Macy's (NYSE:M) has nearly doubled the size of its ship-from-store program over the summer and may now be handling tens of thousands of orders per day, according to the Cincinnati Enquirer.
The department store chain has added fulfillment departments to 200 stores this summer, increasing the total to 500. One store in the Cincinnati area, which has been part of the ship-from-store program since 2012, on a typical day ships 50 to 60 orders to Macy's customers who ordered items that they wanted to buy in another Macy's store that was out of stock. If that's typical, Macy's could be shipping between 25,000 and 30,000 orders every day from the 500 stores. (Macy's hasn't given out actual numbers for the ship-from-store program.)
That's a typical day. During one of the chain's one-day sales, the volume is typically 75 to 100 orders. During the holiday season after Thanksgiving, the store handles 300 to 400 orders a day.
The in-store fulfillment departments are also used to fulfill online orders in cases where stores have inventory that isn't selling locally. Which store the order is directed to depends on inventory levels, turn and how far the store is from the customer, which affects shipping cost. The result is that fewer customers leave out-of-stock Macy's stores to buy elsewhere and less merchandise ends up sold at clearance prices.
Macy's originally began building up the ship-from-store system on a piecemeal basis, and the chain still carves space for the fulfillment areas out of unused stock room or office space and uses associates who would normally stock shelves and set up displays for collecting items that have been ordered. The biggest in-store cost: Replacing 40,000 point-of-sale systems so customers can order the items that are out of stock locally when they check out.
- See this Cincinnati Enquirer story
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