February 28, 2008, 12:00 AM

Driving Sales

(Page 2 of 2)

The end-to-end system and process depends on real-time visibility into inventory, which Sears had in place prior to launching order online/pick-up in store. “If you have real-time inventory and a fairly decent level of acuity around it, you can confidently offer this as a service to consumers. If you don’t have it, it’s much more difficult,” Miller says.

The process also depends on integrating: a central hub to receive orders, send them to the right store and generate e-mails to customers; software powering associates’ handhelds and the pick-up area kiosks; and training for associates using the handhelds and staffing the merchandise pick-up area.

Miller says the whole system represents a true interactive multi-channel endeavor. “When most people talk about multi-channel they mean multiple channels: they have stores, a web site, catalogs,” he says. “But this is something that has to be so deeply integrated: the inventory levels, the communications stream, the e-mails are all separate things. That part is the heavy lifting, but when it works well, it’s a very solid experience.”

With thousands of stores as potential pick-up locations, Sears’ program frequently can get merchandise into customers’ hands within a matter of hours of placing an order online. With far fewer stores, REI’s order online/pick-up in store system fulfills orders from its two warehouses rather than store floors, so shipping time from a warehouse to a store must be factored in. That means a product may not be delivered for a few weeks after an order is placed.

REI’s program, launched in 2003, followed a former will-call system in which customers could order an item to be shipped to an REI store to preview there and purchase. When that system ended under Y2K compliance efforts, it created the opportunity to develop a new system that allowed shoppers to actually purchase an item online and have it shipped free to an REI store for pick-up.

Changing destination

Working with the requirements of the online operation, the warehouses and other involved departments, REI built a system that automates the process. That system, with its roots in what first was the direct replacement of will-call, was designed to enable in-store shoppers to place an order at a kiosk and have it shipped directly from a warehouse to a home address.

To that system, REI added the ability to change the ship-to address to an REI store. From a process standpoint, the warehouse picks the order as if it were a direct-to-consumer order, but it then diverts the order to outbound truck shipping lanes, where it’s queued with other merchandise headed for store shelves. Since it’s fulfilling from a warehouse into which it has inventory visibility, REI’s process doesn’t require a real-time visibility for customers on what’s available in a store.

“If it’s not in a warehouse or can’t be back-ordered, we don’t show it on the site,” says Kirk Stephens, director of retail operations.

References to the free ship-to-store offer are placed throughout REI.com. Shoppers considering the option can click on a link that produces a menu showing estimated delivery time to a selected store, based on distance from the distribution center.

The process generates three e-mails to the customer-when the order has been pulled at the warehouse, when the order ships and when it arrives at the store. The last one is triggered when an REI store associate scans the box as it comes off a truck; the item then is moved to the customer service area. On pick-up, customers present the last e-mail or an ID. That scan goes through REI’s point-of-sale system to generate a receipt for signature capture and alert the back-end system the order has been fulfilled.

Store associates in their orientation learn how to direct customers arriving to collect online orders, Brown says, while associates involved in receiving and reconciling fulfillment through the point-of-sale system get specific training.

Surprise

Though the order online/pick-up in store program today runs like a well-oiled machine, the process was optimized only after REI saw how popular it was, Brown says. Initially, many elements were manual. But the rate of customer adoption took REI by surprise. Within months of the rollout and largely through internal development, it automated the e-mails, the receiving piece and the point-of-sale system integration.

Today about 40% of orders on REI.com are picked up in an REI store, and 35% of customers who pick up an online order make an additional purchase in store. And though REI hasn’t done a precise calculation, Brown has the sense of a healthy return on time and effort sunk into the offering.

“We have never done a program-specific P&L;,” he says. “But we’re pretty confident this has added to our business, and without a doubt it’s a great customer service.”

mary@verticalwebmedia.com

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