This article originally appeared in the July/August issue of Mailing Systems Technology.
Editor’s Note: This is a continuation of DeAngelis’ article titled “Did Video Ever Really Kill the Radio Star?” which appeared in the May/June issue.
So, after my friends and I were finished discussing popular songs and one-hit wonders, our musings turned to places and things that are no longer around. We started with Studio 54, Eastern Airlines (with which I took my first airplane trip; I still own an Eastern Airlines golf travel bag!), Howard Johnson’s, the Horn & Hardart automat, and CBGB (where I saw the Talking Heads and Blondie). Then out of nowhere, someone blurted out, “Service Merchandise.”
Now, for those under the age of 40 (ok, maybe 30), Service Merchandise was a catalog-showroom retailer. Consumers would receive a catalog at home, select items of interest and would then drive to the closest Service Merchandise location where they could see the products (displayed in glass cases, if I remember correctly). Customers who wanted to buy products filled out order slips attached to a clipboard and brought it to the cashier for payment.
After buyers paid for the items, cashiers would submit the order to the stockroom in back. Shoppers would move to the merchandise pick-up area and wait for their items to come out from the backroom on a conveyer belt. Later iterations included self-service kiosks called “Silent Sam;” barcoded pull-tags replaced the clipboards.
A few days after my fire-pit nostalgia session, I received an email that contained a link to an article titled “Postal Service Is Really Online Retailers’ Biggest Problem.” It contained the perspectives of the CEO of a major retailer and included the belief that the biggest obstacle for e-commerce customers will be actually getting products to consumers. This particular business chief believed that “delivery services, specifically the United States Postal Service, will be unable to keep up with the demand soon enough.” The article went on to say that the retailer had recently released its own online shopping initiative that will send products from all of its stores to consumers.
There Is a Name for That
There is a name for this initiative: Ship from Store (SfS). It has been predicted that by the end of this year, one in three retailers will have Ship from Store capabilities. This initiative will allow retailers to better meet the customer demand of immediacy in receiving articles ordered online while helping to control shipping costs by allowing retailers to induct packages closer to the recipients and thus pay less per package.
Studies have also shown that Ship from Store can result in higher sales by preventing lost sales when the online warehouse is out of stock but the stores are flush with inventory. Other benefits include the ability to improve inventory management, reduction of the need to markdown items in over-stocked stores while other stores have run out of the same product, and the utilization of existing space as mini-distribution hubs.
Steps to Success
Retailers must take a few clear-cut steps to ensure a successful omni-channel shopping experience that is consistent with an individual brand’s image. These steps should include:
· Creating an order-management system that allows visibility into both fulfillment center and store inventories.
· Establishing consistent operations to ensure that consumers have the same experience regardless of the location from which they receive merchandise.
· Training store employees to maintain the consistency mentioned in the bullet above. Warehouse operations are different than store operations. Investing in training is an absolute necessity.
· Integrating into carriers’ infrastructure will save a retailer time and money. Reach out to them early. The USPS offers Operational and Technical Integration Specialists who will help guide sellers through the steps they need to set up a successful Ship from Store experience.
Come to Think of It…
I guess if you stop and think about it, Service Merchandise’s business model was about 90% of the way to a Ship from Store solution.
Vincent DeAngelis is Vice President, Postal Relations, and Shipping Product Management for Neopost USA.