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Ship from Store Distribution Model Makes Headway

Inventory management expands beyond the four walls of the DC.

(Boonton, NJ, July 24, 2014) — As the e-commerce revolution puts unrelenting pressure on supply chains, brick-and-mortar retailers increasingly are using stores to supplement the inventory in their DCs.

“Ship from store is a wonderful thing,” Gap executive Art Peck recently told Wall Street analysts. “It allows us to expose all of our inventory, regardless of where it is — in our DCs, in our store, on our website — to all of our demand.”

For retailers that already have prime real estate in the form of brick-and-mortar stores, ship from store offers a competitive advantage against e-tailers that ship from distant fulfillment centers.

Retailers will also experience lower transportation costs and increased inventory turnover, which let them hold the line on prices.

On the other hand, the possibilities are complicated, says Kris Bjorson, head of retail/e-commerce distribution at commercial real estate brokerage Jones Lang LaSalle.

Perhaps stores will turn their back rooms into mini-DCs. Bjorson sees some stores turning into “urban logistics facilities” or even crossdocks.

“There isn’t a one-size-fits-all strategy,” said Bjorson. “But we expect stores to become an important part of the customer fulfilment strategy.”

More on ship-from-store practices, boosting piece-pick operations, and flexible work platforms appear in the July issue of Distribution Center Management.

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