Ship from Store, an essential inventory utilisation process.

Ship from Store, an essential inventory utilisation process.

6th February 2019

Following on from last week’s article on pick in store, we are going to pick up where we left and go into discussing ship from store.

Ship from Store is a key process where retailers utilise their stores to fulfil orders for primarily the ecommerce channel, marketplace channels, other stores (essentially turning each individual store into a distribution centre), to send direct to the customer, either domestically or internationally or by way of click and collect. Like pick in store, the benefits of ship from store are plentiful, retailers will receive a globalised stock view, lowered overheads, reduced markdowns, increased profits and deliver greater customer experience. Customers, on the other hand, will receive and benefit from a greater customer experience with less stock outs and brand engagement.

‘A third of consumers (33%) are now choosing to buy from brands they believe are doing social or environmental good’ (Unilever, 2018) and are purchasing products which are typically made of eco-friendly products which have a lower carbon footprint. Nielsen report that millennials are most likely to make purchases based on environmental factors and eco-friendliness. Typing in a simple google search with the question, ‘is online shopping more environmentally friendly than going to the shop’, automatically returns the answer ‘yes’. As more consumers turn to eco-friendly options and online shopping in a bid to reduce their own personal carbon footprint, global companies are now recognising this and pledging to offset their carbon footprint and aiming to have a carbon footprint of zero. In some cases, for example the IKEA Group, retailers are pledging to produce as much renewable energy as it consumes (Bain, 2018).

From an environmental perspective, there are three areas in which utilising ship from store can aid the environment, retailers and their company reputation.

By using ship from store, it allows logistic companies to plan more efficient and localised routes for the last mile journey of the order (USPS, 2018).  By allowing this, a smaller amount fuel is consumed and therefore vehicles, which tend to be less efficient, emit less pollution. In turn, this reduces the carbon footprint of the product and the overall carbon footprint of the company.

Retailers, armed with an improved visibility of stock, can utilise stock and reduce the number of markdowns. This factor combined with lower logistical costs, each product becomes more profitable for the retailer.

From a marketing perspective, a company associated with engaging in ‘green’ activities and are actively working on their corporate social responsibility (CSR) are also more likely to improve their perceived company reputation. In their report, Unilever (2018) suggest that one in five (21%) of the total number of people surveyed would opt for a brand who made their sustainability credentials clear on their packaging and in marketing campaigns. A better reputation with the general population, especially millennials (Financial Times, 2017), will position the company higher in the mind of a consumer.

Next week we will be sharing our experiences with Click and Collect… see you next week!

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