From stores to omnichannel hubscan “ship from store” blur the line between online and offline commerce?

Christmas is close, so it’s a good moment to stand still and look back at what happened in the last 12 months. I am working in the world of retail technology for more than 12 years now and at least one thing did never change: shoppers want to buy anywhere and anytime. This omnichannel world offers a lot of opportunities for customers and thus also for retailers. But one thing that puzzles me continuously is why so many retailers still do not really listen to their clients. What becomes more and more clear is that convenience is the decisive factor. Shoppers want to buy as easy and as convenient as possible. Or as my colleague Hilbert Dijkstra was putting it in his latest blog: shopping should be as easy as ordering a pizza! 

The “Click & Collect” dream has faded to grey
Over the recent years, many retailers have put a lot of hope and effort in introducing “Click & Collect”. However, what we see now is that the adoption rate of this service is low and shoppers are often unhappy with the way the service works. In fact, if shoppers are forced to pay their desired items in advance, cancellation rates during the online purchase are high. Vice versa, pick-up rates of items in the store are low if items haven’t been prepaid. Even if shoppers chose “Click & Collect”, the pick-up process itself is often a disappointment as most retailers have “hidden” pick-up points at the very end of their sales floors. In the end, the store often just serves as a parcel pick-up station. 

Zara shows the way
With the opening of its latest store in Milan, Inditex defined a new role model for the concept of online and in-store integration. According to the company, 1000 shops in 25 countries are already connected to eCommerce channels and by end of this year, the stocks of all Zara stores worldwide will be merged with the online channel. Consequently, all merchandise from their “brick & mortar” stores will be available online. 

We want to make our fashion collections available to all our customers, wherever they are in the world.” – Pablo Isla, CEO of Inditex

Closer and faster: stores become „omnichannel hubs
Looking ahead to the coming year, a lot of brands and retailers are actively working on introducing “ship from store”. This service has the chance to become a strategic factor to meet the shopper anywhere, as delivery capability and speed are increased. Especially connecting the stock of the stores to the online channel increases the range of available products. Also, product margins can be improved by reducing seasonal leftovers, thus the stores can sell more full-price goods. And another nice fact for the retail side of the business: sales can be calculated as a “store turnover” and are therefore the basis for the calculation of commissions.  

“By the end of the year, more than 600 physical stores will be connected with our platform” – Carsten Keller, Vice President of Zalando 

RFID is the key technology
The basis for such a shopper friendly service is an integrated stock management and the availability of accurate and real-time stock information. This works as follows: As soon as the online shop recognizes that a certain item is still available in a store, the online order is forwarded there. Store staff will receive a message on their smart mobile devices. Subsequently, the item can be located with RFID assistance, then packed and sent to the customer. Optionally and based on RFID data, the system can exclude the items that are on display and only use items that are in the stock rooms to prevent that an item might be sold twice at the same time – both online and offline. 

Make products simply available
It’s as simple as it is: shoppers expect to have it easy. To offer a positive shopping experience, full access and availability of products is a key success driver. From the customer’s perspective it’s logical to combine offline and online stocks in order to ship the products to their home. In that context, shoppers want to just “click” instantly and not be bothered with additional complications. I expect that we will see a situation where brands and retailers compete for the best shopping experience, based on new services. In that context “Ship from Store” will play an increasingly important role within the “omnichannel journey”. It will definitely be another exciting year for retail technology!

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About the author: Tom Vieweger

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