Ship from store: the new normal for retail
By David Grimes, CEO and Founder, Sorted
The concept of ship from store isn’t as old as the Santa Maria, but it’s certainly not a new voyage of discovery.
It has been a valuable tool in the arsenal of retailers to streamline the supply chain, improve the customer experience and reduce cost by shipping from stores instead of from warehouses. As a result, retailers have been able to compete with online more competitively and put stores, stock and staff to good use.
But for a sector that has experienced years of rapid acceleration driven by increasing consumer expectations around fast, convenient and flexible delivery, its real value is only just being realised.
Choppy waters of Covid
The impact of Covid-19 has been widely documented, particularly in retail where bricks and mortar stores were forced to close, high streets left deserted and people’s lives were disrupted.
However, the flip side to this is a world where consumers - and therefore businesses - have been forced to go online-only almost overnight because the pandemic created a demand for discretionary goods and upped screen time exponentially.
This shift is going to have long-term ramifications and retailers will need to take these new consumer behaviours into account as the dust settles and as the lines between online and in-store become increasingly blurred.
If it wasn't apparent before, e-commerce and the connection between physical and digital is no longer a nice to have. It is now an essential insurance policy - a way to keep sales from stopping entirely, particularly for those that previously preferred to shop offline, like baby boomers and Gen Zers.
Pivoting in a pandemic
The market data is reinforcing this notion. According to the Global Connected Consumer Index Report, a survey of 5,000 consumers in North American and Europe, 29% of consumers say they now shop more online than in-person.
Meanwhile, Incisiv and Manhattan Associates found that 80% of shoppers expect to increase ship from store over the next six months and 85% of shoppers have significantly increased this habit since the pandemic began.
Research from Statista shows that 54% of high street shoppers already demand flexible delivery options. Little surprise then that, according to OC&C Strategy Consultants, the home delivery and Click and Collect market will double at the expense of purely in-store retailers by 2025.
We don't need to look very far to see how this trend has manifested in 2020. There are many examples of businesses of all sizes that have made this pivot during the pandemic. In the UK, supermarket Sainsbury’s repurposed its now-closed store at Blackfriars as a hub to fulfil orders by bicycle.
A lasting legacy of convenience
It’s clear to see that the pandemic will leave a lasting legacy of convenience. Providing convenient, fast, easy and personalised ways for the consumer to buy while offering something that maximises localised venues, knowledge and space is a win-win and something of a no-brainer.
But to establish itself as a key element of the retail function, ship-from-store must also evolve. Stores were never designed to act as fulfilment centres so some may need an ergonomic makeover to be fit for purpose.
Similarly, some supply chain, distribution and delivery networks may need improving to be as fluid, rapid and consumer friendly as the stores require them to be.
“As much as the last six months have reinforced a 21st century need for speed and convenience, it has also accentuated our most basic human drivers that were conspicuous by their absence - to innovate, to react to our environment and adapt to change”
For ship from store to work, retailers need to be able to rely on their delivery partners and courier network with total faith. Similarly, delivery networks need to evolve to understand the best pick-up and drop-off routes that work for each location and store networks. In this day and age, a one-size-fits-all approach will not suffice.
Above all else, the ship from store model hinges on inventory accuracy. Accurate stock information will make or break the success of this initiative. If stock accuracy is poor, it leads to a lot of cancelled or misplaced orders.
It also means bouncing either order or product from store to store with the likely result of an unhappy customer with a delayed, or even undelivered, parcel.
Without a real-time view on which stock is where, it’s impossible to know whether the store can fulfil the order and therefore the customer promise. In fact, ship from store is designed to help inventory positions because retailers do not need to buy as much e-commerce specific product if they can ship from stores as well
The white knight for retail?
But be under no illusion, ship from store is not the white knight for high street retailers. Unless stores offer consumers a compelling value proposition, store traffic, which was already thinning in pre-coronavirus times, will slow to a trickle.
Consumers are now accustomed to staying home for weeks at a time and buying a wide range of products online. In the future, they won’t visit stores unless retailers give them a good reason to, so it’s a trend we’re only going to see more of in future.
Retailers must gain a deep and up-to-date understanding of customer preferences, envision a new role for their stores in light of these preferences, and execute surgical changes to store formats. More than ever, stores need to offer unique customer experiences instead of simply serving as transactional venues.
This means ship-from-store is only part of what needs to be a wave of innovations to upgrade the shopping experience.
This includes everything from providing access to exclusive merchandise such as “in-store only” and “in-store first” product launches to investing in training so that store staff can guide customers at the start of the product-discovery journey and carry on that interaction post-purchase.
A burning platform for change
The coronavirus crisis has escalated the case for change for retail into a proverbial ‘burning platform’ and ship from store is certainly one of the solutions.
Forced upon us by Covid-19 or not, it has great advantages for brands, retailers and consumers and must be a cornerstone of retail beyond 2020 because it is about more than merely surviving a pandemic and defending the deluge of digital titans - it’s an evolution of the retail model and how the world shops.
As much as the last six months have reinforced a 21st century need for speed and convenience, it has also accentuated our most basic human drivers that were conspicuous by their absence - to innovate, to react to our environment and adapt to change.
Ship from store blends this collision of our evolution seamlessly and is why every retailer should be all aboard its adoption.
