I wasn’t there but “Mr. Hudson said that the move away from distribution centers has led to reconnecting store sales teams with their customers” makes little sense to me. You want to connect with customers prior to buying your items so they buy more or better items. Connecting after they’ve purchased something requires nothing from the employee but to get the item in a reasonable amount of time. There is no risk from having the person not like them — they already have the sale.

Ship-from-store can be a boon to brands, however, make no mistake — this is a warehouse duty, not a salesperson. When you start paying $15 an hour, I would expect more retailers to realize it is an expensive way to fulfill orders — especially when the face number of employees on the floor has fallen 10 percent since the Recession.

Brick-and-mortar must be much more than a distribution center if you want to have any chance at surviving.

Shipping commerce orders from stores is clearly a positive for the customer. It is a relief valve for any retailer that can find the only available unit close to the customer to fulfill an e-commerce order. However, experience shows that distribution centers can perform a function between five and 10 times faster than store personnel can. From an efficiency perspective, the DC is still the king of fulfillment. If retailers can streamline the ship-from-store process, are willing to take on the additional associate time, training and expense required to perform the pick-pack-ship functions, and find equitable ways to financially reward all those involved and concerned, then, and only then, will ship-from-store become more central to e-commerce order management. If one of these ingredients is missing, the mistakes increase, the costs go up and the disappointments ensue. Ship-from-store is an adjunct to, but not a replacement for, centralized fulfillment. Retailers that can carve out space for order processing in their stores, have a higher price-point product line, have the systems in place to communicate, acknowledge and… Read more »

Claiming success depends on what metric you use. Target’s argument seems to be that a growing percentage of orders is being fulfilled by stores — which is doubtless true — but it misses the bigger picture:

1. Is Target growing its overall top-line sales? How about other general merchandisers who are pursuing ship-from-store strategies?

2. Is the ship-from-store trend actually cutting down on store visits, and the chance to sell impulse items?

3. How is the multitasking sales associate (busy fulfilling BOPIS or ship-from-store orders) doing his or her core task of interacting with customers or replenishing store shelves?

On the third point, it’s clear that department stores in particular have allowed their in-store service levels to decline while they try to fund omnichannel initiatives out of the same expense bucket. But by all appearances the issue is costing Target sales, too.

One of the great advantages online retailing has over brick-and-mortar is to be able to support the same level of sales with considerably lower levels of inventory. Balancing inventory to demand across hundreds of stores has always been a challenge, not only in the cost of extensive inventory, but in the price reductions executed to clean out the inventory. Ship-from-store would only increase that challenge.

Some of the comments made already point out the clear challenges related to ship-from-store and there certainly are some. That said you have to look at the very basic fact that chain store retailers can have a clear logistical advantage even over Amazon (yes not to feel inferior for a change) in terms of more locations in close proximity to customer and the theoretical ability to get quick (same day?) home delivery in place. Towards this end, you have to consider that a store is a multi purpose facility and physical design needs to account for these requirements. (Like maybe it’s time to put properly designed back rooms into stores again.) Some of the way we measure store expense also may need an update. That store associate shipping a package is not necessarily a “non selling expense” he/she in reality is actually fulfilling an order and making sales. (Possibly at a higher rate per hour, or with a better wage expense % of sales than one might think.) The measurement of cost to ship from… Read more »

Flexible fulfillment provides heretofore unavailable inventory management. It will become a retail “Best Practice” as the costs to ship from store are mitigated by mark downs you don’t have to take.

There are two factors giving the lie to ALL click-and-collect, or variations thereon: 1. Store logistics are founded on shipment of pallets to stores, not to fill orders, but to replace sold inventory (or new). Amazon’s logistics are built from the ground up on delivering single items for single customers. There is simply no way to readily smoosh pallet logistics into item logistics, PERIOD… 2. Store logistics are built on the cost of stockers breaking down pallets to replenish warehouse (retail store) inventory, from whence “free labor” (aka shoppers), pick their own stock, deliver it to checkout, and from thence to wherever they want to take it. There is NO way to replace that massive, inefficient, free labor with diverted store personnel. Sometimes I wonder if anyone at retail — other than those not jumping into these guaranteed failures — is thinking through the problems in a holistic way. Just like smart phone apps, they will spend hundreds of millions struggling to get a few percent adoption for guaranteed losing programs, all the while saying,… Read more »