DC Velocity - November 2018

selected by 94 percent of respondents, is to pick orders in
the store and ship them to the customer,” Cunnane said.
“Compared to last year’s survey, when fewer than 70 per-
cent of respondents identified pick and ship from the store,
this is becoming a bigger part of store operations.”
With stores taking on a larger role in fulfillment, we asked
respondents what capabilities were needed for a successful
in-store fulfillment program. The top answers were visibili-
ty of inventory across all locations ( 58 percent), ease of use
by store staff ( 53 percent), and training store associates to
pick/pack/ship ( 42 percent).

“Training is a big part of ship-from-store, as the skills
required for floor staff and warehouse staff are significantly
different,” Cunnane said. “Training store associates on how
to properly pick, pack, and ship speeds up the process while
helping to eliminate errors or damaged
merchandise.”
Given the need for additional invest-
ment in time and training, retailers
appear to be somewhat selective about
the stores they use for e-commerce ful-
fillment. When we asked respondents to
what degree they used the stores in their
chains for e-commerce picking, packing,
and shipping, only 40 percent said they
had enlisted all or almost all of their stores
in the effort. From there, the numbers
dropped off quickly. Twenty-seven per-
cent indicated they handled e-commerce
fulfillment at “a widespread selection” of
stores, and another 27 percent at “a select
subset” of stores. Thirteen percent said they used stores on a
limited pilot basis, and 7 percent indicated that they didn’t
use stores for e-commerce fulfillment at all.

BRICK AND MORTAR IS STILL KING

The e-commerce revolution is happening fast, and our survey showed that most retailers are investing large amounts of time, labor, and money to keep up. But every gold rush needs a reality check, so it’s worth reminding readers that brick and mortar is still king. Asked what percentage of their direct retail revenue currently comes from each channel, respondents said 57 percent came from brick-and-mortar outlets, 33 percent from online (including mobile) sales, and 14 percent from call center/catalog sales.

Still, it’s clear where the trend line is going. Just five years
ago, brick and mortar generated a full 64 percent of sales,

according to the survey respondents. Brick and mortar’s share has slipped to 57 percent today, and respondents expect it to slide further—to 50 percent—in five years’ time. By contrast, survey-takers see online’s share, which stood at just 22 percent five years ago, rising to 39 percent by 2023. (See Exhibit 4.)

WORK IN PROGRESS

Taken together, the survey results indicate that omnichannel fulfillment is still in a state of flux. As retailers scramble to adjust to a shifting marketplace, they continue to fine-tune their networks, processes, and technologies. At the same time, they’re adding tiles to the complex omnichannel fulfillment mosaic. To make it all work, they’re relying more and more on a resource that was once just a bit player in the omnichannel game: the retail store.