Predion Fulfillment

Over the past five years, the most successful retailers have been dramatically increasing

the use of stores as part of their omnichannel fulfillment chain.

 

Most retailers’ existing systems are built to optimize for the cost of shipping. Many now ship from stores near the customer rather than from a distribution center, while others employ strategies such as minimizing split shipments to identify the lowest cost per individual order. However, cost-minimization alone is not enough to maximize profit capture.

 

The next frontier in terms of improving profitability is expanding the fulfillment decision process to consider not just the expected cost of shipping the item, but also the likelihood that the considered item will sell at full price at its current store location. The profit impact of avoiding markdowns and capturing full price sales from this decision can be several times more significant than any shipping cost differences.

 

While fulfillment represents a new frontier, the same technology can be used earlier in the process to impact how to allocate product by location more profitably, updating as sales patterns develop and change, and even to tailor initial product assortments.