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Out of stock online? Here’s what Zara is trying to do about it.

Fast-fashion giant Zara is equipping its stores to also ship online purchases, betting that the move will boost sales of full-priced items that can be delivered to customers more quickly than from a warehouse. According to the Wall Street Journal, around 2000 stores in 48 countries are helping to fulfil online purchases.

“This is something very, very strategic for us, this idea of full integration between store and online stockrooms,” Inditex Chairman and Chief Executive Pablo Isla told analysts in June. The ability to offer a shopper what she wants, and quickly, increases the likelihood of a full-price sale, Mr. Isla said.

Zara’s efforts are part of a larger push among retail shops to rethink how they can better use their network of  brick-and-mortar stores to compete with Amazon.com Inc., whose dominance in the retail industry has depressed profits and set new standards for speed of delivery.

“There has been a trend lately to think of a store as a liability,” Forrester Research Inc. principal analyst Brendan Witcher said in the quote published. “It’s an asset—but you need to learn to use it correctly.”

A product could be out of stock online but available at a store near where the online shopper lives. With the new ship-from-store option, that store could then mail the product to the online shopper’s address. This way, the product would be able to reach the customers place even quicker than before.

Implementing ship-from-store initiatives is just one way to tackle the bigger problem of mismanaged inventory. Retailers world-wide, from big-box stores to fashion brands, lost an estimated $686 billion (S$914b)  in sales last year because items were out of stock, according to a June report by research and advisory firm IHL Group. The firm estimates that retailers lost another $675 billion last year because of overstock, which triggers markdowns.

Traditionally products are only shipped out from warehouses to customers. As online shopping grows, retail companies are working to merge their inventory for online and in-store purchases rather than keeping separate stocks, to minimise lost and discounted sales.

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