RETAIL GLOSSARY

Ship-from-Store

A fulfillment method where online orders are shipped directly from a physical store location, enabling retailers to leverage their existing inventory and reduce delivery times.

What is Ship-from-Store?

Ship-from-store is a retail fulfilment strategy where a physical store serves as a distribution center for online orders. In this model, orders placed online are fulfilled and shipped directly from the nearest brick-and-mortar store rather than a centralised warehouse. Ship-from-store offers several advantages, including reduced shipping times, lower shipping costs, and improved inventory management, but it also requires efficient inventory tracking and staff training to be successful.

How Ship-from-Store works

Order Placement: A customer places an order on the retailer's website or mobile app.

Inventory Visibility: The retailer's inventory management system checks the availability of the ordered items in nearby physical stores. This is done in real-time to ensure accurate stock information.

Store Selection: The system selects the store(s) with the requested items in stock and closest to the customer's shipping address. It might also consider factors like store workload and shipping costs.

Order Processing: Store staff receive the order and pick the items from the shelves. They may use handheld devices or printed picking lists to locate products efficiently.

Packaging: The items are packaged for shipping, often in branded packaging, and a shipping label is generated.

Shipping: The package is then shipped directly to the customer using a chosen carrier, which could be a courier service or a delivery partner. The customer receives tracking information.

Inventory Updates: The retailer's inventory system is updated in real-time to reflect the items picked and shipped, ensuring accurate stock levels.

Delivery: The customer receives the order at their designated address.

Ship-from-store allows retailers to reduce shipping times and costs, expand their product offering without increasing warehouse space, and optimise inventory management. It also helps to improve the utilisation of physical store locations. However, it requires efficient inventory tracking and management systems, well-trained staff, and coordination between online and in-store operations.

Pros of Ship-from-Store

Faster Delivery Times: Ship-from-store allows retailers to leverage their network of physical stores, which are often closer to customers than centralised distribution centers. This proximity enables faster delivery times, meeting customers' expectations for quick shipping and potentially increasing customer satisfaction.
Optimised Inventory Management: Ship-from-store helps retailers optimise their inventory by reducing the need for excess safety stock in centralised warehouses. It allows for more efficient inventory turnover and reduces the risk of overstocking or understocking, ultimately improving profit margins.
Expanded Product Availability: Retailers can expand their online product catalog without the need for additional warehouse space. By using inventory from stores, they can offer a wider range of products to online customers, increasing sales opportunities and catering to diverse customer preferences.

Cons of Ship-from-Store

Inventory Accuracy Challenges: Ship-from-Store relies on accurate inventory management across all store locations. Inaccuracies in inventory data can lead to overselling, order cancellations, or delays in fulfilling customer orders, resulting in poor customer experiences and potential loss of sales.
Operational Complexity: Coordinating shipments from multiple store locations can be operationally complex, requiring specialised software, efficient logistics, and well-trained staff. Retailers must invest in technology and training to manage this complexity effectively.
Impact on In-Store Experience: Using store inventory for online orders may affect the availability of products for in-store shoppers. If not managed properly, it can lead to stockouts or dissatisfaction among in-store customers, potentially impacting in-store sales and brand perception.

FAQ

Below you will find answers to common questions

How can Ship-from-Store benefit our retail operations?

Ship-from-Store offers several benefits to retailers. Firstly, it enables us to utilise store inventory more efficiently, reducing overstock situations and potential markdowns. Secondly, it allows us to offer customers faster delivery times, improving their satisfaction and increasing the likelihood of repeat business. Lastly, it helps us compete with e-commerce giants by expanding our shipping reach without investing in additional distribution centers.

What are the key challenges we should be prepared for when implementing Ship-from-Store?

While Ship-from-Store offers advantages, it does come with challenges. One key challenge is maintaining accurate inventory data across all store locations, as inaccuracies can lead to overselling or customer order cancellations. Additionally, we need to invest in proper training and technology to handle the operational complexities of managing orders from multiple locations. Lastly, we should carefully consider the potential impact on the in-store experience, as using store inventory for online orders may affect product availability for in-store shoppers. Addressing these challenges is essential for a successful Ship-from-Store strategy.