Exploring the Ship-from-Store Concept and Its Impact on Order Fulfilment - A Case Study at a Swedish Fashion Retailer

Abstract

Background/introduction: E-commerce is becoming a natural part of retail business. In order to achieve a competitive edge, companies are shifting to omni channel retailing where channel integration is explored in the search for potential improvements in connection with customer offer and costs. One solution is to integrate inventories and offer improved order fulfilment by using both warehouse and stores.
Problem description: Previous research has focused on omni channel distribution but not specifically on the distribution concept with order fulfilment from stores. Consequently, the authors identified a need for exploration of the ship-from-store concept. The case company, a Swedish retailer, showed interest in the ship-from-store concept and its impact on order fulfilment which opened the opportunity of a case study collaboration. Service providers of logistics and IT system solutions play an important role in the omni channel development and in connection with the ship-from-store concept and insights from the market is needed to close the gap that was identified in the literature.
Purpose: The purpose of the thesis is to fill in the literature gap regarding the SFS concept and to present flexible guidelines for how the case company could handle order fulfilment decisions with SFS.
Methodology: A case study research strategy using a mixture of qualitative and quantitative data was used to explore the topic. The technique for analysing data was inspired from a coding method through a step by step process. Findings from literature, market experts and the case company together provided the answers to the research questions.
Conclusion/findings: 18 potential opportunities and 24 potential challenges related to the ship-from-store concept were identified. These were analysed and compared to the case company’s current way of working and future intentions. In addition, a guideline of how to handle order fulfilment decisions based on delivery speed, time in season and order characteristics is presented.

Popular Abstract

What is ship-from-store and how could a fashion retailer use it in Sweden?
Do you need new clothes before you go out with your friends on Friday? What if you could order them on Friday morning and have them delivered to your workplace already in the afternoon? This thesis reveals how this could be a reality, what the potential opportunities and challenges of shipping customer orders from stores are and how a Swedish fashion retailer could use it.
Retailers are interested in attracting customers by offering them faster deliveries. One way to do that is to ship the items straight from a store located in the same area as the customer.
The main idea with the ship-from-store concept is that inventories in warehouse and stores are integrated and that orders can be fulfilled from the most suitable location. This enables products that are only available in stores to be sold online as they can be shipped from one of the stores to the customer.
In total, 18 potential opportunities and 24 challenges were identified for retailers interested in the ship-from-store concept. Although shipping products from a store brings a lot of advantages, there are also a lot of challenges and selecting a store from where to ship an order can be a real headache. The selection of which store that is going to fulfil an order needs a set of rules, which make the process easier. There are 8 alternative store selection options provided in the thesis, that can make this process easier. However, it all comes down to a specific retailer’s specific choice. Other retailers should be able to use the same store selection process, however this research was done on one company’s example and therefore the results cannot be generalized.
Unfortunately, there is not enough information available for retailers who want to start using the ship-from store concept. That is why the concept is explored in detail to find out potential opportunities and challenges that come with it. Moreover, taking advantage of a widespread physical store network gives retailers a competitive edge against currently dominating online giants (such as Amazon) by offering faster delivery times to customers. Adding stores in the distribution setup also offer opportunities to reduce cost and environmental impact.
This thesis has two parts. The first one is applicable for every retailer that wants to understand the ship-from-store concept. The other one is focused on reflecting the findings on a specific Swedish fashion retailer and providing them guidelines for store selection.
The above mentioned results were obtained by collecting available literature in all forms, collecting data from the case company and interviewing people from companies who have already looked into this concept and were willing to share their knowledge.

• author: Brandt, Anton and Mühle, Rasmus
• supervisor: Klas Hjort
• organization: Packaging Logistics
• course: MTTM03 20181
• year: 2018
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Omni channel, Ship-from-store, E-commerce, Order fulfilment, Last mile distribution
• language: English
• id: 8963415
• date added to LUP: 2018-11-27 13:19:27
• date last changed: 2018-11-27 13:19:27