What is in-store fulfilment?
In-store fulfilment, also known as ship-from-store, is an Omnichannel retail strategy that essentially involves utilising retail stores as miniature distribution centres. This allows eCommerce orders to be fulfilled and shipped to customers from either the primary DC or a nearby store. Having multiple options for fulfilment available means retailers can take some pressure off DC’s and offer customers more stock and faster delivery by utilising nearby stores.
Could ship-from-store be a viable strategy during the COVID-19 pandemic?
The use of in-store fulfilment and ‘mini DC’s’ has been steadily growing for years, due to both the continued growth of eCommerce as well as the inherent business benefits listed below. In the current climate of COVID-19, with stores closed and the immediate-future uncertain, leveraging closed stores as DC’s could potentially help alleviate the increased pressure on eCommerce operations and help brands achieve business continuity during this time. The practicality of this will vary between brands and even countries, but its possible a reduced small team of staff could run as an effective warehouse during the coming months.
What are the advantages of using stores as miniature Distribution Centres?
- Takes some pressure off DC’s, meaning a brand can handle increasing eCommerce orders without needing to invest in additional DC’s
- Reduces shipping costs by moving distribution points closer to destination
- Increases delivery speed as orders are shipped from nearby stores
- Idle inventory that is sitting in stores can instead be sold through eCommerce – increases margins by preventing seasonal mark-downs.
- Ship-from-store is an effective and profitable way to prevent inventory stockpiling up at the wrong locations
- Retailers can offer customers more products i.e. not just inventory available at the DC
- Alternative ‘mini-DC’s’ offer fulfilment options if the primary DC is temporarily shut down or disrupted.
- Leverages staff during slow periods for stores or if stores are temporarily closed
- Offers more products/sizes to customers (see figure below)
What is required to leverage stores as DC’s?
Whilst the benefits are huge, getting in-store fulfilment right is a fine balance and requires a certain amount of technology and digital integration across the supply chain. Retailers who attempt to offer ship-from-store (or any omnichannel capability) without these prerequisites will struggle. According to the Accenture study ‘Transforming Modern Retail’, Survey respondents that offer ship-from-store claimed that 31 percent of such orders triggered a split shipment, a result of not having the right foundations in place.
So, what do retailers need in order to utilise in-store fulfilment?
- Inventory Visibility – First and foremost, for cooperation across and between shopping channels, (i.e. for eCommerce to leverage inventory outside of their primary DC) brands need to have inventory visibility across their supply chain and stores. This view of stock needs to be unified between all channels and be as up to date as possible in order to achieve a ‘single point of truth’ for a brands merchandise.
- High Stock Accuracy – Having visibility over all of a brands merchandise is a start, but if this information is not highly accurate, cross-channel initiatives like this one will be fairly ineffective. Retail store inventories can be as low as 70% accurate when it comes to item-level product information. If this is the baseline for ship-from-store, it will result in either split shipments or cancelled orders – resulting in high costs and disappointed customers. For Omnichannel options like this, accuracy needs to be near 99% to confidently offer advanced purchasing options to customers.
- Investment in Stores – To facilitate in-store fulfilment a certain amount of investment needs to be made for stores. This may involve slightly altering the layout of a store, or hiring extra staff, depending on the business. More crucially, investment may need to be made in technology to achieve the accurate inventory visibility required to offer ship-from-store. This may include advanced inventory management technology like RFID.
- Maintained Store Inventory levels – Once this is in place and retailers are utilising in-store fulfilment, care needs to be taken to maintain the balance of store inventory between stock available to be used for eCommerce fulfilment and stock that is available for sale in the store. This is a fine balance to maximise sales between both channels. Retailers must ensure ship-from-store orders do not cause out-of-stocks for the brick-and-mortar store that is fulfilling them.
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Complete Supply chain visibility was once an optional bonus for retailers, but in the modern industry it is becoming more and more of a necessity.
Whilst in the past, limited tracking of shipments in the supply chain was commonplace, in the modern environment with its more complex supply chains, delivery options and increasing customer expectations, retailers need to do more.
This isn’t just us saying so, retailers recognise this too. According to a report by Zebra Technologies, 72% of retailers are working on digitizing their supply chains in order to achieve real-time visibility.
What Is Supply Chain Visibility?
Having visibility means being able to accurately track products and shipments throughout the supply chain, from the manufacturer, to the distribution centre and finally to the store. Having this visibility prevents shipping errors, improves operational efficiency and allows retailers to leverage products to service their customers better.
Why Do Retailers Need Visibility?
Managing supply chains effectively is always a priority for retailers. But as these supply chains get bigger the challenge becomes more daunting. Visibility is needed to align such large operations, and this is before you add new pressures like omnichannel, traceability and online orders.
