The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
Lamps Plus’s expectations to double online sales this year would not stand were it not for a new web-based fulfillment system Lamps Plus started using April 1.
For multi-channel retailer Lamps Plus Inc., business has been strong at LampsPlus.com and on in-store web kiosks. “This year, we expect to ship about $35 million in online and in-store kiosk orders, or an average of 1,000 orders a day,” says Bill Gratke, director of planning and supply chain management. “That’s double our shipments from last year.”
But those growth projections would not stand were it not for a new web-based fulfillment system Lamps Plus started using April 1, he adds. During last year’s holiday shopping season, Lamps Plus’s online orders took an average of 5-7 days to fulfill, with some taking as long as 14.
Part of the problem lay in the way its old system, which was designed to serve bulk shipments of lamp parts to retail stores, split the processing of orders into different segments for different parts of lamps, so that its pick-and-pack workers would receive an order for the base of a lamp at a time different from when they received an order for the bulb fixture. Although that system works fine for bulk shipments of parts that get assembled in stores, it didn’t suit shipping assembled lamps to individual consumers. It not only required a longer time to complete consumer orders for shipment, but it also resulted in using multiple packages to ship a single product. “We had a great web site, but fulfilling orders was hard,” Gratke says.
Lamps Plus considered building a new fulfillment system, but instead opted for the relative ease of using a hosted web application, Gratke says. It took 120 days to build the links between the LampsPlus.com order management system and the web-based Escalate Fulfillment application from Escalate Inc., but Lamps Plus needed no training to begin using the new system on the first day, he says.
Online orders are now sent from LampsPlus.com to the Escalate application, which consolidates them and forwards them to the pick-and-pack department, allowing orders to be fulfilled in two days. The system supports the consolidation of packaging materials, resulting in a 30% reduction in the number of shipped packages and a drop in overall shipping costs. “We expect to see a return on investment in 90 to 120 days,” Gratke says. m