DEEPER DIVES: Everything You Need To Successfully Ship From Store

Good Morning,

First, as always, thank you for joining.

Switching it up and trying something different this week.

One article, one problem, and what I would do to drive performance and experience.

Let’s get into it.

Is Your Store's Layout is Killing Your Sales Dreams?

Big news this week as DoorDash hired Parisa Sadrzadeh as Vice President of Strategy and Operations, reporting directly to COO Prabir Adarkar

Her hire continues the focus on diversifying delivery outside of restaurants (a strategy the company views as key to future growth).

No surprise.

Uber, DoorDash and every other large platform need to expand their revenue base. Doing direct service in one vertical doesn’t generate enough density for efficient operations (and one vertical will never support shareholder expectations either).

Retailers are jumping at same-day delivery models.

Its become a fast fix to alleviate to sluggish sales. A 2024 survey by Roadie (take that how you will), had more than 70% of respondents sharing that they saw sales improve. In addition, customer satisfaction levels rose as did customer retention.

Even Walmart’s inaugural Adaptive Retail Report seems to confirm the place same day delivery is holding (albeit this was related to grocery in their results)

But the biggest challenge retailers face when implementing same-day delivery are costs.

Organizations are finding large six-figure startup dollars are needed to effectively get same-day operations running through their stores (with the average cost landing around $400k).

But when you need hundreds of thousands (or even millions) of dollars in improvements, you aren’t going to find that by reducing associate hours or by not back filling a few positions.

In the same way that a fulfillment center needs to be optimized for modern logistics in order to operate at excellence, so does a store that fulfills customer orders.

The entire operation needs to be designed with purpose and intention. It needs to be able to provide high quality, high touch service to customers in the store, as well as effectively using associate hours to prepare “outbound” orders for delivery.

Here’s what that design should cover:

• Inventory Management

• Structured Offers

• Labour (Assets & Planning)

• Store Layout

• Order Preparation

• Communication

• Variances, Failures & Cancellations

• Reset & Replenishment

Inventory Management

The top priority when looking to fulfill orders from store has to be inventory.

eCommerce has trained customers to expect that if they can hit “buy” on the website, they get it.

Inaccurate inventory or an inventory tracking system that isn’t maintained in real time will lead to a lot of failures and upset customers.

While this sounds easy, depending on the size of your store and the number of SKUs you carry, this can be extremely challenging. Don’t underestimate it.

Creating inventory buffers when you ship from store is essential. There are hundreds of customers that may be shopping your shelves every hour. They pick things up, move them around or simply have items in their carts but haven’t hit the checkout yet.

These buffers act as a type of artificial “stock out”. They won’t show items as available for same-day delivery once the on-hand quantity drops below the set threshold.

If your inventory control in store is tighter, or the items you sell don’t allow customers to directly access them (e.g. laptops, phones … or razor blades if you’re Walmart) then you can reduce or eliminate this process for the SKUs in question.

The requirement here is to have a system in place that is seamless, fast and accurate for your customers. Never say yes, to turn around a few hours later and say no.

(Note - You can also mitigate the need for inventory buffers with your order preparation process. Personally I feel this significantly slows down your store execution and creates a poor customer experience, which is why I only recommend it when inventory automation is available in-store)

Structured Offers

There are a few things to keep in mind when setting up delivery offers.

First, same-day delivery and ultrafast delivery are NOT the same.

Most customers are looking for same-day. This means that you have more time to execute on the promise.

Never make an ultrafast promise when something slower will meet the customer’s need.

Second, always set customer expectations.

You will be able to operate far more efficiently and effectively in your store if associates aren’t reacting to everything and anything all the time.

As part of the checkout process, you can define expected delivery windows based on established cut-off times. Examples of this could be:

• All orders received by 10AM go out for delivery by 1PM
  

• Orders from 8AM - 12PM deliver from 2PM to 6PM
  Orders from 12PM - 4PM delivery from 6PM to 10PM
  

Third, not everything you sell (or every combination of it) needs to be made available for delivery.

Take a look at the picture below. It’s a recent (3 days ago) order that processed for DoorDash through Lowe’s.

That’s over 5,000 pounds of concrete. There’s no Dasher on the planet that’s doing that for $15. This order had to get cancelled.

Being clear with limits or restrictions a product (or cart) may have should be addressed BEFORE the customer can hit buy.

Some easy ways you can avoid this type of gaffe is to have limits set for orders that use delivery services where equipment or vehicle size is unknown (volume, weight, maximum length, maximum height, etc).

These dimensions should be part of your OMS, and be working in the background to ensure that orders being processed for delivery are realistic for the type of asset you have access to.

Labour (Assets & Planning)

Outside of inventory, labour planning is the biggest reason that customer experience is negatively impacted by ship-from-store activity.

The number of employees on the floor has been paired down for years. So too have the “free” hours in work schedules.

Getting the most from your staff makes or breaks a store’s profitability.

And while triple tasking an employee might yield short term results, that type of reactive planning falls apart when you introduce a new activity stream.

Remember, the goal of implementing same-day delivery from your store is to INCREASE sales. This means that store staff will be busier tomorrow, than they are today.

Logistics isn’t a side hustle. If you treat it this way, it shows.

