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1 of 16
Sources: (1) U.S. Department of Commerce, 2017, (2) Pew Research Online Shopping and Ecommerce Survey, 12/19/16, (3) Retail Dive Survey, 2/22/2017
Retail Landscape – Despite double-digit growth,
ecommerce represents only 10% of US retail sales
Brick-and-Mortar
• $4.4 trillion U.S. sales in 2016 1
• 2.9% growth vs. 2015 ($124B) 1
• ≈90% of total U.S. retail sales 1
• 64% of Americans indicate that, all things being
equal, they prefer buying from physical stores to
buying online 2
E-Commerce
• $395 billion U.S. sales in 2016 1
• 15.6% growth vs. 2015 ($53B) 1
• ≈10% of total U.S. retail sales 1
• 79% of Americans make purchases online. 2
• 67% of millennials and 56% of GenX “prefer to
search and purchase on e-commerce sites rather
than in-store” 3
© Pulse Commerce 2017 - All rights reserved 2
Omnichannel Retail combines the power of online
and offline retail to delight customers
Omnichannel Retail
• Serve customers online, in stores, via
contact centers and much more
• Deliver amazing, consistent experiences
across channels
• Omni-channel capabilities include:
• Ship from store
• Click & Collect (Buy online, pickup in store)
• Research online, purchase in store
• Research in store, order online
• Buy online, return to store
© Pulse Commerce 2017 - All rights reserved 3
Ship from store refers to fulfilling online orders
from brick-and-mortar store inventory
Distribution Center
Warehouses are stocked with products
to be redistributed directly to
consumers
Ship From Store
Retailers can use stock from
their store inventory to fulfill and
ship orders
© Pulse Commerce 2017 - All rights reserved 4
Ship from store improves shipping cost and speed,
2 factors that heavily influence online purchases
© Pulse Commerce 2017 - All rights reserved 5
Source: Big Commerce, “Omni-Channel Retail in 2017: What Brands Need to Know and Modern Consumer Shopping Habits”
80%
Shipping Cost and
Speed
Benefits – Ship from Store reduces delivery times
© Pulse Commerce 2017 - All rights reserved 6
Toys-R-Us: 94% of ship-from-store orders
shipped within two days during peak season.1
Best Buy: 2 day reduction in average shipping
time after implementing Ship from Store.2
Target: Ship from store contributed to 3-day
reduction in average delivery time.3
Sources: (1) Kurt Salman Associates, “Ship-from-Store: If You
Haven’t Started Yet, You’re Dangerously Behind.”
(2) Stella Service, 1/7/2015, “2014 Fulfillment Coverage,
Trends in Shipping, Delivery, Returns.”
(3) Stella Service, 10/1/2014, “Target Delivers in Less
Than 3 Days Now”
Faster Delivery
• Deliver from store closest to shopper
• Deliver from store when DC out of
stock
Benefits - Ship from Store reduces shipping costs
Lower Shipping Cost
20% shipping cost reductions from
fulfilling within the shipping delivery
zone
Ship from store provides low-cost
and high-speed delivery by
distributing “warehouses” and
effectively putting “fulfillment
centers” relatively closer to shoppers.
© Pulse Commerce 2017 - All rights reserved 7
Forrester:
Retailers with an operational ship-from-store program have
the opportunity to ship locally from a store in geographic
proximity to the customer’s delivery address….
… Consider that the standard cost of shipping a one-pound
package via UPS ground from New York State to California is
$7.71, versus $6.24 for shipping the same package within
California.”
Benefits - Ship from Store optimizes inventory to
increase topline revenue and improve margins
Inventory optimization
Smart distribution from warehouses
and stores boosts revenue and
margins
• Reduce markdowns by shipping from
overstocked stores
• Ship from stores when warehouses are out of
stock
• Ship from another store when local store is out
of stock
Revenue and Margin Increase
30% Online sales increase at American
Apparel after starting to use stores as
backup fulfillment centers.
.
39% online sales bump at Nordstrom’s
attributed to integrating online and in-
store inventories.
Source: Kurt Salmon Associates, Ship-from-Store: If You Haven’t
Started Yet, You’re Dangerously Behind
© Pulse Commerce 2017 - All rights reserved 8
Benefits - Ship from Store increases the number of
SKUs available for online purchase
Expand Online Assortment
Increase available online SKUs without
capital investment in distribution
centers
© Pulse Commerce 2017 - All rights reserved 9
66% of our total unique SKUs
are only on our store shelves,
not in the warehouse.
GameStop saw a 20% lift in sales of
goods that were not in the warehouse
by allowing customers to view all
products in the store online, and
letting employees in nearby stores
view on-shelf inventory as well.
Source: Chain Store Age, “GameStop scores big with Ship From Store”
Challenges – Stores must have space dedicated to packing
and shipping, and need software to manage operations
Physical space and tools
• Physical stores are not designed as
warehouses.
