How Retailers Can Compete With E-Commerce Through Warehouse Fulfillment
Competing with Online Giants:
Retailers can combat being edged out by e-commerce by utilizing the latest innovations in warehouse fulfillment. As retail evolves, so must supply chains. Since brick-and-mortar retailers are increasingly expected to function as quickly and seamlessly as online brands, retailers are turning to logistics providers with in-store fulfillment options to create seamless, cross-channel experiences. In fact, according to Forrester research, “Retailers experience a 10 percent to 30 percent increase in online conversion rates when they offer to ship from the store.”
For a warehouse management system to be competitive, it needs to be multi-functional, with the capability to replenish orders in-store and to ship DTC (Direct to Consumer) for online customers. DTC order fulfillment is increasing in popularity, largely because once the DTC system is put in place it requires little to no daily work from the retailer. DTC order fulfillment is also popular because it is minimally invasive — orders are processed and shipped from the warehouse, which frees up store space and store employees.
Buy Online Pickup In-Store:
In-store fulfillment options such as BOPIS (Buy Online Pickup In-Store) and Ship-From-Store, take the opposite approach by involving store employees in the fulfillment process. BOPIS enables retailers to compete with short shipping times offered by e-commerce giants like Walmart and Amazon by offering customers same-day order pick-up with minimal human interaction. Not only does BOPIS let customers pick up their order within hours of purchasing, but it also cuts out shipping costs for the consumer. According to a January study by Internet Retailer, 57.5 percent of U.S. shoppers say they currently use BOPIS or click and collect.
However, BOPIS isn’t necessarily the most lucrative option for retailers, or for store associates. Sorting and packaging items for BOPIS pickup adds to store associates’ workloads. Retailers have yet to find a method of commission attribution for online orders, so employees often aren’t compensated for the extra work. Since retail stores are already understaffed, many retailers can’t afford to have associates distracted with filling orders, thus missing out on sales and customer interactions. Another criticism of BOPIS is that the ends don’t justify the means. A recent study by Order Dynamics estimates that BOPIS orders add an extra .4 percent to 1.8 percent total revenue increase per year.
In order for retailers to compete with e-commerce through warehouse fulfillment, they need a comprehensive, multi-platform warehouse management system. Offering products through multiple platforms enables retailers to sell to the customer through the channel he or she prefers to buy. For instance, while DTC shipments may be the best option for a retailer’s out-of-state, BOPIS may be the best option for local customers.
Multi-platform solutions, such as Highjump Retail Advantage, do in-store fulfillment, as well as tracking inventory. When a customer places a BOPIS order, Highjump software then directs retail associates to where the inventory is located, and automatically places an order to the warehouse for replenishment once that order is shipped. This reduces demands on retail associates’ time, and turns stores into local warehouses — reducing shipping costs and delivery time.
By empowering customers to shop across channels, multi-platform logistics providers create loyal customers; and maintaining customer loyalty creates the biggest ROI.