Is it a Store, eCommerce Warehouse, Both?

The ongoing shakeout of retail has put pressure on big chains to turn physical stores into eCommerce fulfillment centers. This may be a necessary strategy for those who stand the most to lose from online competition. Moreover, fulfilling online orders from stores (which some describe as turning a store into an eCommerce warehouse) appears to be a winning strategy.

Fulfilling Online Orders From Stores

The North American retail chain Target, for example, set about to reverse declining sales with an eCommerce strategy. Back in March, the company’s CEO told a conference that Target began to fulfill online orders from local stores, as opposed to more distant fulfillment centers.

The result, apparently, was an increase in digital growth. Conceiving brick-and-mortar as an eCommerce warehouse may have helped Target reach their, er, target. As of March, their stores accounted for 55% of online order fulfillment.

Is a Store as eCommerce Warehouse a Good Idea?

Target is far from alone in fulfilling online orders from physical stores. Many chains, struggling to rationalize their brick-and-mortar and eCommerce strategy have started to invest in this concept. For example, another chain, Kohl’s, has also invested billions to merge their online and brick-and-mortar customer experience.

There’s a flip side to the story, however. As Yossi Sheffi, a logistics experts, says, the eCommerce warehouse (or in-store fulfillment) dilutes the retail operation. “In-store fulfillment…creat(es) work for store employees that used to be performed by customers,” he wrote, as cited by PAYMNTS. “It disrupts work flows at stores and adds new, inefficient tasks in sites ill-designed for the new duties.”

It’s All About the Omnichannel

While big retail chains make in-store eCommerce fulfillment a priority what should smaller businesses do?

Smaller retailers do not have to protect the huge investment in physical retail that big chains do. However, it is important for retailers to recognize the changing expectations of their customers. This means moving toward fulfilling orders for the omnichannel. It means meeting customer expectations online and in the

This means moving toward fulfilling orders for the omnichannel. It means meeting customer expectations online and in the store and having the ability to fulfill orders regardless of how they buy.