Retail Trends

Raise the Value of Physical Stores with Ship-to-Store

2 min read

Tech-savvy consumers have increasingly higher expectations for instant gratification – they want to buy something and have it in their hands fast. In advanced economies, consumers take it for granted that anything they buy online will get to their doorstep in a day or two.

But in emerging markets like India and China, distribution centers may be miles away from the customer. The more challenging the logistics, the longer it takes and the more expensive it gets.

Typically, stores fulfill their online orders direct from distribution centers, often located near large airports. Ship-from-store capabilities allow bricks-and-mortar retailers to fulfill online orders from local stores instead of distribution centers, which can thousands of miles away from customers.

Cut Down Shipping Costs, Provide Faster Delivery

Ship-from-store has been proven to cut shipping costs by nearly one third compared to shipping from a distribution center. It also speeds up delivery times. Typically when shipping from a distribution center, less than 10% of goods have a one-day transit time.  Ship-from-store makes it possible for 90% of goods to achieve a one-day transit time.  In other words, 80% of goods will arrive within one day, and 96% within two days.

In a recent Forrester report, 93% of retailers said that enabling ship-from-store had resulted in a positive or significantly positive uplift in revenue, 77% said it had reduced or significantly reduced their fulfillment costs, and 88% said it had improved or significantly improved their customer satisfaction metrics.

Boost In-store Sales

Other advantages include increase sell-through and reduced incidences of out-of-stock/back order items, markdown costs and inventory write-offs. Consulting firm Kurt Salmon reports that fulfilling web orders from store inventory when the warehouse is out of stock improves e-commerce revenue by 10 to 20 percent.  In other words, this strategy captures sales that might have been lost otherwise and gives physical stores the opportunity to generate more revenue.

Generate More Revenue

Bricks-and-mortar retailers stand to benefit a great deal from adopting a mobile-integrated inventory fulfillment strategy that is aligned with customer expectations. The potential gain in revenue is even greater in emerging markets like Mexico, India, Brazil, and China, where online shopping is often the most convenient option.

Ship-from-store distribution requires a fully integrated system with cross-channel capabilities and access to chain-wide inventory online. Cost-effective platforms like Openbravo Commerce Suite allows retailers real-time visibility and control of stock across locations, letting them decide what the minimum number of stock items should be in a given location and determine when it is more cost-effective to fulfill an online order from store inventory and when from a distribution center.