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Report: E-commerce Fulfillment Challenging for Store Managers

Even with consumers turning to e-commerce in greater numbers each year, physical stores are more critical than ever.

Services like buy online, pickup in store have become an important part of the puzzle for retailers looking to increase traffic and decrease the costs associated with e-commerce sales. They also give shoppers another reason to come into their physical locations—and once there, retailers know they’re likely to make additional purchases.

The same is true of in-store returns, which are also an important part of enticing consumers to shop online. In addition to pickups and returns, store staff are also managing fulfillment from store shelves, which alleviates the need for retailers to have to predict how much merchandise to earmark for online orders.

Getting the in-store/online connection right is important these days given the volume of digital transactions that pass through stores. For example, a third of Kohl’s online sales flows through stores, while up to 80 percent of holiday e-commerce sales are fulfilled in the stores at Target.

Supply chain software provider JDA predicts this multichannel sales model will continue to force retailers to change.

“It’s not a question of whether stores will evolve, but rather a question of ‘to what?’ Successful retailers are looking at how quickly their supply chain and store operations need to react and adapt,” said Jim Prewitt, vice president, retail industry strategy at JDA.

Retailers are already retrofitting stores and installing gadgets to make their fleets more grab-and-go friendly for online shoppers. But the challenge of linking e-commerce and stores is not just a technological one. Store employees play an important role in providing a smooth, easy experience for shoppers.

The second annual JDA Voice of the Store Manager survey reveals the degree to which these employees—who are now juggling their traditional roles along with the new demands generated by e-commerce sales—are equipped to live up to consumer expectations.

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Of the 252 store managers polled, 41 percent say their stores offer BOPIS, 44 percent have ship from store capabilities and 38 percent allow shoppers to return online goods to stores.

In many cases, stores have staff allocated to BOPIS (65 percent), buy in-store ship to home (61 percent) and items fulfilled from other stores to either home or store (49 percent).

Because they see the value in having this foot traffic in stores, 36 percent of retailers offer a discount for those that use BOPIS, while another 14 percent are considering doing so.

But with all of this merchandise touching stores, store managers face challenges. For 29 percent of respondents, order fulfillment and limited staffing are their top concerns. Twenty-four percent have issues with inventory visibility and 18 percent say scheduling workers is a problem.

Nearly a third of inventory related headaches stem from inaccurate data and limited stock and slow replenishment. To aid in visibility, 64 percent of managers use some form of technology.

To help ease staffing woes, a quarter of the store managers indicated they’re exploring ways to augment their workforce with short-term contractors and freelance workers. And as the holidays approach, the type of temporary staff they’re looking for is evolving.

This holiday, 60 percent of respondents will hire the same number of temporary help as they did last year, while 24 percent will pick up more employees. Those jobs may not be customer facing, however. Forty percent of managers intend to use the seasonal hires for fulfillment in stores or warehouses. Of those in rural areas, that number increases to 61 percent. A third of all store managers say they’ll allocate seasonal help to BOPIS specifically.

The trend toward fulfillment rather than customer-facing roles will accelerate, according to JDA.

“In the future, we foresee some stores evolving into distribution centers, fulfilling 100 percent of customer demand, while others will morph into showrooms with centralized fulfillment,” Prewitt said.