• Retailers must find room for packing
tables, materials, and staging.
• Software is needed to assign orders,
print packing and shipping labels
• Employees may only be able to fulfill
when stores are empty (off hours)
© Pulse Commerce 2017 - All rights reserved 10
Challenges – Employees must be trained, and their
incentives need to align with offline and online success
Employee training and incentives
• Employees need to learn picking and
packing procedures
“Store associates often send out poorly packaged items
because they have not been properly trained” – or-- “they
do not see their work duty as being a warehouse
associate.”
• Employees may focus on store customersm
“Store associates, especially commission-based employees,
sometimes hold back ‘best sellers’ rather than fulfill online
orders, to ensure items are available for their clients.”
© Pulse Commerce 2017 - All rights reserved 11
Source: Retail Wire, 3/29/2016, “Store Fulfillment Is Creating Associate Tension”
Challenges – Visibility into real-time inventory
across all channels is required to succeed
Omnichannel Inventory Visibility
Success hinges on a real-time, integrated,
enterprise-wide view of orders & inventory
Real-time, instantaneous decisions, include:
• Which stores can fulfill the entire order?
• Which store is sitting on too much inventory?
• Which store is closest to the ship-to address?
• If in stock, can our employees find it?
© Pulse Commerce 2017 - All rights reserved 12
Source: Practical Ecommerce 6/5/2017, “Ship from Store Fulfillment a Must for Brick and Click Retailers”
Resolving Challenges – An Enterprise Order Management
and Inventory Platform enables Ship from Store Success
Order & Inventory Platform
• Real-time inventory visibility and control
across the entire enterprise
• Intelligent Order Routing identifies the
optimal warehouse or store for fulfillment
• Streamlines fulfillment with order
prioritization, packing slips, shipping
labels
© Pulse Commerce 2017 - All rights reserved 13
Resolving Challenges – Retailers must assign employees
to fulfill orders, and decide what KPIs they’re to improve
Business Decisions
• Staffing: Who will fulfill ship-from-store
orders?
• Which goals will we seek to achieve?
• Expand inventory / avoid stockouts?
• Maximize full price sales / Ship from
overstocked stores?
• Save on shipping costs?
The answers will dictate the intelligent order
routing rules
© Pulse Commerce 2017 - All rights reserved 14
Pulse Commerce Order & Inventory Platform
© Pulse Commerce 2017 - All rights reserved 15
Pulse Commerce Order and Inventory Platform is the central nervous system of
your omnichannel commerce operations, providing unprecedented real-time,
enterprise-wide visibility and control of all orders, inventory and customers.
Connect with us!
Pulse Commerce
855 Main Street, Suite 400
Bridgeport, CT 06604
Tel: (877) 243-3612
sales@pulse-commerce.com
Webinars
• How to Market and Sell on Pinterest
• Building an Effective Digital Loyalty Program in the Amazon Age
Pulse Commerce
• Learn more about our Order Management Platform
Whitepapers
• 5 Hidden Costs To Avoid When Buying an Order Management System
• Homegrown, On-Premise, or SaaS: Which Order Management System is Right for
me?
ADDITIONAL FREE RESOURCES

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5 Ways Retailers Increase Profit with Ship From Store Programs

  • 1.
  • 2. Sources: (1) U.S. Department of Commerce, 2017, (2) Pew Research Online Shopping and Ecommerce Survey, 12/19/16, (3) Retail Dive Survey, 2/22/2017 Retail Landscape – Despite double-digit growth, ecommerce represents only 10% of US retail sales Brick-and-Mortar • $4.4 trillion U.S. sales in 2016 1 • 2.9% growth vs. 2015 ($124B) 1 • ≈90% of total U.S. retail sales 1 • 64% of Americans indicate that, all things being equal, they prefer buying from physical stores to buying online 2 E-Commerce • $395 billion U.S. sales in 2016 1 • 15.6% growth vs. 2015 ($53B) 1 • ≈10% of total U.S. retail sales 1 • 79% of Americans make purchases online. 2 • 67% of millennials and 56% of GenX “prefer to search and purchase on e-commerce sites rather than in-store” 3 © Pulse Commerce 2017 - All rights reserved 2
  • 3. Omnichannel Retail combines the power of online and offline retail to delight customers Omnichannel Retail • Serve customers online, in stores, via contact centers and much more • Deliver amazing, consistent experiences across channels • Omni-channel capabilities include: • Ship from store • Click & Collect (Buy online, pickup in store) • Research online, purchase in store • Research in store, order online • Buy online, return to store © Pulse Commerce 2017 - All rights reserved 3
  • 4. Ship from store refers to fulfilling online orders from brick-and-mortar store inventory Distribution Center Warehouses are stocked with products to be redistributed directly to consumers Ship From Store Retailers can use stock from their store inventory to fulfill and ship orders © Pulse Commerce 2017 - All rights reserved 4
  • 5. Ship from store improves shipping cost and speed, 2 factors that heavily influence online purchases © Pulse Commerce 2017 - All rights reserved 5 Source: Big Commerce, “Omni-Channel Retail in 2017: What Brands Need to Know and Modern Consumer Shopping Habits” 80% Shipping Cost and Speed
