Increasing profit per square foot for retailers with fulfillment

by | Oct 20, 2016 | Digital retail, Omnichannel, Retailers, Solutions

Shipping and fulfillment has become a big deal to retailers’ bottom lines, especially as everyone gears up for the impending holiday season. The big push last year was about retailers finding vendors that could ship directly to the consumers and figuring out how to manage the returns.

This year, retailers are focusing more on how brick-and-mortar locations can take on more order fulfillment using their store inventories to ship to customers directly, whether it’s fulfilling customer orders, managing the returns or handling a customer coming in to pick up an online order. And most of all, trying to do all this while providing an expanded assortment of products online without locking down so much inventory space within the store.

Inventory data can help in-store and out

Having access to your vendors’ inventory position in these in-store situations is key, as well as item details, like other sizes and colors that may not be available in that store. This information can make it easy for a salesperson to check out whether they can get the right size and color. Ultimately, this could help the salesperson keep the consumer in the store longer, or still make the sale if a consumer can wait for a couple days for delivery to their house or at the store for in-store pickup.

For example, imagine a shoe store that has average sizes for men, between 7 and 13. If a person wears size 15, it’s a little hard for them to find that one size. But they’re more likely to return to that store if the store staff can track down that size from one of its vendors. The staff needs to have confidence in the information from the vendor, knowing they can promise the exact item to the consumer to be delivered within the needed timeframe.

With visibility to in-store inventories across their chain, retailers with multiple locations can keep the consumer from driving to their competitor’s store as they can have the exact item sent from one of their stores without any fuss. We’ve seen toy stores and bookstores use this with great success. This can save a sale from being lost, and possibly gain a loyal customer.

Small store footprint, super-sized inventory

Profitability per square foot can be a challenge for stores with a smaller footprint. They don’t have the option to carry a broad inventory selection, whether it’s fashion, shoes, or toys. Instead, these retailers can showcase samples of vendors’ products in the store, and then order them for in-store pickup or home delivery. This offers the potential of increased profitability and customer satisfaction, without having to move to a bigger, more expensive space.

Retailers are able to increase their profit per square foot by offering a wider variety of products. But rather than increase the overall size of the store, or investing in a warehouse, retailers can have visibility to their vendors’ inventory through SPS Commerce’s assortment and inventory management solutions. This insight allows them to make more sales, benefiting the retailer and the supplier alike. However, the real winner is the consumer.

If you would like to learn more about how supply chain visibility can improve your sales this holiday season, please visit the SPS Commerce website for more details and contact a supply chain expert for answers to your questions.

Scott Bolduc

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