Why ‘ship-from-store’ is the ‘path to profit’ for Australian retailers

Soaring rents, inflation, rising costs, and supply chain disruptions make retail in Australia a tough place to be. However, 'ship-from-store', which surged in popularity during the global pandemic, is now being increasingly adopted as a way to reduce shipping costs, increase delivery times and optimise inventory management, all contributing to higher margins. 

A new report from Shippit claims that one in five retailers across Australia and New Zealand are now investing in ship-from-store capabilities, transforming their bricks-and-mortar locations into local fulfilment hubs to meet rising consumer expectations and counter the influence of global retail giants like Amazon, Temu and Shein.

With delivery now a make-or-break moment for consumers, expectations for speed, accuracy, and transparency have never been higher. A single poor delivery experience is enough for 64% of shoppers to blacklist a brand entirely. Over half (51%) of shoppers (aged 18-34)  say their delivery expectations have risen as a direct result of Amazon, with 82.8% of retailers expressing concern about the growing dominance of the global retail giant.
 

The Benefits Of Ship-From-Store

Reduced Shipping Costs

Fulfiling online orders from nearby stores means retailers can combine multiple items for the same customer into one shipment, while reducing the distance packages need to travel, reducing transportation expenses. Stores are often closer to customers than centralised warehouses, leading to faster and cheaper last-mile delivery. 

Faster Delivery Times

Ship from store enables retailers to offer faster delivery options, meeting customer expectations for immediacy, while store staff can quickly locate and pack items, streamlining the fulfilment process.

Improved Inventory Accuracy

A distributed Order Management System capable of inventory transparency enables retailers to route orders to the most optimal location. This capability empowers retailers to fulfil online orders swiftly, meet rising customer expectations, and maximise margins. Ship-from-store can help reduce overstocking and move out older or slower-moving inventory, freeing up space and capital.

Increased Sales and Customer Satisfaction

Fast and reliable delivery, coupled with convenient in-store pickup options, can drive more sales and lead to higher customer satisfaction and loyalty. Ship-from-store can help handle increased order volume during peak seasons, preventing bottlenecks and delays. Faster delivery times and accurate inventory can also lead to fewer returns.
 

Where retailers should start with Ship-From-Store

Invest in technology

Implement a robust system for managing inventory, orders, and shipping across all channels. 

Fluent Commerce's Distributed Order Management System (Fluent Order Management) includes a flexible rules engine that dynamically selects the optimal fulfilment location based on proximity, stock availability, cost to serve, and advanced sourcing logic. Ensuring the right store gets the correct order, every time.

Train store staff

Equip store employees with the necessary skills and tools to handle online orders efficiently. Staff should be provided with clear, intuitive workflows to pick, pack and label without disrupting the shop floor.

Offer flexible delivery options

Provide customers with a range of delivery choices, including in-store pickup and various shipping speeds. 

Start small 

You don't need to roll out ship-from-store to every store from day one. Focus on stores that are best positioned to deliver results quickly, such as Metro stores with strong stock and high local demand. Regional stores that can extend your delivery footprint or low-footfall locations that can absorb online fulfilment tasks easily. Does the store have reliable WiFi and a printer? Is there room for picking, packing, and staging? Can staff manage fulfilment alongside in-store responsibilities? A pilot group of 3–5 stores is often ideal. Prove success, refine workflows, then scale.

Make sure to track performance indicators such as shipping costs, delivery times, and inventory turnover to identify areas for improvement. 

Brands such as Freedom, Barbeques Galore, Munro Footwear Group, and T2 Tea can now synchronise inventory and order orchestration with real-time delivery optimisation, making ship-from-store not only viable, but scalable.

As Nathan Simmons, Head of Omni-Channel and Technology at Barbeques Galore confirms:

"We really feel the 'Amazon effect' every day. Customers expect fast, reliable delivery no matter what they're buying. For us, that's especially challenging when we're talking about big, bulky items like BBQs, outdoor furniture, or large accessories. Traditionally, shipping these products could be a logistical headache, with high costs, delays, and frustrated customers.

Ship-from-store has completely changed the game for us here. By turning our stores into local fulfilment hubs, we can get products to customers faster, cut down cancellations, and keep freight costs under control. Of course, this is just one of the ways we move products. Our overall delivery model is flexible, designed to meet the different needs of our customers.

What excites us is that this approach doesn't just help us compete with global giants like Temu or Amazon, it lets us use our local presence as a real advantage. Our stores aren't just points of sale anymore, they're part of the supply chain, helping us get products closer to customers, respond quickly to demand, and provide a more personal, reliable experience. 

At Barbeques Galore, we've always prided ourselves on giving customers more than just a product, we want to give them confidence, convenience, and a little piece of that Aussie outdoor lifestyle. Ship-from-store is helping us do that better than ever."

By strategically implementing ship-from-store, retailers can unlock significant cost savings, improve customer satisfaction, and ultimately achieve higher profit margins. 
For more information about how to implement 'Ship-from-store', please read this ebook.