Mobile accounted for 25% of Ulta's e-commerce revenue during Q2.
It’s not easy, but it can be done with the proper technology, an IRCE speaker says.
Fulfilling online orders from stores allows merchants to distribute inventory so it’s not sitting in a warehouse, leverage store personnel and test products with actual buyers. But that approach to fulfillment has its own challenges, and retailers must analyze their own situations to make fulfill-from-the-store work for them.
That’s the message Jason Merrick, director of e-commerce for Peter Glenn Ski and Sports, will deliver at the Internet Retailer Conference and Exhibition 2013, June 4-7, in his session “Leveraging your store base for e-commerce fulfillment: How to make it work,” on June 5 at 2:30 p.m.
One of the keys to making fulfill-from-the-store work, Merrick says, is managing complexity. Fulfillment managers have to be aware of the inventory level at all stores and the sales record for each product at all stores. With that knowledge, the web operation will fulfill products from stores where the product is selling more slowly and avoid fulfilling from a store where the product is moving fast, thus depriving that store of a possible sale. Technology plays an important role in those decisions, as Peter Glenn uses algorithms to assist in deciding which stores to fulfill from. Stores rotate through the fulfillment process depending on inventory level for each product at each store.
Stores’ technology also must link into the e-commerce system. When Merrick arrived at Peter Glenn, the store fulfillment process involved calling a store to see if it had the product, then faxing the order to the stores, where staff re-keyed it into the point-of-sale system. "It was inefficient and a pain for the stores, so was costing us money and morale," Merrick says. Once the company installed the appropriate technology in the stores, the chain was able to fulfill twice as many orders at half the cost, Merrick reports.
While fulfilling from stores is an important way to round out inventory availability, not everything in a store should be available to web buyers, Merrick cautions. For one thing, warehouses are designed to fulfill orders more efficiently for smaller, lower-priced items. Additionally, stores need inventory to demonstrate to shoppers the breadth of merchandise available and to communicate that the store is in fact a ski shop. Peter Glenn likes each store to have at least one of each kind of snowboard, for instance. “We want that presentation of merchandise so the store looks like a ski shop,” Merrick says.
Each store also employs a staffer whose job is to fulfill web orders. Peter Glenn keep managers and assistant managers up to speed on the latest fulfillment techniques and expectations by bringing them to headquarters periodically to meet with e-commerce and warehouse staff. Headquarters e-commerce staff monitors open orders to ensure that orders are moving out the door quickly. Store managers’ bonuses are based in part on the accuracy of shipments from the stores.
Another issue that managers must address when fulfilling from stores is compensation for store sales personnel. Many store associates live on commissions and they may see the web site as taking sales from them. “It’s totally an issue,” Merrick says. “We measure how much each store ships and communicate those metrics to the stores.”
In the end, fulfilling from the store is all about making the sale and creating a happy customer. “The ultimate goal is the right product to the right customer,” Merrick says. “If you don’t have it, you’ve created the worst customer experience you can have.”