June 6, 2014, 10:53 AM

IRCE Hot Topic: Fulfillment

Buzzwords abound—omnichannel, multichannel, cross-channel—to describe the stores-meet-the-web convergence that is changing how retailers manage inventory and deliver orders to consumers wherever they are and however they want to shop.

Lead Photo

That convergence is a change that all retailers with bricks-and-mortar locations, if they haven't already, will have to address to stay competitive.

But you already knew that.

What you may not know about are some of the specific ways that fulfilling online orders from stores can help improve the bottom line. That's why at this year's IRCE, the session "Reducing Markdowns with Store-Based Fulfillment" is one not to miss. In it, Kevin Lyons, senior vice president and general manager of e-commerce at electronics retailer h.h. gregg will describe how store-based fulfillment has helped reduce markdowns and shipping costs. Co-presenting is Jason Merrick, director of e-commerce at sports gear seller Peter Glenn Ski and Sport.

"The store's return on square footage will never be what it was using traditional traffic-driving methods and point-of-sale transactions—it takes a new way of doing retail," Lyons tells me in previewing his presentation. That new way, he says, includes not only shipping from stores, but also selling online in stores, such as via kiosks or tablets; enabling buy online, pick up in store; and using both stores and distribution centers to fill any type of order, depending on which is most cost-effective in a given situation.

This year's IRCE promises insights not only about cross-channel retail, but also on retailers crossing borders. The session "Logistics Strategy to Avoid Last Mile Implosion: How to Adapt to Each Culture," will go over many of the finer points of delivering goods to customers abroad.

In particular, co-presenter Antoine Routaboul, director of logistics for French apparel e-retailer Bonprix France & Benelux, says he plans to "highlight that international expansion has to take into consideration the cultural habits of a given territory." For example, in some regions, like Brazil or Russia, customers may not be used to paying up front for deliveries or using credit cards.

"Due to various reasons such as history, different payment methods, retail development maturity or national postal organizations, the 'last-mile' delivery is different from one country to another—and, of course, returns follow the same pattern," Routaboul says.

"A U.S. retailer will need to look carefully in order to strike the right balance between adapted processes to match local market expectancy and mutual processes to reach some economies of scale," he says.

He knows from experience—Bonprix is a subsidiary of Otto Group, the second-largest retailer in the 2013 Europe 500, which operates more than 100 e-commerce sites across Europe. In September, Otto announced plans to spend about $67.6 million and add 700 jobs to expand its fulfillment hub and delivery network in Russia, where its online sales have been growing for several years.

Amy Dusto is an associate editor who covers e-commerce technology and fulfillment vendors for Internet Retailer and has attended two IRCEs.

Highlighted Sessions
Logistics Strategy to Avoid Last Mile Implosion: How to Adapt to Each Culture
Wednesday, June 11, 11:00-11:45 a.m.
Reducing Markdowns with Store-Based Fulfillment
Wednesday, June 11 at 4:00-4:45 p.m.


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