How Lucky Brand is Successfully Using Ship From Store

Lucky Brand, a retailer of jeans, casual wear and accessories, is adapting its operations to account for the omnichannel behaviors of its customers. This is a challenge not unique to Lucky Brand. Retailers are looking to make the purchase experience, and particularly order fulfillment, as easy for its customers as possible. That means the introduction of programs such as buy online, pick up in-store; ship from store; and buy in-store, ship to home. The backbone of such programs are integrated order management, inventory and point-of-sale systems.

In a session this week at the Salesforce XChange conference in Las Vegas, Luis Malave, vice president, applications, Lucky Brand, discussed how the company has integrated ship from store into its business with the help of Salesforce's order management and POS systems. Malave outlined the program's challenges, benefits, and concluded by offering some best practices for those in the audience that are planning to incorporate omnichannel order fulfillment into their businesses.

An inability to liquidate outdated inventory precipitated Lucky Brand's decision to launch ship from store. Separate inventory was kept for Lucky Brand's stores and e-commerce channels. For in-store inventory that was outdated, the retailer was either marking it down or selling it to an off-price retailer. In either scenario, it was losing money.

Deployment Execution

Lucky Brand rolled out its ship-from-store program in select stores as a pilot. Upon collection of learnings from the pilot stores, Lucky Brand brought all of its 200-plus locations on board. Malave cited some of the things the retailer learned during the process:

• Tackle one option at a time — pilot the program and gain learnings.
• Document the processes with field personnel.
• Find an OMS that's flexible to meet your regional configuration.
• Train store associates! They have to become part of the solution.
• Develop and implement controls. How is your program performing from the time an order is placed to the time it's fulfilled. Those metrics should be looked at every day. For Lucky Brand, the movement of inventory, which closely correlates to product margins, is the key metric.
• Ensure the correct level of packaging supplies is delivered to the stores.

Challenges

As is to be expected, Lucky Brand experienced some bumps in the road as it rolled out ship from store. Malave cautioned the audience to be on the lookout for the following trouble spots that can be common when introducing a ship-from-store program:

• store associates reject the program;
• order cancellations by store associates;
• who gets credit for the sale (store vs. e-comm);
• in-store returns for online orders;
• reporting must be aligned with what actually happens;
• additional personnel is needed to manage the program and the customer relationship;
• product allocations have to consider the omnichannel interaction;
• credit card charges, depending on shipping behaviors, could trigger fraud; and
• loss prevention reporting will need to be modified to capture the new flow of product.

Benefits

Malave cited the following benefits that Lucky Brand has realized since launching ship from store:

• Immediately expanded fulfillment sites as product is dispersed throughout its network of stores and distribution centers, enabling faster delivery.
• Better movement of inventory, resulting in improved margins and product turns.
• E-commerce returned inventory is immediately available as in-store inventory.
• Expanded store associates’ view of corporate goals. They need to buy into the program and be willing to do new tasks. We did a lot of training, which helped a lot, said Malave. “Store ops was involved in managing the program and relationship with store associates.”

“It doesn't matter where the order is placed, the key is to serve your customer,” Malave said. “You have to do this [omnichannel fulfillment]. Amazon is killing us … all of us. There's no other way around it. It's more work for us, but we have to do it.”

Malave cautioned that the return on investment might not be there at the start, especially with investments in new technology. However, if done right, it will be there in the end.

“We were blown away by the pilot,” Malave added.