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].
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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
