Viare technical solutions consultant Jarrod Goodwin discusses why in-store fulfillment is key for retailers.
The retail environment is always changing, and shoppers today expect greater convenience, faster delivery times, and a seamless shopping experience across both online and offline channels. In response to this demand, many retailers are turning to store fulfillment as a key strategy.
The Concept of In-Store Fulfillment
In-store fulfillment, also known as ship-from-store, is a fulfillment strategy where physical stores act as mini distribution centres. Unlike traditional warehouses, retail stores are often located closer to customers, which allows for shorter lead times and more cost-effective shipping. By using stores as fulfillment hubs, retailers can reduce strain on centralised distribution centres while improving delivery speed, inventory access, and returns processing.
Importance during Black Friday weekend
Black Friday weekend in Australia, initially began in 2017 with the arrival of Amazon as an online-only event. While it has since expanded to include in-store sales, the main growth and focus remain on online shopping. According to Mastercard, online sales on Black Friday this year saw a 14.6% increase, while in-store sales rose by just 0.7%. This shift presents a valuable opportunity to reduce pressure on warehouse staff by utilizing store employees for order fulfillment during this busy period.
Many retailers a 48% increase in the number of Black Friday orders dispatched on the same day compared to last year. Even more impressive, one of our home goods brands managed to ship 98% of Black Friday orders within 48 hours utilising smart order routing and in-store fulfilment.
1. Faster Delivery Times
In-store fulfillment naturally leads to quicker dispatch times, since orders are processed at local stores that are closer to customers. By optimizing fulfillment processes and leveraging existing resources, retailers can significantly speed up delivery times. This, in turn, boosts customer satisfaction, as faster delivery times are a top priority for many consumers.
Some retailers have seen up to a 300% increase in dispatch speeds during peak periods by using sophisticated order management systems. This demonstrates how a well-executed in-store
fulfillment strategy can directly enhance the customer experience, especially during high-demand seasons.
2. Boosting Online Sales
By using in-store inventory for online orders, retailers can vastly expand their product range without needing to increase their warehouse space. This results in more product availability online, leading to higher customer satisfaction and sales. Retailers that have adopted in-store fulfillment have reported up to a 60% increase in online sales, highlighting its potential impact on growing the online business.
Additionally, Click & Collect, a major component of in-store fulfillment, can contribute to 30% to 40% of online sales for many retailers, with top performers reaching over 60%.
3. Cost-Effective Operations
In-store fulfillment helps retailers reduce costs associated with traditional warehouse-based fulfillment. Maintaining a warehouse or partnering with a third-party logistics provider can be expensive, especially for smaller or mid-sized retailers. By using existing retail stores for order fulfillment, businesses can take advantage of their current infrastructure and workforce, avoiding the need for expensive investments in new facilities.
4. Improved Inventory Management
Effective inventory management is essential for retail success, and in-store fulfillment can enhance this process. With real-time visibility into store inventory, retailers can use stores as both sales locations and fulfillment centeres, ensuring that stock is distributed efficiently across all channels. This allows for more accurate demand forecasting, reducing the risk of overstocking or stockouts. Furthermore, by consolidating inventory across both online and physical stores, retailers can streamline their operations and reduce waste.
5. Reduce Shipping Costs
Shipping from a store can lower delivery costs compared to traditional fulfillment from central warehouses, especially for local or regional deliveries. Traditional eCommerce fulfillment often requires longer distances to be covered, leading to higher shipping costs. In-store fulfillment can eliminate these expenses by using the store network to fulfill orders that are closer to the customer.
In-store fulfillment is no longer just a "nice to have" option for retailers - it is a crucial strategy for staying competitive in today’s challenging retail environment. By leveraging physical stores as fulfillment hubs, retailers can expand product availability, enhance customer satisfaction, and drive sales growth, all while optimising their supply chain operations. For retailers looking to stay competitive in today’s fast-paced retail environment, in-store fulfillment offers a clear path forward.
Visit Viare for more information.