How GNC Transformed its Ship-From-Store Strategy
At the 2023 Home Delivery World conference in Philadelphia last week, two GNC executives shared how the company redesigned the role of its stores to focus on getting its products closer to customers.
GNC, which was founded in 1935, has 2,500 stores and two distribution centers (in Indiana and Arizona). The specialty retailer of health and wellness products has an extensive retail footprint. In fact, 80 percent of Americans live within 10 miles of a GNC store.
"Like all companies, COVID really changed the way we did business," said Alan Chester, chief supply chain officer at GNC. "Traditionally, we were store first. People would come in and get advice on how to gain weight, how to gain muscle, how to lose weight."
And then, of course, the world changed.
"We weren't set up to do e-commerce," Chester said. "Today's customers want speed and agility, which was beyond what centralized distribution centers were set up to deliver."
So GNC began leveraging the company's enormous store footprint by launching a ship-from-store program for e-commerce orders.
GNC uses enVista's order management system to optimize order orchestration and fulfillment across its distribution centers, suppliers and stores. Tricia Tolivar, former executive vice president and chief financial officer at GNC, discussed in an interview with Total Retail at the time how a new OMS and commerce cloud platform would allow the retailer to significantly and rapidly advance its omnichannel fulfillment capabilities.
"GNC can compress delivery time by leveraging a 4,000-plus store delivery network," Tolivar said.
Here's how it works, according to Brett Gastner, GNC's store operations specialist: A customer places an order online. When that order drops into the company's OMS, it goes to the store closest to the customer. The store will get a notification letting it know the order is there, and when the store actions the order, the associates fulfill and pack the product.
Chester said GNC began rolling out its ship-from-store strategy slowly, with FedEx as its sole carrier. Then it implemented USPS, followed by Amazon.com, and then Amazon same-day delivery. Then GNC introduced another omnichannel fulfillment option: buy online, pick up in-store (BOPIS).
"When setting this up, we had to consider a lot of things," Chester said. Things like:
- how the delivery strategy would be integrated;
- what systems and technology they would need;
- sourcing logic;
- inventory visibility across all channels;
- daily order limits per store;
- maintaining consistency with warehouse-based operations;
- the type, frequency and quality of associate training;
- the level of staffing to support the service fulfillment;
- sourcing the right supplies for packing, shipping, printing, registers and store tablets; and
- creating a dedicated pickup area.
Since rolling out its ship-from-store strategy, Chester said GNC has improved its customer experience by reducing transit time from an average of four days for delivery from its distribution centers to one-and-a-half days. It's also reduced shipping costs by 10 percent through transportation network optimization, improved linehaul utilization by 15 percent, and reduced the number of less-than-truckload (LTL) shipments.
Now, 95 percent of GNC products ship from store, compared to 26 percent before this strategy was implemented.
"It really has transformed our network," Chester said.
Chester said the three keys to GNC's success in shipping e-commerce orders from its store locations are:
- having plenty of inventory;
- having the right technology in place; and
- having extensive training for its store associates.
In closing the session, Chester teased how GNC would continue leveraging this capability through drones that can deliver products to people's homes in 20 minutes or less. He said a formal announcement from the company is expected soon.
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