Dick's Ship-from-Store Lowers Cost, Increases Speed

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Dick's Ship-from-Store Lowers Cost, Increases Speed

By Nicole Giannopoulos - 09/24/2013
Dick's Sporting Goods is leveraging omnichannel fulfillment. Over the past four years, the retailer has rolled out omnichannel capabilities, providing the ability to create online orders in stores, create an endless aisle experience for customers, and ship orders placed in-store for free. In addition, Dick's has utilized vendors to ship directly to customers for several years, improving inventory turn.
 
In 2012, the retailer piloted ship from store, "We launched with 35 stores in May; and by holiday 2012, we were utilizing 115 stores around the country, " said Michele Willoughby, EVP of inventory, supply chain and e-commerce for Dick's Sporting Goods on a recent call with analysts. "Now have every Dick's store participating in this program. This has many benefits: it allows us to connect online customers with any inventory in any store; it improves inventory utilization; it lowers shipping costs; and improves speed to our customer, allowing us to now compete on speed. 75% of our orders are shipped to a customer within a 15-mile range of a Dick's store."
 
Later this year, Dick's will pilot buy online/pickup in-store, which it believes will be a great benefit to customers as well as drive the customer into the store. In 2014, the retailer plans to pilot ship-to-store capabilities allowing it to ship large, heavy items such as treadmills to stores for customer pickup or cheaper local delivery. All fulfillment options from vendors in the retailer's stores will significantly reduce the transaction fee associated with them.
 
In terms of supply chain, the retailer has deployed several major systems to optimize the movement and management of inventory. This technology automates distribution centers; tracks and coordinates domestic and international freight; monitors the performance of vendors; helps to control costs; and provides real-time insight into the productivity of the retailer's network.
 
"The productivity and accuracy of our supply chain has increased dramatically since we began investing in information technology just a few years ago," said Matthew Lynch, CIO and SVP for Dick's Sporting Goods. "Currently, our teams are evaluating how store-based fulfillment aligns with our future investments in supply chain."
 
Systems are essential to the efficient operation of Dick's business and are integral to the way the retailer plans, operates and grows the company. Seven of the retailer's core merchandising and inventory control systems have been carefully selected to optimize the core elements of the business, specifically financial planning, assortment plans, space management in stores, pricing controls across all channels, allocation of seasonal and fashion merchandise, replenishment of perpetual inventory, and key performance indicators and management controls.
 
This year, Dick's will implement its latest system, the final phase of the core systems transformation, which will help to better understand and forecast consumer demand across all businesses. This is especially important in businesses that leverage common inventory.
 
"Our goal is to solve the ultimate retail challenge: the right product in the right size and color at the lowest cost, priced by channel and region, available at exactly the right time in exactly the right quantity and, of course, located right where the customer wants it."
 
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