Retail’s physical footprint is becoming its greatest logistics asset. As e-commerce growth stabilizes and shipping costs rise, large retailers are pivoting from centralized fulfillment centers to store “hubs” that shorten delivery distance and improve same day reach. The challenge? Translating that playbook to reality needs key components like orchestration systems, data visibility, and operational muscle.

Redefining the Store from Sales Outlet to Fulfillment Node: With e-commerce growth flattening and shipping costs increasing, activating stores as forward fulfillment nodes reduces transit distance, shortens processing time and leverages existing real estate.

• Define radial zones around each store, example: 10-15 miles for same day (or) 1 day ground zone to capture next day reachable customers cost effectively.
• Optimize inventory as a pooled network rather than isolated at each store level. This will require accurate counts, chain of custody discipline and shared visibility across the network
• Run cost to serve comparisons between central fulfilment and store fulfilment. Reach your target cost per unit improvement before scaling broadly. Consider total landed cost, including the cost of transport to stores and in-store picking.

Building the Orchestration Layer: While fulfilling from store nodes, without smart sourcing of orders to the optimal node (store/warehouse), you risk missed promise, over utilizing stores, inaccurate inventory and diminished returns.

• Establish rule-based routing with defined cut off time, inventory availability, distance rules as the initial layer of orchestration.
• Exception feedback loops to track when orders ship from non-optimal nodes, unintentional splits occur and keep track of exceptions and refine logic as you scale.
• Prioritize carrier interfacing & pick up at stores by establishing a single interface layer and create an efficient carrier pickup process from stores to avoid bottlenecks.

Aligning Metrics: When stores serve as fulfillment nodes, leaders need visibility into fulfillment execution metrics. Otherwise, you lose sight of cost, service and customer experience.

• Track “First-Attempt Success” - percentage of deliveries completed without re‐attempts. Each re-attempt can meaningfully add cost and reduce customer satisfaction.
• Monitor “Latency” – time taken from item pick at store to carrier scan. High latency often signals inefficient pick/pack/staging process at the store.

Pragmatic Plan to enable store-based fulfillment for your business

1. Map store fulfillment readiness: identify which stores have backroom space, easy carrier access, and markets have high customer density within a 10-15 mile radius.
2. Pilot in small scale: choose 5-10 stores, enable fulfillment within defined zones for a 4-8 controlled week pilot, and measure OTD, CPU and exceptions.
3. Build a simple dashboard: create a view that captures order origin (store vs FC), fulfillment node, delivery zone and delivery outcome.
4. Align store incentives: adjust store manager KPIs to include fulfillment metrics (e.g., pick score, latency) alongside sales metrics.
5. Identify orchestration gaps: capture current routing rules, note exceptions and document operational constraints (carrier pickup windows, store staffing, inventory accuracy).

By converting stores into fulfillment assets, retailers unlock speed, flexibility and cost efficiency. The first real payoff appears when you see consistent improvement in speed to customer and sustained drop in exceptions.

How to avoid most common pitfalls

• Fix inventory accuracy first, before launching stores as fulfillment nodes.
• Do not ignore customer experience. Measure OTD, delivery success rate along with cost metrics like CPU.
• Stabilize processes before automation your routing logic.
• Invest in upskilling your store staff, to support fulfillment duties like pick/pack/ship.
• Plan for returns and reverse logistics flows from day one.

Sai Teja Yerapothina is a senior leader in last mile logistics and fulfillment engineering, with deep experience in global operations, multi carrier orchestration, routing, reverse logistics and EV fleet integration. He is currently Senior Director of Last Mile Delivery at Walmart leading strategy and operations. Connect with him on LinkedIn: linkedin.com/in/saitejayerapothina.