Today’s customers demand flexibility and excellent customer service across every channel, whether you are purely brick-and-mortar or e-commerce. But increasing customer demand means increased complexity. Complexity for retailers with unique omni-channel operational challenges.
To add to this complexity, 71% of shoppers now expect to be able to access in-store products online and 50% want to be able to buy online and pickup in-store.
However, many retailers still haven’t implemented the basics such as store pickup, cross channel inventory visibility, and store fulfillment.
There is a disconnect between what consumers want and the omni-channel capabilities that retailers are willing to offer.
While providing an omni-channel experience has been on the radar for years, for many retailers, executing on that strategy has not come into fruition.
The good news is that there is a solution. Industry analysts have concluded that retailers should fulfill and ship orders from store. This is known as in-store fulfillment.
What is in-store fulfillment?
In-store fulfillment is the ability to fulfill an order — no matter its origin — from a brick-and-mortar store. This is essentially transforming the traditional retail store into a warehouse and distribution centre.
This is an advantage that brick-and-mortar retailers have over e-commerce stores that is often overlooked - more and better located distribution centres.
However, there are a lot of considerations and crucial components of successfully implementing in-store fulfillment and providing a consistent omni-channel experience.
The advantages of in-store fulfillment
Implemented successfully, in-store fulfillment offers retailers an extensive range of benefits. These benefits include:
Decreased shipping costs and increased speed of delivery by moving distribution points closer to buyers
Boost gross margins on idle inventory items that sit in-store and avoid the need to mark down prices
Prevent inventory from stockpiling up at the wrong locations
Increase product selection available to consumers regardless of stock location
Manage product assortment across the supply chain more efficiently
Becoming more agile in response to demand
Fulfil increasing e-commerce orders without building new distribution centres
Compete with e-commerce giants by providing a more personalised experience with the same convenience
The challenges of in-store fulfillment
One of the biggest challenges for retailers looking to implement in-store fulfillment is that current retail systems don’t support the functionality required to operate fulfillment centres or provide end-to-end visibility into inventory and customer orders.
Below is a look at the biggest challenges facing retailers looking to become omni-channel providers:
Source: HighJump
Unsurprisingly, implementing and maintaining the right technology infrastructure is the biggest challenge for retailers.
The current state of many retailers’ supply chains is channel specific, and channel-specific DCs are responsible for maintaining their inventories.
However, industry analysts have predicted that the next phase of transformation for retail will entail business processes and IT catching up to tackle the omni-channel challenge with tangible, systematized solutions.
With this change, retailers will need a retail order management system that integrates with POS, e-commerce, ERP and other retail systems. In addition, effectively supporting order fulfillment in a omni-channel retail store environment requires the optimisation of fulfillment processes, real-time inventory visibility, and systematic returns management.
However, these capabilities are not typically supported by retailers’ existing systems.
Conclusion
In order to successfully implement in-store fulfillment, retailers should look to invest in a technology solution that caters to the many challenges of an omni-channel environment. This solution needs to be able to provide all the tools needed to set up an in-store fulfillment operation. These tools include order capture, store mapping, work queue management, wave planning, and real-time inventory tracking.
The right technological solution will open up opportunities to increase efficiency through standardised processes, inventory moving faster, optimisation of the in-store labour force, decreased overhead costs, increased in-store traffic and consumer spending.
Talk to us about implementing an in-store fulfillment solution today.