IRCE recap: Retailers claim ship-from-store successes
Recently, more retailers have begun to report preliminary success with the ship-from-store model of order fulfillment. At the Internet Retailer Conference and Expo in Chicago, two retailers described their different experiments with using stores in addition to, or in place of, distribution centers in two sessions: one given by Karl Bracken, senior vice president of supply chain transformation at Target, and by Rory Hudson, vice president of Information technology at Zumiez.
During the 2015 holiday season, Target drastically increased its ship-from-store capabilities, extending it to more than 450 stores. Mr. Bracken painted the move as a success.
“At peak, instead of having every product go through our fulfillment centers and trying to figure out how to manage that … and potentially dissatisfying a guest, we’ve been able to take that peak demand and shift some of it to stores so that we can get those orders fulfilled and out to guests faster,” said Mr. Bracken.
Mr. Bracken said 30 percent of orders during the holiday season were filled by stores. He sees flexible fulfillment as being critical to retail’s future and pointed out the need for the company to understand efficient tradeoffs when utilizing different forms of fulfillment.
Zumiez recently implemented a distributed order management system across 600 stores to turn every store into a fulfillment channel, allowing for ship-from-store as well as in-store pickup of online orders.
Mr. Hudson said that the move away from distribution centers has led to reconnecting store sales teams with their customers.
“Without any directions from home office, our sales associates do what our sales associates do,” said Mr. Hudson. “They interact with our customers.”
Mr. Hudson told a story of a store associate who noticed that the shipping address was close to where they lived and dropped product off at a customer’s home. Mr. Hudson further reported drastically increased delivery time and customer satisfaction.
In response to an audience question, Mr. Hudson did not clarify how individual stores were incentivized for ship-from-store success, beyond stating that the chain has “a culture around customer experience” and that wage and incentive is a part of that.
DISCUSSION QUESTIONS: Do you expect ship-from-store to become more central to e-commerce fulfillment in the years to come? Are some retailers more suited to successfully implement ship-from-store than others?