Ship-From-Store – How It Can Be A Key Competitive Advantage For Physical Retailers
By Michael Manlapas, MetaPack
Retailers and brands are important to consumers, and physical stores help to reinforce the connection between customer and brand, providing a marketing touch point that is harder to duplicate online. Consumers still primarily shop in-store; they like to browse and touch products even if they then purchase them online. Equally, a shopper could purchase online and opt to pick the product up in-store. The lines between digital and physical retail are blurred, and what resonates with the consumer isn’t how they shop, but the cost, experience and convenience.
This is particularly true when it comes to delivery. A growing number of shoppers favor non-standard options, so while home delivery retains a strong appeal for 85% of consumers, 50% now collect purchases in-store. If it’s more convenient for them, 70% expect to pay extra for one-hour, same day/next day or Sunday delivery[1].
This hunger for fast, convenient delivery and the importance for retailers of meeting delivery promises creates complexity, but it also delivers a major opportunity for them to better utilize their physical store networks to ship customers’ purchases from their stores.
Why Ship-From-Store?
The model of a single, large stock warehouse outside a major city is becoming dated. Today’s fast-moving commerce environment requires speed, agility and flexibility. The Ship-from-store model allows retailers and brands to support and enhance often stretched warehouse logistics. It bolsters a retailer’s ability to provide guaranteed rapid delivery services, while allowing it to utilize in-store stock more efficiently.
With ship-from-store, the digital/physical lines virtually merge into one, as store stock is used to fulfill not only online orders but also out-of-stock requests from nearby stores, and the later delivery of goods purchased in-store. By populating the distribution network, stores become mini-warehouses, and retailers can increase the items they ship, improve stock dispersion and availability and provide a broader choice of delivery options.
With MetaPack’s research finding that 65% of U.S. online consumers want retailers to offer one-hour deliveries in metropolitan areas, the hyper-local approach ship-from-store offers can help to accomplish this — where single stock, out-of-town warehouses will struggle to turn around a one-hour request.
Benefits of Ship-From-Store
Ship-from-store presents many advantages for retailers and brands, including:
Improved conversion. Consumers today lack patience. They go to the store looking for an item, and when it’s not available in their size or preferred color, they are more likely to leave and shop elsewhere than to wait for the store to have the next replenishment from the warehouse. It’s the same online, and the net result is that shopping basket abandonment increases in direct proportion to the length of time consumers’ wants are left unmet. Ship-from-store helps to address this need for immediacy and drives conversions.
Enhanced inventory optimization. Managing stock or inventory well is critical in retail, but it’s a constant challenge to match availability with demand, leaving most retailers with items sitting on their shelves for too long. By leveraging a ship-from-store model, an item on the shelf can be picked to fulfill an online order or customer need from a nearby store. Using inventory in this manner reduces the number of markdowns that retailers may have to make on products and enhances stock coverage.
Reduced shipping costs. The cost for retailers to transport goods locally is lower, meaning they can pass on these savings to consumers. Hyper-local deliveries represent considerable savings for the retailer and convenience for the customer, who — because of the proximity of stores to their address — will receive their goods more quickly. Increasing ship-from-store operations also reduces costs in warehouses and removes the need to transfer stock from stores to warehouses before sending it to other stores or to the consumer.
Delivery has the power to make or break the consumer shopping experience, and consumers desire convenience and speed. Ship-from-store allows physical retailers to effectively compete with the likes of Amazon, meet consumer demands, reduce their costs and maximize the value generated by stock within their stores.
Michael Manlapas is U.S. vice president and general manager of MetaPack.
[1] MetaPack 2018 State of eCommerce Delivery Consumer Research Report