  • 6. Benefits – Ship from Store reduces delivery times © Pulse Commerce 2017 - All rights reserved 6 Toys-R-Us: 94% of ship-from-store orders shipped within two days during peak season.1 Best Buy: 2 day reduction in average shipping time after implementing Ship from Store.2 Target: Ship from store contributed to 3-day reduction in average delivery time.3 Sources: (1) Kurt Salman Associates, “Ship-from-Store: If You Haven’t Started Yet, You’re Dangerously Behind.” (2) Stella Service, 1/7/2015, “2014 Fulfillment Coverage, Trends in Shipping, Delivery, Returns.” (3) Stella Service, 10/1/2014, “Target Delivers in Less Than 3 Days Now” Faster Delivery • Deliver from store closest to shopper • Deliver from store when DC out of stock
  • 7. Benefits - Ship from Store reduces shipping costs Lower Shipping Cost 20% shipping cost reductions from fulfilling within the shipping delivery zone Ship from store provides low-cost and high-speed delivery by distributing “warehouses” and effectively putting “fulfillment centers” relatively closer to shoppers. © Pulse Commerce 2017 - All rights reserved 7 Forrester: Retailers with an operational ship-from-store program have the opportunity to ship locally from a store in geographic proximity to the customer’s delivery address…. … Consider that the standard cost of shipping a one-pound package via UPS ground from New York State to California is $7.71, versus $6.24 for shipping the same package within California.”
  • 8. Benefits - Ship from Store optimizes inventory to increase topline revenue and improve margins Inventory optimization Smart distribution from warehouses and stores boosts revenue and margins • Reduce markdowns by shipping from overstocked stores • Ship from stores when warehouses are out of stock • Ship from another store when local store is out of stock Revenue and Margin Increase 30% Online sales increase at American Apparel after starting to use stores as backup fulfillment centers. . 39% online sales bump at Nordstrom’s attributed to integrating online and in- store inventories. Source: Kurt Salmon Associates, Ship-from-Store: If You Haven’t Started Yet, You’re Dangerously Behind © Pulse Commerce 2017 - All rights reserved 8
  • 9. Benefits - Ship from Store increases the number of SKUs available for online purchase Expand Online Assortment Increase available online SKUs without capital investment in distribution centers © Pulse Commerce 2017 - All rights reserved 9 66% of our total unique SKUs are only on our store shelves, not in the warehouse. GameStop saw a 20% lift in sales of goods that were not in the warehouse by allowing customers to view all products in the store online, and letting employees in nearby stores view on-shelf inventory as well. Source: Chain Store Age, “GameStop scores big with Ship From Store”
  • 10. Challenges – Stores must have space dedicated to packing and shipping, and need software to manage operations Physical space and tools • Physical stores are not designed as warehouses. • Retailers must find room for packing tables, materials, and staging. • Software is needed to assign orders, print packing and shipping labels • Employees may only be able to fulfill when stores are empty (off hours) © Pulse Commerce 2017 - All rights reserved 10
  • 11. Challenges – Employees must be trained, and their incentives need to align with offline and online success Employee training and incentives • Employees need to learn picking and packing procedures “Store associates often send out poorly packaged items because they have not been properly trained” – or-- “they do not see their work duty as being a warehouse associate.” • Employees may focus on store customersm “Store associates, especially commission-based employees, sometimes hold back ‘best sellers’ rather than fulfill online orders, to ensure items are available for their clients.” © Pulse Commerce 2017 - All rights reserved 11 Source: Retail Wire, 3/29/2016, “Store Fulfillment Is Creating Associate Tension”
  • 12. Challenges – Visibility into real-time inventory across all channels is required to succeed Omnichannel Inventory Visibility Success hinges on a real-time, integrated, enterprise-wide view of orders & inventory Real-time, instantaneous decisions, include: • Which stores can fulfill the entire order? • Which store is sitting on too much inventory? • Which store is closest to the ship-to address? • If in stock, can our employees find it? © Pulse Commerce 2017 - All rights reserved 12 Source: Practical Ecommerce 6/5/2017, “Ship from Store Fulfillment a Must for Brick and Click Retailers”
  • 13. Resolving Challenges – An Enterprise Order Management and Inventory Platform enables Ship from Store Success Order & Inventory Platform • Real-time inventory visibility and control across the entire enterprise • Intelligent Order Routing identifies the optimal warehouse or store for fulfillment • Streamlines fulfillment with order prioritization, packing slips, shipping labels © Pulse Commerce 2017 - All rights reserved 13
  • 14. Resolving Challenges – Retailers must assign employees to fulfill orders, and decide what KPIs they’re to improve Business Decisions • Staffing: Who will fulfill ship-from-store orders? • Which goals will we seek to achieve? • Expand inventory / avoid stockouts? • Maximize full price sales / Ship from overstocked stores? • Save on shipping costs? The answers will dictate the intelligent order routing rules © Pulse Commerce 2017 - All rights reserved 14
  • 15. Pulse Commerce Order & Inventory Platform © Pulse Commerce 2017 - All rights reserved 15 Pulse Commerce Order and Inventory Platform is the central nervous system of your omnichannel commerce operations, providing unprecedented real-time, enterprise-wide visibility and control of all orders, inventory and customers.