Additionally, supply chain visibility is arguably even more important in ecommerce than for pure-play brick and mortar retailers. Not only do you need to know exactly what stock the fulfilment centre has, but what stock it is due to receive and when. And since pure-play brick and mortar retailers are now few and far between , this now means that most retailers’ supply chains need to be more advanced and transparent than previously required.
This is before mentioning the divisive omnichannel word, which often requires even greater transparency and synergy between stores and distribution centres and includes multiple delivery options.
There are also more classic supply chain challenges that can be helped by achieving visibility. General inefficiencies and inaccuracies can be reduced by adding more checkpoints throughout the supply chain – particularly when these are done at an item level, and not shipment or carton level.
Adding this visibility also makes better communication between different stages of the chain possible, which leads to smoother operations. Having visibility at an item-level also makes traceability of items through the supply chain possible. This can make a massive difference in combatting supply chain shrinkage, and in some cases the grey market.
The ‘New’ Challenges:
Multi/omni-channel businesses – It seems like an age ago, but traditional retail supply chains went in one direction and to one place – stores. Now almost all retailers also run their businesses online meaning their they operate on multiple sales channels, therefore, their supply chains service far more destinations than before.
Multiple delivery options – A relatively recent challenge created by the growth of online and the already mentioned omnichannel purchasing options. Retailers want to offer their customers as much stock and as many purchasing options as possible, but without the technology to support it, this can cause problems. In an Accenture survey, respondents claimed that 31 percent of their Ship from Store orders triggered a split shipment.
Customer expectations – Customer expectations has shifted. In a 2019 report, it was found that Half of shoppers reported abandoning a purchase due to a lack of cross-channel buying options. This is a major impact on sales, and many retailers are starting to adapt to the change in expectations.
The Old Challenges:
Supply chain inefficiency – Supply chain inefficiencies and miscommunication through “Chinese Whispers” are costing UK businesses over £1.5bn in lost productivity according to analysis of industry data from Zencargo.
Supply chain shrinkage – According to the National Security Survey, businesses in the United States lose $45.2 billion through inventory shrinkage a year. Whilst retail stores make up the majority of this, supply chains still experience large amounts of inventory shrink, particularly when they have no visibility of products.
What are the benefits of having supply chain visibility?
Better customer service
Improved inventory control
Shorter cycle times
Smoother operational processes between stores and DC’s
Better data for more intelligent business decisions
Reduce out of stocks
Track and trace products
Offer effective omnichannel services and delivery options
How Do You Achieve Supply Chain Visibility?
Implement a system that works at an item-level (not whole cartons)
Accurately track products at as many points as possible during shipping
Inbound and outbound counts at every stage of shipping
Implement effective exception handling
Use a cloud-based system to integrate all stages of the supply chain and achieve as close to a real-time view of merchandise movement as possible
Send advanced shipping notices (ASN’s) so warehouses and stores now exactly what they’ll receive
Use this visibility to enable traceability of each item throughout its journey
The Detego Platform allows retailers to gain complete visibility over their operations
If you’re looking for a solution or partner to help achieve better supply chain visibility, consider our platform!
Using RFID item level-tagging, the cloud-based Detego platform gives each individual item a unique digital identity. Items are then tracked from factory to shop floor using radio frequency identification (RFID) methods. RFID makes this possible as inbound, outbound and even exception handling can then be done through RFID reads – which are fast, accurate and can be done without opening cartons.
Since RFID works on the individual item-level, the result of this is complete visibility of the supply chain. The platform utilises the IoT to create a complete overview of every single product in the supply chain, as its cloud hosted this can be close to real-time and is the ‘single point of truth’ for the entire business.
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A single point of truth in retail means having a single view of stock across the business. It means stores and distribution centres aren’t islands of merchandise that are clunkily attempting to share their version of stock information with one another as best as possible. Instead, at the foundation of the business is a unified view of every single product. Because this view of stock covers the entire network, items can move between stores and DC’s and remain in line-of -sight the entire time. This has huge benefits for individual operations and the business as a whole.
A single point of truth for retail inventory must be:
What is gained from having a single stock view?
Delivering a single stock view with RFID
So how do you achieve this reliable and complete view of stock? A single view of inventory starts with the single item. By giving each item an RFID tag, you’re essentially giving it a unique digital identity. This means, using regular RFID reads and sensors, you can easily track the item as it moves along the supply chain. Once it has arrived in a store, the stock becomes far easier to count, monitor and control. Because all this information is stored centrally in a single place, the individual item can be seen by the online store (and its customers) and even neighbouring stores and DC’s. This transparency boosts efficiency and makes cooperation between different arms of the retail operation far easier to manage.
