Over the last few months, I’ve done extensive research on omni-channel fulfillment processes and technologies. One of the findings from my study was that one of the biggest questions retailers face when they move to an omni-channel initiative is where to start? With the continued growth in online shopping, retailers are trying to figure out how best to fulfill e-commerce orders. From my recent survey, distribution centers are the most common method for fulfilling e-commerce orders – 63% percent use a traditional DC and 46% use a web-only DC (respondents could choose more than one option). The third most popular method is to fulfill from the store (43%). There are two main options for store fulfillment: in-store pick-up and ship from store.
The majority of companies adopt a combination approach to store fulfillment. First, 68% of survey respondents pick orders at the store and ship them directly to the customer. To the customer, this experience is no different than if the retailer was shipping from a DC; the order shows up at their door at a specific time. The overall process of ordering online and having the product delivered does not change. The second method, adopted by 64% of respondents, is to pick items at the store and hold them for in-store pick-up. This is the method that most consumers are familiar with. Retailers have two options for picking store items: front of store and back of store. Picking orders from the back of the store means associates are picking items at the stores before the inventory hits the shelves. The other method is to pick items from the front of the store, which involves a store associate picking items from racks and shelves out on the store floor. Updating and maintaining accurate inventory counts be-comes more difficult as store merchandise is picked.
The other alternative for store fulfillment is to have orders shipped to the store from a DC for customer pick-up. This requires some of the same processes as regular in-store pick-up, with an added layer of coordination between the store and DC. 46% of survey respondents indicated they use this type of process for in-store fulfillment.
The majority of retailers now offer in-store pick-up as part of their e-commerce experience. Many retailers do a great job of it, while many others fall short. LL Bean, the Freeport, Maine based, clothing and outdoor equipment retailer, is a prime example of a retailer making the overall process easy for in-store pick-up. First, the company offers free shipping on all purchases, with no minimum thresholds to cross. So for those customer who do not want to step foot in the store, there is that benefit. However, sometimes you need something sooner than they can ship it.
For example, I needed a new pair of boots recently. I found the style and size that I wanted and chose in-store pick-up. Before adding the item to my cart, I had the option to check inventory for in-store pick-up. LL Bean allows you to check the inventory at every single store from a drop-down menu. Since there are a few stores in my general area, I was able to see which one had the boots in the right size. The inventory levels are updated in real-time, and time-stamped so you can see when they had the item you wanted in stock. At this point you can reserve the item with your name and email address and the company will email you to let you know when your item is ready for pick-up. You pay for the item in the store, and if you fail to show, they release the item back to general merchandise after two days.
The only downside to the LL Bean experience is where to pick up the order. Online reservations are held at the bank of registers, so if there is a big line, you’ll be waiting to get to the front of the queue. Some retailers, such as Best Buy, have a specific location to pick up online orders. This separate pick-up location makes it easier for the customer to figure out where to go upon entering the store.
LL Bean is doing a great job of seamlessly blending the in-store and online experience with their in-store pick-up processes. As more and more retailers move towards this model, there are a few things to keep in mind. First, make things easy on the customer. Providing visibility into real-time inventory levels at the store ensures the item will actually be there when the customer shows up. Second, communicate with the customer. Providing timely communications when the order is accepted and ready for pick-up will help the customer to schedule their day accordingly. And third, really make things easy! The customer should not feel lost when they arrive at the store to pick up their order. Clear signage and a designated pick-up area will go a long way towards customer satisfaction.