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Inward Investment Guides

Ship-From-Store: the next link in the chain

The war for customers is on and traditional retailers are joining the fight. In a bid to get products to customers at break neck speed, brick and mortar retailers are offering a ship from store option. To do this they are converting their back rooms to mini-distribution centers.

Kris Bjorson, International Director and Head of Retail/e-commerce Distribution, Jones Lang LaSalle (Q2 2014)
Already, 10 – 15 percent of online sales reported by JLL brick-and-mortar clients are currently being picked up from stores. How will this emerging ship-from-store approach impact the larger landscape of supply chain real estate?

The following graphics illustrate some potential ripple effect and opportunities across the larger supply chain. With packages delivered from both e-commerce fulfillment centers (ECs) and stores, and available for pick-up, the links between each point in the supply chain are becoming more complex than ever.
With 60 percent of retailers still developing their omni-channel approach, distribution real estate needs are also evolving.
With 60 percent of retailers still developing their omni-channel approach, distribution real estate needs are also evolving. But one thing is already clear, retailers' appetite for a more fluid, omni-channel network is growing so upstream facility planners need to update today's silo-driven distribution model. They need to work out how warehouse networks can support seamless fulfillment.
With ship-from-store linked in, the back room serves as a satellite between the store and supporting warehouse network, so the distribution center (DC) and e-commerce fulfillment center (EC) still remain critical links in the supply chain. The DCs and ECs continue to manage broader inventory and facilitate delivery but they also support more communication with stores, which in turn reaches more customers. By flattening the network, stores serve as distribution nodes, new ECs help bridge online sales, and strategically located DCs supply them both.
Expand Enabling ship-from-store strategies with industrial real estate support also optimizes the entire supply chain's delivery capacity.
Close Enabling ship-from-store strategies with industrial real estate support also optimizes the entire supply chain's delivery capacity.
Enabling ship-from-store strategies with industrial real estate support also optimizes the entire supply chain's delivery capacity. It aligns the existing DC network with new ECs and store locations. These new back room and EC locations have strikingly similar priorities.
They must include access to integrated IT infrastructure, have proximity to population centers and ground sortation hubs, as well as truck/dock accessibility. With the right industrial real estate configuration, fulfillment flexibility becomes standard.

Adjusting the supply chain to leverage ship-from-store strategies in appropriate markets could ultimately make the whole supply chain stronger, allowing all the links to achieve those ambitious industry delivery standards.
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