Order Fulfillment

Carter's increased its sales in 2013 for the 25th consecutive year, with both its wholesale and retail businesses reporting sales topping $1 billion. As sales continue to grow, the children's apparel and accessories retailer's distribution costs became inflated, prompting the construction of a fully automated multichannel distribution center (DC) in Braselton, Georgia that's already improved the bottom line and has yet to reach full ramp-up. In 2013, Carter's spent nearly $110 million on distribution, a number EVP and CFO Richard Westenberger hopes to trim when the new DC is fully ramped up later this year.

Ever since it acquired GSI Commerce, a platform for some of the largest brands and retailers, eBay has been helping enterprise retailers compete with online sellers and marketplaces. Last week, eBay officially announced it was expanding its Enterprise offerings to "mid-market" retailers (that's code for companies not as big as Toys"R"Us, but much bigger than your average eBay seller). This week, eBay Enterprise revealed it was helping brick-and-mortar retailers in a new way — by offering a "ship from store" solution that helps them make their in-store inventory available as online inventory that they can ship right from individual stores.

Amazon.com is expanding its distribution centers in a new direction, one that's unlikely to please its competitors or third-party sellers. The Wall Street Journal reports that Amazon has set up operations inside Proctor & Gamble's manufacturing warehouses, enabling it to fulfill products cheaper and faster than if the manufacturer shipped the items to Amazon's own warehouses. "The e-commerce giant is quietly setting up shop inside the warehouses of a number of important suppliers as it works to open up the next big frontier for internet sales: everyday products like toilet paper, diapers and shampoo," wrote the Journal.

Wal-Mart, Sears and Nordstrom are a few of the many retailers making a bigger bet on ship-to-store efforts this holiday season, driven by the increasing importance of mobile for the brick-and-mortar shopping experience. In addition to helping marketers bolster foot traffic, ship-to-store is influencing how marketers merchandise in-store and offer consumers access to digital tools. Savvy retailers are leveraging mobile to simplify ship-to-store orders and to build loyalty with customers that will hopefully extend after the holidays.

The best business partners do more than just act as vendors or clients; they go the extra mile to collaborate and achieve targeted goals. Within the third-party fulfillment space, that's not always easy, and sometimes collaboration means the distribution partner is literally working itself out of a job. But in the end, the collaborative process can result in key wins for both the brand and the fulfillment partner.

Best Buy is attacking the issue of online out-of-stocks with a two-pronged approach. The retailer has launched a 50-store pilot of ship-from-store fulfillment, and it will enable all its distribution centers — not just those previously allocated to e-commerce — to be able to handle digital orders. "Depending on the months, 2 percent to 4 percent of all of our online traffic doesn't result in a purchase because we don't have the inventory in our distribution centers, and we're telling online shoppers that the item is out of stock," explained Best Buy CEO Hubert Joly.  

One of the leaders in omnichannel retailing, Macy's continues to set a strong pace in the industry. The retailer will be able to fulfill direct-to-consumer orders from more than 500 of its stores and is working with 50 percent of its suppliers to stock RFID-tagged goods for improved inventory counts. Macy's is also making major investments in associate training to enhance service levels offered to informed, technology-wielding consumers.

Gap is currently working on a seamless inventory opportunity. Today, the retailer has pools of inventory trapped around the world — in countries and in stores. Gap is now unlocking the power of its inventory where any unit that leaves a vendor should go where the product can be maximized. Capabilities like ship-from-store, find-in-store and reserve-in-store, which Gap will launch later this year, provide opportunities for incremental sales.

Developing a "next generation fulfillment network" will be one of Wal-Mart's key global priorities for this year, along with investing in a global e-commerce platform that will provide the world's largest retailer with common digital technology in multiple countries. Work on the fulfillment network will begin in the U.S.

Amazon.com is now giving sellers "room for error" when it comes to issuing refunds to customers. The marketplace said when sellers refund the wrong order or issue a full refund when they intended just a partial refund, it knows correcting such mistakes can be tricky. Amazon is instituting a standard holding period for all refunds to make it easier for sellers.