The Detego platform is the single point of truth for retail inventory
The Detego platform puts all this together and delivers a single stock view that can be counted on. Using RFID we effectively digitise every single product in the supply chain and the store network. The information can then be fed into existing systems, such as ERP and OMS. This delivers all the benefits mentioned above, and our in store application guides store staff to effectively capitalise on this complete view of store inventory.
‘Detego is our “Single point of truth” in terms of in-store inventory. As a result, we are able to improve our omnichannel services such as click & collect, returns from e-commerce in the store or directly deliver to consumers from the store in a very efficient way. These are exactly the services our consumers expect today.’
Tobias Steinhoff, Senior Director Business Solutions Sales Strategy and Excellence, adidas
The retail environment has never been more demanding than it is today, thanks to fierce competition, the growth of e-commerce, and consumers’ high expectations for seamless shopping experiences. It’s a situation made even more difficult by a lack of inventory visibility, the complexity of supply chains and the sheer variety of products brands are faced with.
While retailers have access to a growing number of solutions to these issues, RFID (Radio Frequency Identification) is the only one that’s proven to consistently meet retailers’ needs for leaner processes, accurate inventory and real-time data analytics.
This webinar covers:
• The five most important needs identified by retailers and their effect on business
• How RFID-based systems and processes can be applied to solve each need
• What financial and operational benefits can be gained by doing so
• How retailers can further unlock the power of RFID to offer a truly seamless and connected shopping experience
Nowadays, fashion retail is not restricted to one single sales channel only. Fashion retailers rather provide their customers with a whole variety of different channels. Hereby, the customers’ expectations are clear: they demand a smooth shopping experience across all channels. Reliable stock information builds the basis for any satisfied omni-channel customer. A successful “one-face-to-the-customer” strategy can only be achieved with a real-time view on the overall stock; regardless of whether it is being checked in the store, in the franchise store, at the wholesaler or in the online shop. The resulting 100% article availability across all channels guarantees a satisfied customer who may buy again.
Which solution fits everyone?
The one-fits-all approach represents a scalable sizing concept within the fashion industry. Transferred to the IT landscape, the challenge is to integrate all channels in a way that the customer perceives them as one single entity.
Integrated system landscape: Real-time stock view for retailers as well as customers.
Why integrate all channels?
- Brand stores
- Stores of franchise partners
- Concession stores
- Online shop
Customers do not distinguish where and from whom they buy: in the brand store or its online shop, in the department store or in a franchise store. Customers are looking for a specific article and expect a certain price and quick delivery.
System landscape requirements:
- Real-time view on item-level
- Constant updating of involved systems with regards to stock movements
- Central stock view (for stores, franchise partners, wholesalers) on item-level (real-time) as a single-point-of-truth
- Access to stock information for all sales partners in real-time
- Real-time information on item-level also for customers
- Real-time analysis of article movements, aging structure, replenishment performance to optimise article availability
Analysis for everyone
Of course, an evaluation of individual sales channels can be useful to determine its success. However, only an analysis of all the channels, taking into account the entire branch network and all sales partners and online sales, is decisive for the assessment of the collection-, product range- and, above all, the omni-channel success.
Consumer Engagement for everyone
Successful labels roll out their new collections in a multi-channel strategy across all sales outlets. In addition, social media as well as viral campaigns inter-relate with one another. The aim is to offer various touchpoints for customers to interact with brand and articles. A stronger relationship with the brand and more time spent – in the store and in the online shop – lead to more sales.
Detego offers fashion retailers a reliable platform for inventory management, analytics and customer engagement across all channels.
- Scalable: Just as your business requires. Start small. The platform expands itself.
- Modular: In-store management, analytics & reports, consumer engagement – choose what is necessary.
- Flexible: SaaS for switching on and off specific services as needed.
- Manageable: All services on one single platform. Accessible for everyone.
- Economical: Investment protection for the seamless integration of existing systems.
Customers drive retail strategies with their various and versatile demands. They want the ability to shop anytime, anywhere while expecting a consistent brand experience in the store, on the web and using mobile apps. Customers anticipate immediate access on an article’s availability across all channels – and fast delivery! Failure means losing a customer to a competitor. They’re only a click away. Meeting these expectations requires a digital transformation of the stores and efficient omni-channel retailing. But how to implement these strategies successfully? With an intelligent business base.
Since most of the existing IT landscapes in the fashion retail industry by no means adequately support the objectives of an omni-channel strategy, customer centricity or digitalisation in the store, this webinar aims to shows how to set up IT landscapes in a customer- and future-oriented way, enabling to meet today’s consumers expectations, without completely changing the existing IT infrastructure.
