As online commerce companies like Amazon.com and Alibaba continue to improve the speed of deliveries from overnight to same day, retailers around the world realize they are at a disadvantage. Faced with fulfilment networks that revolve primarily around distribution centers (DCs), leading retailers are looking to compete with the one thing their online competitors don't yet have — a store network.
“The inventory held in store, when utilized effectively and supported by the right in-store logistics solutions, can enable improved fulfilment offerings and delivery lead times,” said Thomas O’Connor, principal research analyst at Gartner. “Stores provide proximity to the consumer, coupled with a wider variety of touchpoints than are available through pure online retail. These touchpoints include click and collect, reserve and collect and ship direct from store.”
“ Efficient same-day services such as click and collect, in which the consumer buys online and collects in store, become possible.”
A common constraint of online order fulfilment capabilities is retail supply chains treating online the same as brick-and-mortar stores within the distribution network. Fulfilment of all online orders is limited to a dedicated inventory held at a few select distribution centers (DCs).
“By leveraging the store network, as well as the inventory available in their DCs, multichannel retailers can deliver stock from the closest inventory holding point to the consumer, speeding up delivery times, expanding fulfilment offerings, ensuring the widest possible product offering to consumers and reducing their total inventory held,” said Mr. O’Connor. “Efficient same-day services such as click and collect, in which the consumer buys online and collects in store, become possible.”