Inside a leading retailer's supply chain during peak season

More than 95% of a major omnichannel retailer's digital orders are now fulfilled directly from stores, and over half are completed through same-day options such as Drive Up, Order Pickup or Shipt. -  Target FY2024 Investor Report

By using its retail footprint as a distributed logistics network, a leading omnichannel retailer shortens delivery routes, reduces fulfillment costs and provides shoppers with the speed and flexibility that define the modern omnichannel experience.

While Q4 is a scramble for most retailers, this organization views it as a systems test that its store-as-hub model is designed to pass.

From centralized warehouses to store-led fulfillment

Before the shift, the retailer relied on a traditional distribution center (DC)-centric model. It was efficient at scale but struggled under the weight of peak-season volatility. 

Surges in e-commerce orders often overwhelmed regional distribution centers, leading to delayed shipments, increased transport miles and soaring last-mile costs.

The e-commerce boom intensified this strain. Between 2019 and 2024, online order volumes more than doubled, while consumer patience declined. 

According to McKinsey, retailers now lose up to 35% of potential conversions if fast-delivery options are not available at checkout.

Leadership realized that adding more warehouses was not the answer. The real opportunity laid in using existing assets differently—transforming physical stores into intelligent execution nodes capable of handling last-mile fulfillment locally.

How the store-as-hub model works

This retailer re-imagined its stores from the ground up: not only as shopping destinations, but as operational engines within a wider digital ecosystem.

The transformation began with a multi-year investment in Warehouse Management (WMS), Transportation Management (TMS) and Order Management Systems (OMS).

These upgrades created a unified layer of visibility across all channels and enabled dynamic decisions about which store should fulfill each order in real time.

• WMS modernization enabled in-store staff to pick and pack online orders with the same precision as a fulfillment center.
• OMS integration created a central decision engine that prioritizes speed, inventory accuracy and delivery promise.
• AI-driven forecasting anticipates demand surges down to the SKU level, ensuring stores are positioned where demand will occur, not just where it has occurred.

The impact was transformative.

A leading omnichannel retailer reported that its store-as-hub model reduced average fulfillment costs by up to 40% compared with traditional ship-from-DC methods, while also improving delivery speed and inventory utilization - Target 2024 Annual Report

Optimizing supply chain execution: unifying orders, inventory & delivery

During the 2024 holiday season, a leading omnichannel retailer processed more than 200 million same-day fulfillment orders—a 10% year-over-year increase—without expanding its DC network.

Behind the scenes, this resilience came from the ability to sense, decide and act continuously across thousands of fulfillment nodes.

• Order orchestration: The OMS selects the optimal fulfillment source (store, hub or DC) based on proximity, stock and delivery promise.
• Inventory synchronization: All nodes share a single version of inventory truth, preventing costly oversells or duplication.
• Last-mile optimization: The TMS assigns carriers dynamically, balancing delivery windows, cost and route density.
• Workforce alignment: Predictive analytics forecast in-store order volumes so staffing levels can flex to match real-time demand.

Every decision, from picking to packaging to delivery, happens within one synchronized execution loop. This is the organization's quiet advantage: speed through synchronization.

The ESG impact of store fulfillment

Speed is only part of the story. Store-led fulfillment models also play a central role in the retailers sustainability roadmap.

By shipping from local stores, the company dramatically reduces “empty miles” and improves delivery density; cutting transport emissions without compromising service. Each shorter route means less carbon output, less packaging and more efficient fleet utilization.

The organization's science-based climate goals aim to reduce Scope 1, 2 and 3 emissions and its store-as-hub design directly contributes to those outcomes. 

It’s an environmental, social and governance (ESG) story rooted in operational design; proof that execution intelligence and sustainability can move in lockstep.

Lessons for supply chain leaders preparing for Q4 peak season

This peak season playbook offers a lesson for every retailer facing similar pressures: 
optimized execution is now the currency of resilience.

Modern supply chains can no longer rely on fixed hierarchies of distribution. They need networks that adapt—shifting fulfillment from central DCs to stores, from static lanes to dynamic routing, from linear workflows to real-time orchestration.

The question for leaders isn’t “Do we have enough capacity?”  It’s “Can our network decide fast enough and smart enough to deliver on every promise?”

Infios insight: building the foundation for adaptive, store-led execution

At Infios, we build the systems that make this possible. Our AI-powered, modular and intelligent execution platform connects order management, warehouse operations and transportation into one adaptive ecosystem—enabling the same orchestration intelligence that powers leading omnichannel retailers.

With unified visibility and predictive routing, Infios helps enterprises turn distributed networks into performance engines.