For retailers that sell the same merchandise in person and online, shipping online orders from stores makes sense. Running out of hot items can mean ending promotions early or disappointing customers by canceling their orders, neither of which is a good idea during the stressful and crucial holiday season. Yet expanding ship-from-store is not as simple as it sounds at first.
Target’s chief operating officer explained to the Wall Street Journal that there’s a hidden bonus to doing business this way: greater variety for online shoppers.
Instead of duplicating the inventory in the e-commerce warehouse, the discounter can ship the most common colors and sizes of, say, a sweater from its stores while offering extended sizes and more colors online only. By shipping the popular colors from stores, the chain makes room for the extended colors and sizes in its warehouse.
If your local Toys ‘R’ Us store seems more full than in past years, for example, it isn’t just because the retailer is keeping more stock on hand than it used to, a bold experiment that it began last year. Those shelves crammed with merchandise are now also the e-commerce warehouse. Last year, the store filled 42% of its online orders from store shelves.
Online promotions give retailers the opportunity to end them when inventory runs low, which runs the risk of annoying customers. Toys ‘R’ Us found itself doing this in the past, and found itself making the impossible choice of using in-store inventory to fill online orders and running out of key items everywhere, or ending promotions for the holiday season early. It chose to end the sales to keep store stock in place, but has instead crammed stores with merchandise this year as an online backup plan.