The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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As extra assurance that online customers won`t arrive at a store to find it without the ordered product, retailers offering store pick-up maintain a safety stock to assure sufficient supplies for both online and in-store customers. When Sears.com indicates that a product is available for in-store pick-up, for instance, there are usually least five of those products in the store, Christopher says.
At Sears, where the size of its stores heightens the challenge of locating and setting aside products, store pick-ups are now available within one to two hours of when an order is placed online. Sears relies on IBM`s MQSeries middleware software that transmits data from the retailer`s BroadVision e-commerce platform to each store`s inventory management system.
As customers shop online, the middleware provides real-time updates throughout the day of store inventories. "We changed from an overnight batch process to real-time updates throughout the day," says Bill Bass, vice president and general manager of Sears Customer Direct. If shoppers see "available for in-store pick-up" when placing an online order, they can choose among three stores within their designated area, he says.
As store warehouse employees see requests for store pick-up arrive in their inventory systems, they use web-connected handheld devices from Symbol Technologies Inc. to view order details. The handheld also provides information on the in-store location of products, including on store shelves and in backroom storage. Once the employee locates the product and sets it aside for customer pick-up, he clicks a link in the handheld to send a confirmation e-mail to the customer.
In cases where the employee can`t find an ordered product, he`s expected to seek help from a manager-a process designed to prevent workers from giving up a search, Bass says. If a product still can`t be found, the manager may then suggest an alternate product or offer to put the requested product on back-order. Only a manager can report that the item is out of stock, a procedure which Sears describes as an "anti-lazy device" to keep a harried store clerk from just pressing the out-of-stock message.
One of the key issues to resolve in making store pick-up work for online orders, experts say, is getting cooperation from employees, which can require new methods of granting credit for sales. "Everybody is struggling with who gets credit," says Sunita Gupta, vice president of retail consultants LakeWest Group Ltd. in Cleveland. "Some retailers say it`s best to give their e-commerce operation the full credit for the sale, but others say that`s not fair if a store has to hold the inventory and fulfill the order."
One option, she adds, is to credit each channel for meeting their respective sales goals, then split the credits during the accounting process. A similar policy is in force at Circuit City. "We give the web team full credit for the sale and we also give the store team full credit," Dias says. She adds that store employees have displayed a positive attitude about handling online orders as a way of increasing overall sales, and even express interest in talking with customers about how they shop online compared to in stores.
At REI, store employees have played a key role ever since the idea of store pick-up was generated over a year ago, says Broughton. "We pay a lot of attention to our employees in the stores, because they`re with the customers every day," she says.
Since June 2003, REI has been letting customers order online and request free shipping to an REI store. Customers can now also order online at in-store kiosks and get free shipping to the store. Because REI loads online customers` orders onto the next truck scheduled to make a regular delivery to the requested store, it doesn`t have to charge an extra shipping fee.
Tapping employees` ideas
Store employees generated the idea for a store pick-up system after noting that it was difficult for them to suggest that customers place orders online and pay for shipping for products they couldn`t find in the store. "That`s a hard thing to have to tell customers, so store employees asked if there was a way customers could order online and not have to pay for shipping," Broughton says.
REI continued to involve employees from multiple departments as it rolled out its store pick-up program. Employees from the online, store, customer support and other operations worked along with IT staff to devise the system, which uses MQSeries middleware to connect in-house order management and inventory management systems. "We had people from every part of our business so we could understand what level of service was needed," Broughton says.
One challenge REI stores are still dealing with, she adds, is how to make room for merchandise ordered online. Part of the answer is coming out of discussions store employees have had with distribution center employees. For example, the latter now specially label packages designated for store pick-ups and separate them from other store shipments, making it easier for store employees to quickly process store pick-up orders when customers arrive.
Store pick-up services will continue to evolve, as retailers see more opportunities to leverage multi-channel opportunities, experts say. Sears, for instance, is planning to introduce next year third-party pick-ups. With new risk management procedures it declines to detail, Sears will allow shoppers to order online products to be picked up by someone other than the buyer, a policy that could support gift-buying, for example. "A father in Chicago could place an order online and his son in college could pick it up at a Sears store in California," Christopher says.