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Changing Channels: Prepping Brick-and-Mortar Merchandise for Online Sales

As shelter-in-place directives prompted consumers to move more of their apparel shopping online, retailers have reallocated merchandise from brick-and-mortar stores into fulfillment centers. But pulling product originally intended for physical environments into e-commerce channels comes with its own unique set of logistical considerations, from packaging to quality control.

“Early on…there was kind of that scramble, everybody trying to figure out how do we move and maneuver and position ourselves to still be in business in some way, shape or form,” said Jeff Leake, business development at rework company Quality Corrections and Inspections. “And the challenge the brick-and-mortars were facing at that time, one thing that companies were looking to do is moving some of that inventory to the ecomm channels, so they could fulfill potential sales.”

While this trend has slowed down, Leake sees the potential for this strategy to pick up again if cases rise and stricter lockdowns return. Even beyond the pandemic, there are other reasons retailers may choose to ship bulk brick-and-mortar inventories to online fulfillment.

“At the end of a season, stores may return product back to us so the brand can sell online or in a secondary market,” said Maria Haggerty, CEO of third-party logistics firm Dotcom Distribution.

Whatever the reason, brands and retailers are faced with the challenge of getting these goods e-comm-ready.

For the brick-and-mortar environment, apparel items are typically merchandised on hangers or folded tables. Aside from gathering up merchandise, getting these goods ready for e-commerce distribution centers could mean removing hangers and security tags, placing product into polybags and possibly replacing hangtags.

While merchandise that is slated to sit in a warehouse is typically encased in plastic, protecting individual units, that is not the case with items on a sales floor. Product sitting in a stockroom may or may not be contained in boxes or bags. Additionally, garments in a fulfillment center are often not handled as much as merchandise at the store level. Since brick-and-mortar goods may have developed dust or damages along the way, experts stress the importance of quality assurance during the reallocation process.

There is a case for quality checks, even if the merchandise has already been through the process before. “Typically, companies, whether they’re getting it to a retail channel or online channel, they do that [quality assurance] check before it gets to those channels and ends up in a retail setting and in a customer’s shopping basket,” Leake said. “So, usually the goods have made it past that phase, but when you’re doing this reprocessing, there’s the risk of potential quality issues.”

If quality issues are found, this might mean that merchandise needs to be spot cleaned or repaired.

At the warehouse, quality assurance also means ensuring that the right products arrived from the brand. According to Todd Bills, chief logistics officer at ShipBob, the company’s receiving team inspects goods and takes photos to ensure that there is a match with what was expected.

If multiple fulfillment centers are available, a retailer needs to consider where to house its inventory. For instance, a SKU that sells well in a certain region might warrant a greater stock in that location. Alternatively, goods could be coming from multiple stores to a single distribution center, meaning that many different teams handled the packaging. Retailers can develop their own blanket procedures to streamline the work needed on the fulfillment center’s part. But a best practice is to follow the distribution center or 3PL’s guidelines.

Some fulfillment companies and distribution centers might have specifications for what size pallet or carton they can accept, which could slow down receiving or add charges. But in the end, one of the most important factors is labeling.

“It can be anything under the sun,” said Bills. “As long as it’s packaged and labeled correctly, you can bring it to us in pretty much any condition, whether it’s loose, whether it’s case packed.” Proper labeling also helps to ensure that the correct SKU is sent, since picking and packing typically relies on scanning for verification.

Inside the carton, there are also best practices depending on channel. For brick-and-mortar, this would mean shelf ready, while e-commerce shipments should have items protected but loose.

“Ideally, most of getting a product ready for an e-commerce customer happens before the item gets to our warehouse,” said Haggerty. “When Dotcom Distribution partners with a brand, we guide them in this area. We want them to do this further up in the supply chain, as the more a manufacturer or supplier can do to make an item ship-ready, the faster and cheaper it is for the brand.”

When items arrive that are not ship-ready, third-party partners can take care of prepping product. This could range from labeling, kitting and tagging to steaming. Depending on which online platforms goods are being sold through, there might be specific tagging or packaging requirements that need to be addressed. For instance, in certain cases where merchandise was moving to an international market, Quality Corrections and Inspections has replaced care labels to adhere to local regulations.

E-commerce packaging also considers presentation. ShipBob has worked with merchants on value added services such as branded unboxing experiences to make an impression on online shoppers.

However, one of the simplest ways to delight the customer is delivering on expectations. Getting the right product to the right customer in the right condition is even more important during the pandemic, when it’s more difficult to remedy a problem. For instance, if a security tag makes it through to the end consumer, it becomes a hassle to return the item or get to a store to have it taken off.

“The expectation—even though it’s showing up in two days—is so high, and then the fact that if it doesn’t fit or if it’s not the right product…not only is there the emotional letdown of it not being perfect when it gets there, the instant gratification, but then also the frustration, along with the disappointments where now you have to go through the steps to try and get the right product sent to you, return the product that you currently have,” Bills said.

In an omnichannel world, one remaining challenge is packaging merchandise from the manufacturing stage for full flexibility regardless of sales channel, since the needs of e-commerce and brick-and-mortar vary. However, there are some best practices that are universal.

For merchandise that is packaged in boxes, there should be as little extra space possible. This will not only prevent merchandise from rattling around and getting damaged, but it will also save on shipping costs. An easy way to secure shoeboxes for the e-commerce environment is by taping the lids. Along with peace of mind, Todd noted that it creates a gift-like presentation for the shopper.

“The thing everyone has to think about is the balance between representing the brand experience, and cost,” Haggerty said. “From a warehouse perspective, fewer box sizes—ideally, flat pack boxes or polybags—are better than clamshells that take up more space. Too many box sizes creates time and space inefficiencies and increases costs.”

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