Thanks to Wolfgang Jung at IBM Deutschland GmbHR for telling me about how REI Inc., the outdoor sporting goods retailer, is using IBM E-Commerce Software for local fulfillment. It is great to learn that there are more retailers doing this than I realized. According to a story in Internet Retailer, REI’s in-store pickup is producing far more online sales than had been expected. REI Inc. introduced in-store pickup as a free-shipping option for online orders last June and received $26 million in orders during the next six months.The in-store pick-up service became instantly popular even though there was no advertising for it.
Forty percent of REI’s online orders have local fulfillment through their roughly 70 stores. In some categories with high shipping costs, such as canoes, REI has seen an 800% increase in sales. This brings in a new dimension to local fulfillment. It isn’t just for the convenience as I had outlined in the first story, but additionally for items which are expensive to ship and where the customer doesn’t mind picking it up. They gain the information-oriented benefits of shopping on the web plus the ability to pick up the item at their convenience. According to Internet Retailer, REI executives say that they are gaining an average of $90 in additional sales in the store when the customer comes for the pickup.
It sounds like REI is doing a really good job of “multi-channel” marketing. Buy it online, pick it up at the store. Buy it at the store, learn more about it online. They are obviously doing a great job with inventory management also. The IBM WebSphere middleware allows them to connect their web applications with their database so they know what they have and where they have it. This is a key part of becoming an on demand e-business.
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