  • 16. Connect with us! Pulse Commerce 855 Main Street, Suite 400 Bridgeport, CT 06604 Tel: (877) 243-3612 sales@pulse-commerce.com Webinars • How to Market and Sell on Pinterest • Building an Effective Digital Loyalty Program in the Amazon Age Pulse Commerce • Learn more about our Order Management Platform Whitepapers • 5 Hidden Costs To Avoid When Buying an Order Management System • Homegrown, On-Premise, or SaaS: Which Order Management System is Right for me? ADDITIONAL FREE RESOURCES

Editor's Notes

  1. For a long time, the concept of brick-and-mortar retail seemed pretty simple: Get people in the store, get product out the door. Now, it’s not so simple. Today, every retailer faces the challenge of serving a customer that’s more informed, connected, and empowered than ever before. Consumers today are increasingly able and willing to shop online and from their mobile devices. Another major challenge for brick-and-mortar retailers is that consumers today are more prone to spend on experiences than material things, such as vacations and fine dining. This is especially true of the millennial demographic, which is quickly growing in spending power while the baby boomers – for a long time, the largest customer segment in retail – go into retirement. So, the most vulnerable target of the e-commerce boom is brick-and-mortar retailers. With fixed costs from labor, fixtures and leases, downward price pressure is problematic. Further, decreased foot traffic makes maintaining (let alone growing) in-store revenue difficult, and it’s nearly impossible for physical stores to compete with the internet’s speed and convenience.
  2. If all your online orders are fulfilled from the DC, your deliveries could be taking longer than needed. Once an order is placed online, you want to get it to the customer as fast as possible. It will reduce the likelihood of a cancelled order, and improves the customer’s satisfaction with your brand’s services. Delivering from the closest store location to your shopper can speed up delivery. It just makes sense that shipping a parcel within 5 miles (km) will be faster than the shipment from several thousand miles (km) away. Plus, if the store is close to your customer, they may just opt for picking up the merchandise themselves. Making it faster, yet. Source: https://www.orderdynamics.com/blog/ship-from-store-7-reasons-need/
  3. In addition, the customer may simply choose to pick up the item for themselves. That provides shoppers with instant gratification, and a ZERO cost alternative to shipping the merchandise. Source: https://www.orderdynamics.com/blog/ship-from-store-7-reasons-need/
  4. It is beyond the bounds of possibility for a fashion retailer to predict the exact demand at a particular point of time. As a result inventory stacks up at wrong locations and the consumers can’t get what they want. Ship-from-store bridges this unhealthy gap Fulfill-from-the-store is operated transparently from the consumer’s viewpoint and helps the retailer to manage their assortment across the chain most efficiently. The outcome is more control, and a higher proficiency to catch and reply to demand. Source: https://www.manthan.com/fashion/using-stores-for-order-fulfillment.html
  5. Ship from store exposes on-the-shelf, brick-and-mortar inventory to a larger online market. A swimsuit stored in the stockroom of a Port Washington, Wisconsin sporting goods store on a chilly day in November might still be sold to an online shopper in Corpus Christi, Texas, where the average temperature that month is about 76 degrees Fahrenheit. Source: http://www.practicalecommerce.com/ship-from-store-fulfillment-a-must-for-brick-and-click-retailers
  6. Physical stores are not warehouses. Nonetheless, retailers will need to find room for packing tables, packing materials, and everything else that goes with fulfilling online orders.
  7. Retailers may need to either hire new employees to manage shipping or train existing employees. Employees will need to learn picking and packing procedures and understand how to balance the needs of shoppers in the store with the need to pack and ship quickly. Source: http://www.practicalecommerce.com/ship-from-store-fulfillment-a-must-for-brick-and-click-retailers
  8. To gain the efficiency and improved turns described in the section above, retailers may need to implement new inventory procedures or invest in new software and equipment.