By Nicola Kinsella, VP of Marketing, Fluent Commerce
As the pandemic raged across the globe in 2020, it was a crucible not just for public health strategies, but also for retailers’ e-commerce strategies, whether those retailers were neophytes or veterans in the space. Those retailers had to adjust workforce and supply chains on the fly, based on sudden and drastic changes in warehouse and labor capacity, all while adjusting to a litany of new health and safety protocols.
Not only that, they had to grapple with severe and unprecedented inventory stressors. Supplies were trapped in stores or transit based on delivery and demand impediments.
As a result, many adopted a strategy that had already picked up steam in the late 2010s, but which became tailor-made for the pandemic: “Ship from Store.” Ship from Store, literally shipping from stores by fulfilling online orders from in-store inventory, was uniquely fit for helping meet demand and moving stock out of storage and off the shelves during the pandemic.
As we enter what are perhaps the earliest days of a near-universal Ship from Store retail strategy, a diverse number of retailers will face challenges just as varied in fulfilling demand and creating a positive customer experience.
Many Points Serving A New Single Function
In the days when retailers only needed to consider shipping from distribution centers, fulfillment location management was relatively simple. However, now that almost every retailer must consider Ship from Store, there are many more points of distribution to also consider, whether that’s Ship from Store inventory itself, sales floor inventory, Click and Collect or BOPIS orders, as well as pickup and return locations.
Adding to the complexity is that these points of distribution weren’t designed to serve Ship from Store and already serve multiple retailer functions. Retailers must consider building a comprehensive process for these nodes. It’s not just a matter of switching them on or off. This includes automatically updating key metrics such as whether inventory is available in the online channel for different fulfillment options. Moving forward, retailers will need to adopt a more granular control over the functions of each point so that they can be better integrated into a whole Ship from Store strategy.
An Easy Solution For Balancing In-Store And Online Inventory
Most retailers have an order management system that allows a customer to place an order for items in multiple locations, with no need to split the order because an e-commerce platform on the back end can confirm the location of these items. Items are routed to the best store based on sell-through rates and location, but sometimes this can cause problems because items can be short-picked after an in-store customer has already bought the last one.
While inventory being so popular that it runs out is normally a good problem to have, this can create real issues for the e-commerce side of the shop. The retailer is left with a host of poor and even poorer options: splitting shipments while pulling the missing item from elsewhere, or restocking the whole order and rerouting it to a different location, driving up labor costs.
One solution for all of this is to create buffer stock, which is setting the safety stock level at a point where it won’t be made available to the e-commerce channel. This protects both the in-store and online customer experience, proving the power of a strong omni-channel strategy.
A Store Is Not A Warehouse
As more retailers move to a semi-permanent Ship from Store approach to inventory, they must be careful that this transition does not turn their stores into warehouses. These are two very different points of fulfillment with two very different approaches to customer service. Retailers cannot become too beholden to one or the other.
One way to do this while managing store fulfillment capacity is to limit the number of orders sent to each store per day. Tracking orders by status (e.g., open, needs packing, etc.) will maximize the number of orders each store fulfills, preventing an overwhelming of resources.
Tracking the maximum number of open orders by type also can be important. A store may be able to handle 20 open orders if they are standard orders, for instance, but that may change if these are bulk orders or there are other constraints. If a retailer can track both the maximum number of total orders at each store, as well as the different types of orders, both capacity management, and customer experience will be better controlled.
New Challenges And Their Solutions Well Beyond 2020
The immense transformation of the e-commerce industry over the past 12 months has posed tremendous challenges for carriers. With those challenges though has come a long reckoning for retailers to diversify their carrier strategy. There is no right answer for meeting the new challenges of an “e-commerce first” world. Third-party couriers are playing an increasingly important role, and some retailers are choosing to build their own vehicle fleets or employing store staff to deliver local orders.
Not every carrier or retailer is privy to these luxuries, so many will choose to fulfill Ship from Store by doing neither and having customers pick up their orders. This eliminates delivery delays and fees for the customer, with curbside collection becoming especially popular in 2020. For both the customer and retailer, this is a win-win that carries the least risk of any possible Ship from Store option.
Ship from Store services may have found their moment in the pandemic world of 2020, but they are sure to become a standard part of the fulfillment process for retailers around the world long after. Optimizing and perfecting those processes now is good practice for a post-pandemic future where customers will continue to want the in-store shopping experience of pre-2020 but will still expect the flexibility and fulfillment options they have grown accustomed to.