The ship from store phenomenon



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Logistics The ship from store phenomenon

Published on 13.11.2019 by Markus Peter, Business Consultant, PostLogistics

Ship from store is becoming ever more popular in retail logistics as it helps orders to be processed faster. The goal of this concept is to optimize delivery costs and deliver to customers quickly and reliably. The orders can originate from any channel.

The product ranges in stores and online shops are often interchangeable. Competitors mostly define themselves solely by price, but it remains to be seen whether this can keep customers interested over the long term. Past experience has shown that discounts and bargain prices have done little to foster customer loyalty. Fulfilment may be one way for retailers to differentiate themselves as customers appreciate quick, reliable delivery. And studies have shown that fast delivery also leads to fewer returns.

Ship from store allows retailers to better utilize the full capacity of their existing store network. The advantage for customers is that their goods arrive quicker. Keeping to delivery promises this way does mean retailers face greater complexity but it can pay off.

What does ship from store mean exactly?

The fast-paced retail environment requires speed, agility and flexibility. The ship from store model allows high street retailers to support central logistics and offer fast delivery services, while helping them to use stock more efficiently in their store network.

It blurs the lines between digital and physical to create a single space. Branches are used to fulfil in-store purchases and online orders. By transforming stores into mini warehouses, retailers can improve the availability of their goods. If outside warehouses are having difficulties in keeping to a one-hour delivery deadline, stores are uniquely well positioned and flexible enough to deliver the orders on time.

Ship from store boosts conversion rates

Today’s customers are impatient. If something isn’t available or can’t be delivered within the requested time, they will switch to another provider who can meet their needs. Ship from store can solve this problem as many goods are often in stock in stores and can be sent out quickly.

A positive effect of this method is that it optimizes stock levels. Use of inventories for delivering online orders improves stock coverage, particularly for stores situated close to one another.

Optimization of delivery costs

Costs for local transport are lower, meaning that these savings can in certain circumstances be passed onto consumers. Hyper-local deliveries offer considerable savings as stock doesn’t first need to be transported to a central warehouse before being sent to customers. Stores, in turn, become virtual distribution hubs.

The death of high street retailing

Ship from store methods can be a key tactic for stopping the decline experienced by many brick-and-mortar retail businesses in recent decades and even reversing this trend. 

Shipping and fulfilment will be crucial elements in determining whether high street retailers can hold their ground versus online retail.

The best way to prepare for changes is to secure a trusted logistics partner that has considerable experience over the last mile.

Interesting

Find out more about what customers want in the e-commerce trend indicator study

Markus Peter, Business Consultant, PostLogistics

Markus Peter is a Digital Commerce Business Consultant at Swiss Post’s Digital Commerce Competence Center, and he also lectures at a number of universities of applied sciences.

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