PetSmart is now shipping 90% of its online orders from stores instead of distribution centers
In 2023, PetSmart began shipping some of its online orders from the stores themselves instead of its seven distribution centers. Just two years later, 90% of PetSmart’s shipped orders placed online or through automatic, scheduled deliveries are now fulfilled from its 1,600-plus stores.
That’s according to Greg Fancher, PetSmart’s evp and chief information technology officer who joined the pet retailer from fashion brand Express in 2023. At the Shoptalk conference in Las Vegas, he explained to Modern Retail how the company has rapidly scaled up this program while working to overhaul older systems for handling online and in-store orders. He said shipping from stores gets products to customers faster and at a lower cost.
Out of those orders shipping from stores, 70% of them are to customers within 20 miles of the store, allowing the company to quickly deliver to customers and offer same-day delivery through services including DoorDash, which is embedded on PetSmart’s app and website, as well as Instacart, Uber Eats or Shipt.
Another benefit of shipping from stores, in Fancher’s opinion, is that the same people picking, packing and sending orders are often the same people shoppers know from the stores, and not some random person online.
A PetSmart spokesperson said the company has not closed any distribution centers in response to the large growth in shipping from stores. She said the distribution centers are now focused on getting products to the stores as well as fulfilling orders of larger items or items not in stock in stores. This has also allowed the retailer to no longer need to rely on third-party fulfillment partners, which it had previously done to speed up online orders.
Melissa Minkow, global director of retail strategy for CI&T, said that ship-from-store isn’t as optimal for retailers who don’t have a high number of stores close to where customers live. “In terms of facilitating speedy delivery the fastest, that really comes down to whichever model has more locations that are closest to the consumers doing the urgent ordering,” Minkow said.
Minkow added that for those who are able to make ship-from-store programs work, there are potential downsides.
“Distributing from stores may limit the amount of product you would buy because of less storage capacity, which can more easily lead to stockouts,” Minkow said. “There’s also the fact that store associates will be tasked with both stocking for brick-and-mortar shoppers and keeping the back of the house organized specifically for online orders in addition to efficient in-store replenishment.”
Overall, retailers that have relied on ship-from-store have had mixed success with the fulfillment method. In 2022, Nordstrom Rack stopped doing store fulfillment of online orders because it was difficult to find products in the stores’ “treasure hunt” environment and because it wasn’t profitable due to Nordstrom Rack’s lower price points, Nordstrom CEO Erik Nordstrom said in an earnings call at the time. Best Buy CEO Corie Barry said on an earnings call in 2023 that the retailer instead decreased its ship-from-store volume to reduce the load of large shipments and allow employees to focus on customer-facing services.
Target, however, has made ship-from-store a critical part of its offerings and fulfilled more than 97% of its online orders through stores in 2024, its CFO said last month.
Upgrading PetSmart’s older systems
Recent tech investments have helped PetSmart to enable shipping from stores. In 2023, the company upgraded to a cloud-based order management system from Manhattan Active Omni to facilitate shipping from stores. This year, the company also deployed the gStore platform by supply chain software provider GreyOrange to improve inventory visibility. The software handles location management, inventory management, digital fulfillment and store operations.
Additionally, PetSmart last year began a migration to headless web architecture — a term referring to separating front-end services from the backend — coinciding with a new home page and search engine, as well as new product detail pages and product listing pages.
“It’s not like we bought this huge service from someone; it’s all these different pieces and parts that we knit together,” Fancher said. “It allows us to iterate very quickly on experiences that are unique to our customers.”
One example of how the company has since been able to tweak its online experience, Fancher said, came when the company noticed there were a large number of cancellations for services like doggy daycare, grooming or training, and wanted to push customers more toward rescheduling.
“We were able to change it a little bit so that it’s a one-step rebook instead of canceling, and we can iterate on that to make it really, really intuitive,” he said.
With this new architecture and the need to develop code in-house, Fancher said the company had to bring in more senior engineers and programmers with experience in full-stack engineering and developing code in open-system frameworks.
“Someone on my team was describing the difference between driving an SUV and an F1 race car,” Fancher said. “It’s a lot more flexible and can go a lot faster, but it takes a certain level of skill to do that.”