DC Velocity - January 2019

44 DC VELOCITY JANUARY 2019 www.dcvelocity.com
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tomer orders during off-peak or nonoperating hours, but that tactic can impede efforts to meet the rapid delivery demands of urban shoppers. Additionally, to fulfill orders with minimal customer disruption in the confined space of small-format urban stores, retailers must be creative. The picking processes, packing stations, and staging areas used in distribution centers and large suburban stores cannot simply be replicated. Instead, streamlined methods using scaled-down equipment and fewer shipping box sizes must be deployed.

In addition to familiarizing themselves with the general advantages and disadvantages associated with all store fulfillment models, it’s helpful for retailers to understand the unique advantages and disadvantages associated with the two different store fulfillment models— click-and-collect and fill-and-deliver.

Click-and-collect: The click-and-collect option is particularly efficient, eliminating costly last-mile operations and requiring no more than curbside loading. Likewise, retailers avoid the risks of in-transit damage, mis-deliv-eries, and porch piracy. But as click-and-collect orders increase, retailers risk clogging up their customer service desks or checkout locations handling online orders and negatively affecting the in-store customer experience.

Fill-and-deliver: The fill-and-deliver option pro-
vides greater customer convenience. However, for the
fill-and-deliver option to work, retailers must pay atten-
tion to service reliability. Delivery personnel availability
and quality can be inconsistent, especially when a retailer
uses on-demand fulfillment services such as Shipt or
Instacart. As the volume of orders in urban markets
increases, retailers may face another challenge: urban
fulfillment capacity. One SRSC executive raised the
question “What happens when online order volume at
urban locations starts becoming more than 10 to 15 percent
of the store volume?”

Cost is another consideration. A vice president noted: “We’re dipping our toe in the water in a lot of different areas with delivery because—given the costs associated with last mile—there’s still a lot to be learned.”

Finally, the use of stores for order fulfillment places additional responsibility on store associates. Fulfillment of individual orders requires an efficient pick/pack operation that maintains strong productivity, speed, and accuracy. Small details such as improper selection of carton size or delivery provider can result in higher “dimensional weight” delivery charges. Retailers must properly cross-train their customer service associates to execute the fulfillment functions of order picking, packing, and shipping.

Distribution center fulfillment

While stores offer a compelling urban fulfillment value proposition, distribution centers also play a vital role. In addition to rapidly replenishing the stores, suitably located distribution centers can handle e-commerce order fulfillment and delivery for urban markets. Retailers can use their own distribution centers or, depending on the order cube, weight, and quantity, their product vendor’s or logistics service provider’s DCs.

Compared with stores, distribution centers can better support the fulfillment of large-scale orders. This is especially true for home improvement, electronics, and furniture retailers that sell products of widely varying weights, dimensions, and prices. DCs also have access to trained transportation personnel and specialized