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Ship-to-store is not exactly a new phenomenon in eCommerce.
Walmart chose to build its Pickup Today program instead of expanding free shipping options way back in 2011. Steve Nave, the SVP and general manager of Walmart’s online presence at the time, put the benefit of the tactic plainly: “Not only do we see it as a nice convenience for customers, but we also saw it as a way to drive incremental traffic to the stores, and incremental sales.”
But what about today, eight years after Walmart rolled out the Pickup Today program? Is ship-to-store still relevant as online shopping and digitally native brands become increasingly popular?
The attractiveness of the ship-to-store model lies in the fact that physical retail still reigns supreme — though eCommerce has grown dramatically in the past decade.
Fareeha Ali at DigitalCommerce360 reports that while eCommerce sales have nearly quadrupled since 2007 (to more than $450 billion), they still account for just 13 percent of total retail sales in the United States.
You don’t have to look any further than Amazon’s acquisition of Whole Foods to see how these trends play out in the real world. Online shopping is much more popular than it was a decade ago — but shopping in brick-and-mortar stores is still by far the most popular option.
None of this is to say that brick-and-mortar and eCommerce are mutually exclusive ways of doing business, however. Big box stores are embracing eCommerce transactions just as digital native brands are exploring ways to take advantage of physical retail. Retail consultant Steve Dennis puts it simply: “Physical retail is far from dead.” eCommerce is an important means of doing business in several categories, but in others it’s merely a means for brands to achieve an omni-channel presence.
And ship-to-store is just one fulfillment option that breaks down the barrier put up by that false dichotomy.
Adding ship-to-store as a delivery option is a great way for large retailers to bridge the gap between their established physical stores and their eCommerce strategies. More than anything, ship-to-store helps these retailers meet the customer where they want to be.
This is exactly what customers want, Judy Mottl at Networld Media Group tells Scalefast. “Ship-to-store is all about convenience which is what the consumer, especially the younger ones, expect and demand from retail these days as they want as many possible options for getting their hands on product,” she says.
It’s also worth pointing out that ship-to-store reduces shipping costs for the brand (which can translate to savings for the customer) and shortens the time it might take a customer to get their hands on a purchase.
Mottl summarizes the importance of all those benefits: “Providing convenient, fast, easy and wanted ways to buy and get product is a win for the consumer and the brand/retailer and builds on customer loyalty.”
One more benefit worth mentioning here: Ship-to-store creates fulfillment efficiencies that can improve last-mile delivery. Fundamentally, ship-to-store is more of a backend process than a new customer offering. It’s basically a way to get items not in stock to customers in a seamless way. At the same time, this fulfillment method decreases the footprint of the physical store. The model is “based on a distribution center managing and filling the order, versus in-store staff executing the pick-and-pack activities,” writes Jacqueline Smith at Supply Chain Dive.
The benefit is twofold: reducing out-of-stock scenarios and drawing customers into the physical store, writes procurement consultant Jonathan Groda.
With those benefits, the model is becoming increasingly popular. Melina Cordero, Andres Rodriguez and Spencer Levy at research firm CBRE note that nearly a third of online orders from Zara are picked up in-store. At Home Depot, almost half of online orders get shipped to store, they write.
The major lesson from ship-to-store for any eCommerce brand is that multichannel touchpoints and fulfillment are king. Customers want flexibility, personalization and options. The range of consumer preferences and locations call for “deep integration across all channels, including websites, marketplaces, social media and brick-and-mortar,” writes Studio 15 CEO Jia Wertz.
“Multichannel is vital for captivating consumers and keeping them engaged from first impressions to the eventual point of sale.” At the very least, the popularity of in-store pickup means retailers of all shapes and sizes should bring as much flexibility to customer interactions as possible.
For some digitally native brands that are quick on the growth train, it can mean moving into a physical space after dominating the eCommerce space.
Late in 2018, Bloomberg’s Matthew Townsend reported that Casper planned to open more than 200 stores in the next few years. Warby Parker, the optical chain, was on course to have 100 physical stores by the end of 2018. “If physical outposts were initially exercises in branding and publicity, they’re now core to long-term growth,” Townsend writes.
One big lesson here: People simply enjoy the physical shopping experience, no matter the retailer or brand. “When a customer walks into a store, he expects a certain level of customer service, product selection, and courtesy, regardless of whether the shop is a single boutique, part of a regional chain, or store number 2,000 for a massive retailer,” Armando Roggio writes at PracticalEcommerce.
By making the jump to physical retailer, digitally native brands can start to take advantage of the benefits of ship-to-store: more foot traffic, better interactions with customers and new opportunities to upsell.
What’s more, some product categories are difficult for customers to buy without them actually seeing or touching the products. Think eyeglasses or perfumes — trying those on in-store is an important part of a customer’s buying decision. Ship-to-store bridges that gap.
All of this boils down to the fact that ship-to-store, ultimately, is a refinement to the customer experience. That goes for big retailers and digitally native brands alike. “Customers don’t think in channels,” Cara Hogan at customer retention company Zaius writes. “All your customers care about is having a fantastic buying experience. This could be online, in-store, or a combination of both.”
That, more than anything, is what keeps ship-to-store (along with every other delivery model in the spectrum) relevant. As eCommerce sales start accounting for 15, 20 or 25 cents of sales on the dollar, keeping these channels open and frictionless is what will matter most.
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