Posted: Lisa Brown | December 21, 2014


Ship from Store Concept Proves Effective in Retail Battle with Amazon

newswriter_main3Brick and mortar retailers are striving to better integrate stores and e-commerce channels. So a retailer might support buy online, pick-up at store; or order online, deliver to home from a store, however, several other fulfillment paths are also possible.

One omni-channel fulfillment strategy is perhaps the most promising one: known as Ship from Store. Instead of fulfilling Web orders from warehouses hundreds of miles from shoppers' homes, companies including Wal-Mart, Best Buy and Gap are routing orders to stores nearby. Store employees pick products from shelves, pack them into boxes and drop them into waiting FedEx and UPS trucks that zip off to homes a few miles away.

The Ship from Store concept saves money through shorter delivery routes. More important, it speeds deliveries, avoids costly markdowns and recoups sales that have been lost to Amazon, the world's largest Internet retailer.

This ship from store strategy won't be easy. In order to intelligently allocate inventory from stores, retailers need to implement a technology platform known as distributed order management (DOM). Walmart is investing $430 million in what they call its "global-technology platform." A major piece of the investment will be in a proprietary DOM, although commercially available DOM solutions can be bought from companies such as Manhattan Associates, Oracle and IBM (Manhattan Associates and Oracle are ARC customers).

Secondly, retailers need to be able to execute the "perfect order" from the store. This means they need to implement, in effect, miniature warehouse management systems (WMS) in the back room of their stores. A WMS is a real time fulfillment solution that can insure virtually 100 percent accuracy in picking, something that will be very difficult to achieve if picking is done in the front of the store or if the store does not use "WMS light" type solutions.


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Written by Lisa Brown

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