With growing customer expectations and demand, the retail sector has undergone rapid transformation. Customers now look for faster and more flexible delivery options. This is why quick commerce is gaining popularity in recent times. In India, the quick commerce market has expanded enormously; its Gross Merchandise Value (GMV) grew from USD 0.5 billion in 2022 to USD 3.3 billion in 2024. Under such circumstances, the ship-from-store model fits well for many small businesses and retailers. In this model, customers’ online orders are fulfilled directly from the physical retail shop, rather than a centralised warehouse.
In this type of model, the physical stores are converted into fulfillment centers. Thus, the retailer will be able to tap into their existing inventory throughout many locations. This eliminated the need to store excess items in the central warehouse. Rather, more and more items will be stored in the shop. This will also lower the cost of last-mile delivery and enhance product availability. The ship-from-store model is perfect for enhancing customer loyalty.
What is Ship-from-Store Model?
The ship-from-store fulfillment model is an innovative logistics strategy in which customers’ online orders are fulfilled directly from a physical retail store, rather than a centralised warehouse. The retail stores act like mini distribution hubs. The primary objective of this model is to enhance delivery speed, optimise inventory utilisation, and deliver a seamless omnichannel experience.
The Step-by-Step Process of Shipping from Stores
The following are the step-by-step processes of how the ship-from-store model works:
- Placement of orders: When a customer places an order from an eCommerce platform, the system finds the best store location based on inventory availability and the customer’s proximity.
- Store assignment: The order is assigned to the store where all the ordered items will be available for pickup. This decision is based on several factors, including the speed of delivery, the level of inventory, and the workload of staff available in the store. If not all products are available in a single store, the order is divided into two or more stores.
- Order Picking: Once the store receives the notification and details of the order, it picks up the required item from the stockroom. The store’s backend service providers scan and pick the items according to the order. If any item in the list is not available, the order is split between the stores.
- Packaging and labeling: The items of the order are then packed using various shipping materials, such as boxes, bags, and padding, and the shipping address and barcode are labeled on the packaging.
- Shipment and tracking: The package is handed over to the delivery carrier. At the same time, tracking information is sent to the customer. The tracking details are also updated in the system, allowing for real-time monitoring of the order.
Benefits That Make Ship-from-Store a Game-Changer
In modern times, the ship-from-store model has changed the whole retail landscape. This system has transformed the physical store into a mini-fulfillment center. This model offers quick deliveries, inventory optimisation, and enhances customer satisfaction. Some of the key benefits of the ship-from-store model are:
- Quick delivery: Since this model ships from nearby stores rather than a warehouse, the distance between the product and the customer’s location is reduced. Hence, the customer receives their order on the same day or, at the latest, the next day.
- Better utilisation of inventory: This model helps retailers reduce overstock and enhance the overall turnover of inventory across all locations.
- Lower shipping costs: In this model, customer orders are fulfilled locally. Thus, retailers do not need to travel long distances for shipping, and as a result, shipping and transportation costs are low.
- Improved Productivity: The store’s productivity can be enhanced by maximising the efficiency of its workforce. For example, the ideal staff can help pick up and pack the orders.
- Improved customer experience: Faster delivery and perfect order completion have increased customer satisfaction. This can also increase the chances of repeat purchases and brand loyalty.
- Reduced warehouse dependency: In this model, retailers do not have to depend on the warehouse, as stocks are distributed across local stores.
What are the Drawbacks of Shipping from Physical Stores
The ship-from-store may have several advantages, but it does not mean that it is without challenges. The downsides of this model impact the operations, costs, and customer service. As such, small businesses and retailers must be careful before implementing this model. Some of the main disadvantages of the ship-from-store model include the following:
- Problems with inventory accuracy: In the ship-from-store model, the absence of a well-designed software system poses a significant risk of overselling. Additionally, the unavailability of stock in the store that is not updated immediately can delay or even cancel order picking and packing.
- Increased labour demands: To handle the logistics task, store associates may also require extra training and time. This can affect their ability to serve in-store shoppers efficiently.
- Higher fulfillment cost: When dealing with high order volumes or large items, packaging and shipping from the store can be more complex than that of warehouses.
- Inconsistent customer experience: There may be significant variations in staff performance, packaging standards, or limitations in the store space. This may result in inconsistent shipping quality and delivery experience.
- Huge investment in technology and infrastructure: Retailers may also need to make a huge investment in advanced order management systems, inventory systems, or store logistics tools. This can be costly and time-consuming for the retailers.
Are There Any Alternative Fulfilment Models for Omnichannel Growth
With growing customer expectations and demand, several omnichannel fulfillment models have emerged, along with the ship-from-store model, for retailers seeking omnichannel growth. Some of the key alternatives that you can consider include the following:
- Buy Online, Pick up In-Store (BOPIS): In this model, customers place their orders online but then pick up the item from a nearby store. Thus, the shipping cost can be reduced. It also encourages extra in-store purchases.
- Centralised fulfillment centers: In this model, dedicated warehouses provide order processing and shipping at scale. It is cost-effective and consistent, making it very useful when you need to ship large volumes in a short timeframe.
- Curbside Pickup: This is a variation of BOPIS. In this model, customers can pick up their orders without having to leave their vehicles. This model is highly suitable for shipping health-related products or situations that require time-sensitive delivery.
- Dark Stores: In this model, products can be shipped with the speed of local delivery and with the efficiency of a warehouse setting.
Accelerate Last-Mile Delivery with Shiprocket Quick
Shiprocket Quick is a renowned hyperlocal delivery platform in India that has revolutionised last-mile logistics across the country. This model provides rapid, reliable, and cost-effective deliveries, ensuring that customers’ products can be reached quickly and efficiently.
Some of the key features of SR Quick include the following:
- Multiple courier partners: It is partnered with several renowned courier service providers in India. With such a huge number of courier partners, this platform has the option to select the most suitable delivery partner if necessary.
- Affordable cost: It offers a competitive rate, starting at Rs. 10 per kilometer. It does not charge any surge fees, making it a cost-effective solution for its customers.
- 24/7 service: It provides service around the clock, ensuring that small businesses and retailers can meet their customers’ demands at any time.
- Real-time tracking: It provides features like live tracking, which informs both the customer and businesses about the delivery status. This can enhance transparency and trust.
- Cash on Delivery (COD): This option allows customers to pay in cash upon delivery, catering to those who prefer to pay after receiving their products.
- Insurance: This platform provides an insurance option for shipments. It refunds customers’ money if a product is damaged or lost.
Conclusion
Thus, ship-from-store offers a significant opportunity for retailers and small businesses to optimise their inventory, reduce delivery times, and enhance customer satisfaction. This model transforms a physical store into a mini-hub, thereby bridging the gap between online and offline operations.