Idle inventory in stores collects dust—not profits. Meanwhile, out of stocks online result in disappointed customers. It’s important to reduce both. Why? Because increasingly, buyers are choosing to shop online instead of in-store. In fact, in a September 2021 survey, Fluent Commerce found out that 22% of U.S. consumers and 16% of U.K. consumers planned to do more online shopping for the holidays in 2021 than in the previous year. What does that mean for you?
The ecommerce boom is here to stay. That means you need to increase what’s available to sell online, by using store stock. And use ecommerce to drive more sales at full price. That means you need to get Ship from Store right. Yet many retailers struggle to optimize Ship from Store. Let’s look at the two key areas you need to nail.
When a customer places an order online, can you ship it from the store that makes the most sense? Can you manage stock availability across all your stores so both in-store and online buyers are happy?
If you only ship from one or two Distribution Centers (DCs), it’s simple. But when you add ship from store, it becomes complicated. Will you ship from all of your stores? Only the flagships? The store with the most—or oldest—inventory? It all impacts margins. Meanwhile, today’s consumers want more.
Buyers expect an Amazon-like experience. Accurate stock. Fast delivery. They don’t want to hear that an item is out of stock or canceled. Nor that their order is delayed. In fact, late orders are really bad for repeat purchases. How bad?
So you need to extract maximum value from each order, across every channel, region, marketplace, and brand. When you optimize your fulfillment logic to ship from the right store, every time, you’ll increase your sell through rate. And reduce markdowns. But when an order is sent to a store, what next?
Do your store staff have the right tools to pick and pack efficiently? Can they see which orders are the highest priority? And is the pick and pack process the right one for your store? Which is more important for your business, speed or accuracy? If you optimize for speed will your order error rate increase? Or could you eliminate steps, like scan to pick, without it being an issue and just scan to pack?
And what about value added services? If you offer gift wrap, samples, or assembly, it’s important to manage those processes too. What’s more, it’s important to keep your customers informed every step of the way. What else should you look out for?
Imagine an online shopper places an order. Your ecommerce platform confirms that all items are available in multiple locations, so there’s no need to split the order. And your order management system routes it to the best store based on sell-through rates and location. So far so good—until you run into these five common problems.
An in-store customer buys one of the items you need to fulfill that online order. And it was the last one in stock. Now what? Do you split the shipment and fulfill the orphaned item elsewhere, or restock the whole order and reroute it to another location—which significantly increases labor costs?
The solution: Safety stock. By giving yourself a buffer, you can protect both the in-store customer experience, and that of the online shopper by setting a safety stock level below which an item isn’t made available. What’s next?
There are two common reasons why in-store staff are unable to locate items.
1.) An in-store customer may have had it in their basket, or just moved it to another location (which reinforces the need for buffer stock).
2.) The item is stocked in multiple locations in a single store, including special display areas, mannequins, and end caps.
The solution? Provide store staff with location data on picklists, so they can locate items more efficiently.
Online shoppers expect the product they receive to be in perfect condition. If the item is scuffed or looks worn, it’s simply not acceptable. But what if you have stock in your stores that might be saleable at a discount but isn’t suitable for Ship from Store? How do you track that inventory?
The solution: track stock using a different inventory status. By doing so, you can exclude that status from online channel availability.
But at retailers with lots of backend systems that need to be kept in sync, this can be problematic. One system may inadvertently override the status of inventory in another system.
A slightly more manual option? Convert the items that can’t be sold online to a different SKU that is marked down in-store. That way the item won’t accidentally be made available, and customers won’t be disappointed.
While Ship from Store is a great way to augment retailers’ fulfillment capacity, stores are not warehouses. They’re not as efficient, and they have other constraints, like servicing in-store customers. So when ecommerce demand is up, how do retailers manage the flow of orders to stores? How do retailers ensure they can cope with volumes and not miss their delivery SLAs? And does it vary by order type?
The solution? The simplest way to manage store fulfillment capacity is to limit the number of orders sent to each store per day. If you need to maximize the number of orders each store fulfills, you can track orders by status. The reduces overwhelm at stores but also enables them to ship more orders when there is capacity. How does it work?