Serviceable Geography

You want to align your staff to the expected volume and foot traffic that is intended for the target store.

Take a look at this image:

It’s simplified, but it accurately represents the concept of the geographic radius a store may expect to service based on foot traffic, versus the serviceable area for delivery activity.

The bigger these areas are and the more densely they are populated, are factors that influence your planning and labour requirements.

Add to this, any information your company has on number of customers in store per hour, average interaction time, average basket size, number of web orders currently being received, etc.

You want to be able to get down to understanding how many customers per hour can be serviced in store (by employee) and how many orders per hour can be fulfilled (again, by employee).

My personal favourite structure when it comes to ship-from-store is to split the retail sales floor from digital orders (at least for fulfillment and prep).

You want the associates you have in-store to be able to properly serve and support customers that have physically come to the store.

There is NOTHING worse than going all the way to a store and having the employees absent and distracted because they have been tasked with taking care of orders for people who never left the house.

To avoid this, I recommend setting up a team that works with a manager/supervisors/key holder, an in-store customer associate and an order fulfillment/merchandising associate

(You add more customer associates or order fulfillment associates based on the expected rate of sale of each function for each store)

Protip: Have OF associates either dressed differently or not in the complete sales floor requirements. You want to ensure that these team members are able to run efficient picking and packing processes. The more they get distracted or tasked with other things, the faster the quality of that work will suffer.

Store Layout

Stores are intentionally built for how you want customers to shop.

A beautiful store layout that is well kept and easy to interact will increases sales.

If you are going to support same-day ship-from-store activity, especially if it’s gig platform based, you also need to design for that experience.

A proper store layout that supports this activity is one that focuses on the store employee AND the delivery service provider experience.

The need is for both parties to know what do to, where to do it and to make sure it is as quick as possible.

Having an impatient driver standing around for an order while a store associate is trying to help an employee is never good.

1. When possible, have the order pick-up activity happening in an area of the store that has great visibility. This helps employees track the need quickly

2. Don’t put the pick-up interaction in your checkout or where buying customers build up (either near top displays, or next to interaction points for service)

3. Use visual management to help direct delivery people to the correct location

4. Have an established process with your delivery provider. Drivers are either there to pick-up orders or they are there to also do the customer shopping. If your agreement with the service provider is that the platform worker does the picking, don’t let that fall to store staff - you haven’t properly planned for it and it will impact your in-store customer experience

5. Shield, cover or keep outbound items out of view from other customers. A bunch of boxes or bags waiting all over counters creates mess, confusion and rarely will fit the aesthetic you want for your sales floor

Order Preparation

Have a dedicated station.

This would an area of the store where all of the supplies, labels, printers, seals, etc are located.

If gives your order fulfillment / merchandising associates a proper space to prepare customer orders as well as interact with your inventory or POS systems to stage gate the process.

By working this way, you are able to improve the overall flow of the store and increase the efficiency, getting access to the maximum capacity per hour.

Separate prep areas also allow associates to pick more orders at a time, drop them into the work area and easily work with different cut-off times, batches or delivery provider needs.

If your store uses multiple delivery services, being able to segregate orders by provider will be a huge boost to simplifying those interactions (both for the drivers and for your store employees).

Communication

Another benefit of having a proper in-store picking and preparation process is that it gives you the ability to improve your customer experience with simple communication.

We are trying to replicate the certainty and easy of use that typical online ordering has brought.

In the same way that Amazon will track different parts of the order journey, you have the ability to do the same from store - only modified.

You can confirm the order was received, that it has been sent to the store for picking, that the picking batch / wave has started, that the order is prepared and waiting for pick-up, and finally that the order has been picked up.

Once picked up, you would allow your service providers app to take over so the customer knows when it’s going to arrive.

What I am recommending these days however to retailers I work with is to add a new interaction to this part of the chain.

An immediate follow-up once the delivery has been flagged in the system as complete.

Don’t just accept the POD and notice from the platform. They are your customers and it’s your trust with them that’s on the line.

Things like this can’t happen anymore…

Variances, Failures & Cancellations

Since inventory drives a huge part of the quality in your operations, it’s essential that your store ops reflect this.

On a daily basis (at minimum), your OF employees need to be clearing and addressing any issues that have come up from an expected delivery.

This often results from cancelled or refused orders or policies that allow orders to be made and payment taking only after the delivery is completed.

Items need to be re-processed, removed from the queue and the inventory re-allocated back to the system so that it can be sold without delay.

Reset & Replenishment

And, my last piece of advice.

In the same way store associates are tasked with cleaning up the store at night, with the intention that the store opens fresh the next day, you also need to focus on your fulfillment activities.

Check your order station, make sure that there are no left over items.

Make sure that all supplies have been put away and are back in the right place.

Bags or boxes that are used to fulfill orders should be topped up (these are often held somewhere in other boxes in the backroom).

Validate your order queue to make sure nothing had gotten stuck or was never released for picking. If you find something, a decision needs to be made on how that order will process.

Log unexpected activity or challenges. This is particularly useful with rotating promotions. Employees often discover when the promo drops that something isn’t working as expected. Since most sales run at least 7 days, getting a solution or workflow for it as soon as possible will only make your store run that much better.

That’s it for this week. Thanks for being here.