A major retailer specializing in imported home furnishings and decor picks, packs, and ships e-commerce orders in a scalable fulfillment center that processes up to 15,000 orders per day.
This facility functions as a dedicated e-commerce distribution center, and it extends the company brand by offering the same retail store merchandise online along with many additional items not available at its stores. The Midwest location effectively supports an omni-channel strategy by serving customers located in the Eastern side of the USA and Canada, approximately 60% of the total e-tail volume.
The facility typically holds 9,000 SKUs, but has capacity for more. Most orders include two to three line items; approximately 25% are single line orders. Most orders are delivered to a home or business address, but the omni-channel strategy allows items ordered online to be picked up and returned if necessary at any of its retail stores.
To support the customer-direct channel, the retailer previously processed and shipped all e-commerce orders from a retail store fulfillment center in the Southwest.
The volume of online business (approximately 20% of revenues and growing), along with the desire for increased productivity, created an urgent need for a new distribution center. The new distribution center would need to support future growth and high order/inventory accuracy while improving operational efficiency. Network analysis indicated the
Midwest as an ideal location. In addition, the analysis supported the premise that a dedicated e-commerce center would be more effective than a multi-channel center.
A retail store distribution center was located nearby and could provide inventory to the e-commerce distribution center.