Against each store location, you might track the number of open orders that need to be picked and packed, and send orders to a store as long as they don’t have too many in process. You might also want to factor in store hours, or extended picking hours (when the store is not open to customers), when your fulfillment logic determines if a store has capacity.
In addition to order volume, some retailers have other capacity constraints, such as equipment availability. In this case, tracking the maximum number of open orders by type can be important. For example, a store may be able to handle 20 open orders if they are standard orders, but only 5 if the order contains bulky products that require special equipment or handling. Other equipment constraint examples include orders that require value added services like assembly or embossing. If you track the maximum number of total orders at each store, in addition to the maximum number of orders of different types, you’ll get greater control over capacity management, and ultimately, your customer experience.
One of the biggest themes we’ve heard from retailers is their need to diversify their carrier strategy. No one wants to be constrained, or have their customer experience negatively affected by a poor carrier experience. But their approaches vary. Some retailers are looking at carrier aggregators to provide diversity, like U.K. based Metapack or U.S. based ProShip. For others it makes sense to build their own fleets or use store staff to deliver local packages.
And for those looking for a more sustainable delivery option in urban areas, there are delivery services like Urb-It that offer crowdsourced delivery via bicycle or public transit. In short, there are lots of options. But while carrier diversity is good, another approach is to eliminate the cost of delivery altogether via curbside pickup.
The cheapest way to fulfill store orders is pickup. No delivery fee required. And for customers, it eliminates delivery delays entirely. What’s more, most retailers we’ve talked to over the past year, both in Europe and North America, have indicated that to reduce the cost to serve, they need to increase the number of orders that are picked up. Buy Online Pickup In-Store / Click and Collect and Curbside Pickup continue to be a big part of their strategy.
Your order management system should allow you to roll out Ship from Store. Quickly and easily.
Fluent Order Management, the leading cloud-native distributed order management system, allows you to do just that. It will provide you with the flexibility needed to support Ship from Store, control over fulfillment logic across all your store types (flagship, dark stores, popup stores) and help you optimize your pick and pack strategy. What other benefits are waiting for you?
What’s more, with Fulfillment Optimization, you can dive deeper into rules that can further optimize your sourcing and allocation efforts. Rules that are flexible, as your business grows. Rules that can be prioritized, as things change. This flexibility allows you to react quickly to consumer demand and ever-changing preferences and provide a premium customer experience.
Want to increase your profit on every order? Fluent Order Management gives you the tools to do exactly that. Let’s dive in deeper:
Fluent Order Management takes business rules to the next level
Dark stores, flagships or popups
Increase staff productivity and engagement
Why are retailers struggling with these five common barriers? And how can retailers prevent these problems and implement solutions?
The main issue is that inventory information lives in different systems and platforms—which are often disconnected from each other. It’s complicated and time-consuming to get a full, accurate picture. But retailers need to be agile if they’re to satisfy buyers’ demand for instant commerce, and to properly manage increasingly complex global supply chains. The old way of cobbling together different clunky systems, coupled with lagging development timelines, is slowing retailers down.
Your solution? A truly flexible distributed Order Management System. One that is agile enough to tweak your sourcing strategies and fulfillment rules, frequently and quickly. One that moves at the pace of today’s needs and is ready to take on future growth and scalability. And one that you can tailor to your business needs.
Fluent Order Management is a powerful, cloud-native platform. Unlike traditional, legacy systems, Fluent Order Management is made to fit your omnichannel fulfillment strategy—and not the other way around. With a flexible API-first architecture, you can scale as needed anywhere around the globe, and be confident in your ability to handle growth.
And with Fluent Order Management Experience (OMX), it’s even easier. It is the low-code platform for order management. Which means it is easy to use, rapid to implement, and seamlessly integrates with other tools. This flexibility enables users to make changes quickly as market conditions ebb and flow.
Another key advantage? The platform enables you to optimize Ship from Store. It is more essential than ever for retailers to improve existing operations. What can Fluent Order Management help you accomplish? You can ship from the right store, every time. And reduce out of stocks online when you apply buffer or safety stocks. Need to deliver faster? The platform can handle that, too, by routing orders to the store closest to your customer. You can even manage dark stores and use them as mini-DCs.
Boost your sales. Reduce your markdowns. All with Fluent Order Management.
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