I always wondered why more stores didn't do this. I had Best Buy have another store ship directly to my home when phones I wanted to buy weren't available in the local location, Bealls Florida fulfill an online order from three different retail stores, and I think I read a while ago of Walmart planning on doing this to fight Amazon Prime 2-day shipping but, otherwise, any online order would come from some warehouse somewhere no matter how many or few retail locations that company had near me. Your friend's experience of companies trying (and mostly failing, obviously) to build such capability inhouse would help explain this.

Such capability would also help retail customers by improving the accuracy of in-store inventories that appear online.

It's not an efficient way to ship stuff. Wandering around a store picking an order takes much longer than an optimized warehouse.

Square footage is much more expensive retail than in a warehouse. So the area (if there's even room for it) where you pack and ship stuff costs more.

Shipping is more expensive because you are doing a few boxes a day instead of a semi-truck a day to UPS/FedEx/USPS

It just doesn't work that well. Fine as a stop gap for a small retailer dipping their toes in the online market. But for any sort of scale the warehouse model is much better.

I think the article is way off here. Yeah, some Sam's Clubs in the middle of nowhere were converted and a high end retailer has the margins to absorb the inefficiency. But the idea that existing retail is going to convert to warehouses at any sort of scale is laughable. The real estate costs are prohibitive and they'll end up somewhere an hour away where land is cheap.

But surely even better is both? Have an online warehouse handle most orders, but have the inventory system integrated across warehouses and stores, so that if it turns out that an item is a) available in a store in the same metro area as the customer, and/or b) is out of stock in the warehouse, a store employee can pick and pack the order during a free moment and have the order arrive at the customer the next day?

If i'm understanding, the article is talking about using the retail outlet as a warehouse, where you have the items shipped from a warehouse to your retail outlet, and then shipped again to buyers.

That way product is no more likely to sit in a warehouse than it is at the retail location, there's no ship backs and markdowns are taken at the retail location. As a result inventory stays fresh and there's little to no overstock.

This does not work for all retailers as you can imagine, for for boutique stores with a limited number of SKU's it's enough to keep them afloat while still turning inventory and keeping retail locations staffed.

If something is on Amazon, why can't I pick up from Home Deport and have them ship inventory to Home Depot to replace the thing I just picked up...

https://corporate.kohls.com/news/archive-/2019/july/kohl-s-n...