Gain valuable insights into how fashion retailers can realise customer-oriented strategies with the introduction of an overall stock view in real-time across all systems.
How does the store change through omni-channel technologies?
Stores have always appealed to the senses, particularly for “seeing” and “touching”. These sensory experiences are now enhanced by interactive, digital touchpoints (e.g. via the virtual endless shelf) which enable us to browse through a complete assortment, to get online recommendations in the fitting room, or to have the possibility of returning online purchased items to a store.
But what does the introduction of mobile, digital signage and IoT mean for the set up of stores and for staff?
These technologies offer a great opportunity for the perfect interplay between product presentation, personal advice and the customer´s desire for self-service, which makes it easier to offer a customer journey that fits well with the brand’s promise. Let´s consider an example: A customer checks the availability of a skirt in a particular size and color via her smartphone before entering a store. When she visits the store, her smartphone shows a 360 degree presentation of her desired article on digital signage. Recommendations of matching items are presented too and she takes them to the fitting room. The “smart fitting room” recognises the articles via IoT technology and encourages her to browse through the complete assortment on an interactive screen. Other sizes, variants or accessories are shown and a sales assistant can be alerted through a wearable device to bring desired articles to the fitting room. IoT facilitates a new way of sales dialogue and service.
What kind of technologies are already out there and which ones are coming soon? What benefits do they offer?
Splitting the store into zones to automatically capture merchandise movements via ceiling readers is already here, as is the analysis of real-time data to optimise the presentation of merchandise and fulfill in-store KPIs. Smart fitting rooms, as an essential link to other omni-channel services, are already being used by some innovative retailers. More exact planning tools are underway and predictive analytics is the future.
Will customers do everything themselves via their smartphones and will there no longer be any store staff in future?
No, but store staff will need to adapt to a new role. Their job and sales advice will be digitally supported. For example, click & collect article reservations will be done via a tablet. Customers will be able to act in an independent manner using their smartphone e.g. to check article availability in real time. If the customer wants sales advice, though, store staff will be there for service and support.
Image sources: Fotolia; Copyright: zhudifeng / AdobeStock; Copyright: Nomad_Soul
The implementation of an omni-channel strategy is a major undertaking. Regardless of whether your company is just at the starting point, in the middle of the project implementation, or already in a more advanced stage, if the foundation for omni-channel retailing is not well laid, the project is doomed to fail. This whitepaper provides 5-basics-checks for the fundamentals of efficient omni-channel retailing. It helps to build a solid foundation for a successful implementation of omni-channel retailing – regardless of the stage your company has already reached in the realisation of its omni-channel strategy. It is aimed to reach practitioners responsible for the omni-channel initiative and therefore those with clear expectations on the cost-benefit aspects of any omni-channel investment. It provides C-levels, Omni-channel-, eCommerce- and Marketing Executives with reflective and feasible recommendations for actions to take for more efficient omni-channel retailing. The Whitepaper focuses on the following omni-channel-services, expected by consumers: availability checks, click & collect, ship-from-store, return-to-store and instore-ordering.
Detego, a market leader in real-time business intelligence for the fashion retail industry, is releasing its latest whitepaper, “Omni-Channel Fashion Retail”, providing a checklist for the fundamentals of efficient omni-channel retailing. It is focused on how retailers can meet customers’ expectations regarding omni-channel services such as “Availability Check” in stores, “Click & Collect”, “Ship-from-Store”, “Return-to-Store” and “Instore Ordering” in an efficient way in order to provide an optimum shopping experience across all channels.
With this practice-oriented guide, Detego responds to the request of many fashion retailers for specific recommendations and actions to take according to the different stages of omni-channel development the companies are currently operating on. In the implementation of omni-channel services, Detego distinguishes between four development stages: the orientation-, the start-, the expansion- and the stability-stage. At each stage, processes, systems and data accuracy are at different levels, which makes the realisation of omni-channel services in lower development stages more difficult.
“In practice, we constantly see that the right basis for omni-channel services is still missing. Therefore, it is not surprising that expectations of a consistent positive customer experience are simply not met. In order to reliably offer services like Click & Collect or Return-to-Store, complete article transparency in real-time across all channels is crucial, not to mention needing the appropriate processes, in-store technologies and involvement of the sales personnel as well,” says Uwe Hennig, CEO at Detego. “We offer fashion retailers a free maturity check which helps identify the current stage of omni-channel development and provides recommendations for the next steps to take.”
The publication is available in English and German language and can be downloaded for free on the Detego website https://www.detego.com/en/insights/download-center.html