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Editor’s Note: This post was originally published in April 2019 and has been updated for freshness, accuracy and comprehensiveness.
Retail ship-to-store is an option merchants can use to provide in-store pickup services — click-and-collect or buy online pickup in-store (BOPIS). Merchandise from a distribution center (DC) or alternate fulfillment node is shipped to a store for customer pickup, as opposed to the order being fulfilled with stock located in the store for customer pickup.
From a customer’s perspective, there is no difference between an order that is fulfilled from a warehouse/DC and shipped to a store versus an order that is fulfilled with in-store inventory. The process for the customer is the same. In both cases, the customer opts to pick up in-store and usually gets ‘free shipping’ regardless of the order size. The difference comes into play on the merchant’s back end process.
The problem with a pure ship-to-store strategy is when merchandise is shipped to a store for a click-and collect order, but that store already has the items in stock. This can be viewed as a waste of delivery resources. In any case, although it is not as ideal as leveraging in-store merchandise to fulfill pickup orders, it is an improvement over not providing the service at all.
The optimal way of fulfilling click-and-collect orders is with a robust order management system that employs advanced dynamic order routing rules to identify the optimal location of the stock. If the requested stock is available at the store, it will then use the physical store inventory to fulfill the pickup order. The advantage of this method is that it completely cuts out the shipping cost — both internal and last mile.
If the brick-and-mortar stores do not have the inventory, the merchandise can be routed from the distribution center or another location capable of fulfilling the requested quantity (another store for example) and shipped to the retail store of choice for the customer.
Both options frequently result in additional sales while the customer is in your store. In a basic form, retail ship-to-store resembles a full click-and-collect/BOPIS offering. While the process between the two is different behind the scenes, from the consumers’ point of view, they should NOT be able to tell the difference.
In short … because customers are demanding it. It results in incremental upsells and more retailers are embracing customer choice and omnichannel solutions.
Additionally, it is an easy way for most retailers to provide BOPIS (buy online and in-store pickup) with lighter order management technology. However, as pointed out earlier, when a store already has ample supply of an item, it is a waste of resources to ship yet another of that same item to the store.
Therefore, while it is better to offer BOPIS though retail ship-to-store as a light omnichannel option versus not offering BOPIS at all, ship-to-store is not the optimal solution. The best option is to implement a robust order management system will allow you to protect stock for walk-in customers while also allowing you to clear merchandise from a location that may be overstocked.
Store fulfillment basically means delivering goods to customers by leveraging stores as an asset. From the customer perspective, it may be a way for them to avoid shipping fees. Retailer offers should encourage in-store pickup, as they too share in the cost of shipping goods when the customer reaches the free delivery threshold.
Retail ship-to-store is just one fulfillment tactic in the omnichannel retail set of options. It is a good way for retailers who do not have an omnichannel retail offering to get into the game. From a technology perspective, however, an advanced order management system will only use retail ship-to-store as one fulfillment option among a variety of other fulfillment options.
Ship-to-store should be viewed as a starting point to build your omnichannel offering from. Get your click-and-collect processes up and operational in the best way you can. Then keep building your systems to provide a fully functional BOPIS process that encompasses multiple fulfillment methods. A strong next step would be to explore the implementation of a solid order management system solution like the Tecsys Omni™ OMS solution.