SUPPLY CHAIN
on logistics costs by holding that item in the back room for faster fulfilment and that you should also be carrying that item in-store .”
While few stores offer the capacity of warehouses , space is less of an issue than one might think , says Baird .
“ For store-as-warehouse decisions , space is a consideration , but most retailers have too much selling space , so rather than consolidating stores they should consider whether it ’ s more cost effective to reduce selling space and increase storage space , knowing that the back room will be used as a supplement to the ecommerce distribution centre .
“ The savings mostly come from being able to promise something like two-day shipping , but without having to pay expedited shipping fees .”
Looking to the future , Baird feels that these changes to how stores are used by retailers to fulfil orders is here to stay .
“ I don ’ t think this is a temporary thing ,” she says . “ I think retailers will have an inventory strategy based on online fulfilment from distribution centres during off-peak but have the ability to transfer demand from online to stores during peak season .
“ When you think about the festive season alone , the shipping cut-offs seem to get earlier and earlier every year . Retailers must still physically move inventory to get it into a customer ’ s hands , whether it ’ s a package on a porch or a customer with a trolly in-store . “ Retailers have for too long operated as if these things are disconnected decisions and operations .
“ There ’ s a lot of money to be made , costs to be saved , and customer satisfaction to be gained by considering them as one process – as a single pool of inventory .” supplychaindigital . com 49