can be slow to find an item that a customer has ordered online, and this slows down the whole shipping process to the point of potentially causing an order cancellation.
Stores are not optimized for distribution
Traditional warehouses are specifically designed to maximize efficiency wherever possible. Everything from picking locations to shelving systems is designed to save precious minutes, if not seconds, in the time between order processing and product dispatch. Combined with high-performance technological solutions such as automation and data analysis, the whole process is streamlined.
In contrast, physical points of sale are designed to be customer-oriented. The vast majority of floor space is dedicated to displays, to showcase products rather than to provide convenient access for processing an order.
It’s possible to improve this space with some work, but it will never match the efficiency of a warehouse facility.
For e-tailers who prefer to ship-from-store, this can ultimately lead to a slowdown in their distribution network.
A deteriorating in-store experience
Good in-store operational execution often means a less pleasant customer experience. Turning a store into a warehouse won’t impress customers. On the contrary, it can upset them. Many e-tailers who implemented a ship-from-store strategy during the Covid-19 pandemic had great difficulty reopening their stores to customers. Orders shipped from the store encroached on the space reserved for physical buyers. This can lead to stock-outs, an impression of empty shelves and, above all, a deterioration in the in-store experience. Some stores find themselves relayed as appendices to e-commerce activity, rather than a channel in their own right.
Employees’ attention is divided between in-store customers and order preparation.
In many ship-from-store stores, employees are responsible for both in-store sales and the preparation of e-commerce orders. It can be particularly complicated to take care of a customer in the store while preparing orders. This can have a negative impact on local customers, who feel that they are taking a back seat.
What’s more, if employees have had to train “on the job” to handle e-commerce orders in addition to their store work, they are not necessarily properly trained. Order preparation requires different skills from sales or customer service. It makes sense to set up a training program, but this can be time-consuming and costly.
Rethinking the role of physical stores may be the right way to meet new customer demands. The advantages and disadvantages of ship-from-store must be considered before implementing an optimized omnichannel strategy.