- 18 Jan 2016
What is Ship from Store?
What is Ship from Store? How do I implement Ship from Store? What are the benefits of Ship from Store? Read on to find out more about the most profitable fulfilment method for the omnichannel world: we’re helping leading retail brands achieve this.
Definition: Ship from Store is a fulfilment process, by which retailers use stock from their store estate to fulfil orders. As a truly omnichannel process, the orders might have come from any channel, for example the website. Fulfilling orders in this way makes the store into a virtual distribution hub.
Ship from Store benefits retailers in a number of ways. Firstly, it’s an efficient way to use stock, by preventing stores from unprofitable stockholding. For example, your flagship store might sell out of the new range bestseller, whereas a smaller store could end up with a surplus that are difficult to sell. Rather than having to discount this stock, retailers can maximise full-price selling through using the store inventory to fulfil orders, rather than sourcing the same item from the Distribution Centre (DC).
Using a retail stock management system, retailers can prevent frustrating web “out-of-stock” situations: just because an item might not be available in the DC, it might be hanging on a rail in-store, dressing a mannequin, or have been returned to a store. This captures sales that might otherwise have been lost. Using store inventory to fulfil web orders of products that are out of stock at Distribution Centres results in immediate revenue boosts of up to 10%-20% by making more inventory available for sale. Online sales at American Apparel have increased by 30% since they started using their stores as “backup fulfilment centres” (Kurt Salmon “Why Ship from Store”).
Overall shipping costs for the retailer also experience a decrease, as dispatches from the DC reduce dramatically. In short, the store must become a critical part of retailers’ omnichannel processes. Ship from Store could increase sales by an average of 20%. For a £50 million turnover retailer, that would mean an extra £27,000 in sales every day (ecommerce Week).
Furthermore, industry insiders see overall sales increases of 10-40%: circulating inventory within all channels increases margins by 1-3% whilst reducing the likelihood of inventory markdowns by 10-15%. (BirdDog “Benefits of having a Ship from Store Strategy”).
We’ve worked hard on Ship from Store strategy, to engineer our solution with the following points in mind;
- Ensuring that the appropriate algorithms are in place to ship from the most appropriate store locations, to maintain stock availability at the most prominent and profitable stores, and source from the most viable locations.
- Additional load to the store must be appreciated. Ensure that staff are trained effectively and ready to cope with the potential demand placed on stores for picking, packing and despatching stock.
- Ensuring that stores embrace Ship from Store as a cultural change rather than see it as a hindrance. As such, procedures need to be in place to ensure that the store picking, packing and despatching the stock gets credited for the sale. Also, incentivise store staff to hit store despatch targets in the new omnichannel culture.
- To make Ship from Store work at its optimum, retailers need 100% real-time visibility of their complete inventory, across all channels. Our omnichannel supply solution, Merret, facilitates this critical visibility.
We’re at NRF Expo this week, so if you have any further questions about Ship from Store, or want to invest in your retail IT infrastructure in order to introduce omnichannel fulfilment methods, please get in touch with us!
Make an enquiry by filling out our quick form, call our Head Office on +44 (0)115 8533910 or email firstname.lastname@example.org