Ship-from-store fulfillment of online orders is growing, but the goal is to satisfy e-commerce demands without sacrificing in-store sales.

Most fashion retailers have products that depreciate rapidly — as days and weeks pass, so do revenue and profits. Moreover, today’s shoppers expect to get any product they want, anywhere, anytime. Customers demand convenience, and retailers are challenged to properly manage multiple sources of demand, store inventories, and order fulfillment without sacrificing margins. As a result, retailers must embrace ship-from-store fulfillment that can take multiple obstacles into account, including unpredictable customer buying habits; fulfilling from stores with high walk-in demand that cannibalizes higher margin sales; the inadequacy of rules-based, traditional order-management systems limited by “either or” logic, and difficulty forecasting demand down to a precise location. 

While consumers demand fast delivery, most retailers struggle to balance multiple and often conflicting fulfillment objectives, including low delivery costs, minimized order cancellations, and reduced safety stock — all while maximizing inventory turns. 

The ALDO Group is a global creator and operator of footwear and accessory brands with 3,000 points of sale in over 100 countries. To operationalize and fulfill online orders by leveraging store inventories, it turned to Celect and its Fulfillment Optimization solution. Celect offers a cloud-based, predictive analytics SaaS platform which drives double-digit percentage revenue increases by helping retailers optimize their overall inventory portfolios in stores and across the supply chain.

ALDO can effectively leverage store inventories to fulfill online orders from the most profitable location, positively affecting margins and enhancing the “last mile” of its supply chain.

Celect optimizes order-fulfillment objectives in real time with advanced analytics, to help ALDO Group achieve the best total outcome for any given ship-from-store scenario. With Celect Fulfillment Optimization, ALDO Group is able to determine the “best case” fulfillment decision when shipping products from stores to customers.

Celect optimizes five areas in real time, for every order fulfilled from stores:

• Increase store throughput, 
• Reduce or maintain shipping costs,
• Lower pick decline rate,
• Ship from stores with higher weeks of supply, and
• Reduce split shipments.

“I would recommend Celect to anyone that has a time-sensitive product — whether it’s fashion, technology or any kind of perishables — that has limited inventory or experiences surges and lulls in supply and demand,” says Marc Chretien, senior director of e-commerce operations at the ALDO Group.

Celect’s real-time optimization capabilities help increase gross margin gains by reducing markdowns and avoiding lost in-store sales, while reducing shipping costs.  

Celect Fulfillment Optimization consumes demand patterns from across ALDO Group’s channels, and identifies opportunities at the specific product level in different store locations, reacting in real time with optimized fulfillment decisions. 

The technology intelligently leverages store inventories to fulfill online orders, while ensuring there’s optimal stock for customers visiting brick-and-mortar locations.

Some key metrics include:

• 6 to 1 ROI, resulting in seven-figure recovered margin dollars per year,
• 350,000+ units processed in real-time over Black Friday weekend, and
• Up to 12 percent higher in-store conversion opportunity, resulting from optimized ship-from-store order volume. In-store conversions increased, by sensing conditions where high demand inventory was potentially at risk from online orders. Up to 12 percent more of the online order volume was preserved (left in place) to satisfy high localized in-store demand, thereby reducing in-store lost sales and preserving margins.

“Celect connects to our order-management system, and it also receives data inputs from our business intelligence systems,” Chretien says. “It’s a behind-the-scenes technology, though, which is great because it requires very little monitoring. Once the integration and automated feeds are in place, the system optimizes on its own and only requires monitoring to ‘keep the lights on,’ as well as periodic analysis of the results and identification of future opportunities.”