business news in context, analysis with attitude

The Detroit Free Press has a story about how companies like Walmart, best Buy and Gap are, "instead of fulfilling Web orders from warehouses hundreds of miles from shoppers' homes," are shipping products from stores to cut down on the transit time and to make customers happier. According to the story, "The trend, known as Ship from Store, saves money through shorter delivery routes. More important, it speeds deliveries, avoids costly markdowns and recoups sales that have been lost to Amazon, the world's largest Internet retailer."

The story notes that "a network of large stores — with high overhead costs — has become a liability rather than an asset in recent years. Amazon, which has no stores, won market share with lower prices and huge selection. But retailers have begun fighting back by using technology to get more sales out of stores — and ship-from-store is a big part of the effort ... Already, 10% of the items ordered on are shipped from stores and the majority of those packages are delivered in two days or less, according to the company. Two-thirds of the U.S. population live within five miles of a Wal-Mart store, so the company is using these locations as 'nodes' in a broader distribution network that includes storage warehouses and specific fulfillment centers for online orders.

One consequence of the shift has been the creation of start-up companies that can help enable it. An example: a company called Shutl, which the story says "helps retailers deliver online orders from stores. Shutl's service covers most shoppers in the U.K., where the firm partners with retailers including Argos, Oasis and Karen Millen. The start-up is also in Manhattan and plans to expand soon to other big U.S. cities including Los Angeles, Miami and San Francisco."
KC's View:
It always has seemed to me that smart bricks-and-mortar retailers will always try to build on their strengths ... and if you have actual stores, that means that you actually have to turn those stores into compelling shopping experiences that compete effectively with the advantages of online retailing. That means, I think, often embracing the notion of omnichannel retailing ... and these days, it means competing with Amazon's expanding network of distribution centers, which increasingly will offer next-day and same-day delivery to much of the US.