Retailers’ brick-and-mortar footprint is their armor against online retailers such as Amazon. One of the ways they can leverage their stores is using them as fulfillment centers for online orders. Amazon plans to build close to ten new warehouses near major U.S. cities in 2014 and 2015 to cut shipping times. Many retailers already have stores in residential areas that can double as warehouses, where they can ship from in less time and at a lower cost.
Nordstrom, Walmart, and Macy’s adopted ship-from-store earlier than most retailers (in 2009, 2011 and 2012 respectively) and their e-commerce growth has started to surpass Amazon’s. Target has used its stores to provide same-day delivery for $10 in select areas. Additionally, ship-from-store enables retailers to manage inventory by pulling products with slow turnover to avoid excessive clearance at season’s end. Lowe’s has decreased its held inventory by 15% in four years, a $7.3 billion saving.
One of the best ship-from-store success stories is Best Buy. In less than six months after launching the program, the brand was able to beat Amazon in shipping speeds.