A lot of retailers focus their energies on either store-based fulfillment or drop ship for increasing online inventory assortment. At first glance this makes sense. Companies only have so much money to invest in their supply chain and they need to choose fulfillment strategies that work best for their business goals.
Choosing one method over the other, however, ultimately leads to less fulfillment flexibility, less customer choice, and higher opportunity costs. It also ignores the fact that store-based fulfillment operations such as SFS are functionally the same as drop ship. Similar types of inventory data exchange and order processing are involved in both, meaning that if you’re already doing one, you can definitely do the other.
That’s why we highly recommend running both types of programs. Here are some best practices for doing so:
- Use the same platform for both: This will allow you to have a single source of truth for all the inventory in your ecommerce ecosystem. It will also unlock cool features such as location-based order routing.
- Recognize differences: SFS and BOPIS involve your own store teams and inventory, giving you greater control. Drop ship, meanwhile, involves trading partner teams and outside inventory, giving you less control. Plan accordingly.
- Keep inventory data accurate: Have both store teams and trading partners update inventory only when their data is accurate. This will reduce cancellations and increase fill rates.
Using both store-based and drop ship fulfillment will expand your online assortment, reduce shipping costs with location-based order routing, help you move inventory quicker, and make your supply chain more robust. In the end, however, it’s all about expanding consumer choice by giving your customers more selection and options for choosing where, when, and how they purchase and receive their items.
Customer-centricity at its finest!
PS: When it comes down to it, every inventory source in your entire ecosystem, whether owned or not, should be stitched together to give you global access to all your current ATP. The good news is that the state of current supply chain technology allows you to do just that with minimum overhead and time investment as compared to legacy solutions.