Over the past few years, brick-and-mortar businesses have felt the threat of Amazon’s fast shipping and low prices. In response, shops are reimagining their supply chains to reduce costs and meet the demand for almost-immediate delivery. As a response, Shipping from Store (SFS) has gained popularity.
Target, Lowe’s, and DICK’S Sporting Goods are just a few of the businesses that have chosen to offer a “ship from store” option instead of the traditional centralized distribution warehouse.
Is this method, designed to cut down on shipping mileage and decrease delivery time right for your business? We’ll look at the pros and cons of SFS to find out.
With Amazon offering more than 10 million items available for one-day shipping, it’s more important than ever to provide fast shipping. Also, Walker Sands’ 2019 report on the future of retail revealed that 77% of online shoppers list free shipping as their number one priority. All of this together makes fast, free shipping a necessary offering.
Shipping directly to customers from a store near them turns every location of your business into a virtual distribution hub. When you ship a product down the street, you’ll decrease delivery costs, increase sales, and improve your margins. And the benefits aren’t just for your business– faster delivery times increase customer satisfaction and the likelihood of repeat business.
All of this sounds great, but is it proven to work? On DICK’S Sporting Goods’ 2020 Q4 earnings call, Lauren Hobart, President and CEO, announced that the company “fulfilled over 70% of our online sales either through ship-from-store, in-store pick-up or curbside” and Ed Stack, Executive Chairman and Chief Merchandising Officer, shared that the company “developed innovative technology, including curbside pickup, that set the pace for the retail industry.” The brand’s transformation of its shipping practices resulted in “sales of over $2.8 billion, an increase of 100%.”
While offering SFS seems like a no-brainer, there are a few things to consider before rushing into action.
Make sure your in-store inventory management protocols are up-to-date and effective. If a customer orders the last item in stock, can your employees quickly find and ship it? Do you have a process for sourcing the item from another store and shipping it seamlessly if the item isn’t able to be found?
Investing in complex software development to match your customers’ location with nearby stores and available inventory isn’t cheap. Will the decreased warehouse space and lower mileage balance out with the costs of the new software to save you money in the long run?
Online shopping is here to stay. With proper planning, we believe SFS has the capacity to revolutionize the way small and large B2C companies sell their products while staying competitive in today’s market.
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