10/21/09

For fashion-forward Gilt Groupe, robots help get the orders shipped on time

The web-only retailer of fashion apparel and home furnishings that it offers in timed sales finds that a robot-supported fulfillment warehouse is four times as productive as its traditional warehouse.

Paul Demery , Managing Editor, B2B E-commerce

Gilt Groupe Inc., a web-only retailer of fashion apparel and home furnishings that it offers in timed sales, has found that a robot-supported fulfillment warehouse is four times as productive as its traditional warehouse, chief operating officer Jennifer Carr-Smith says. .

Gilt Groupe, which did about $85 million in sales during its first year ended in June, sells its merchandise only to registered members of its site and only in limited-time sales that typically run 24 or 36 hours. It also often deals with small quantities of merchandise it acquires in spot buys. The overall result is that it must handle quickly changing inventory, Carr-Smith says.

With its quick first-year growth-the retailer already has 1.5 million registered members-Gilt decided earlier this year to introduce Gilt Fuse, a new contemporary fashion apparel line, and expand its men’s wear and home furnishings offerings.

To handle more fast-moving merchandise, the New York-based retailer turned to a warehouse facility in Andover, MA, operated by Quiet Logistics Inc., where much of the product-handling work is done by robots.

Though at first concerned that the facility’s northern location would slow delivery times to the 30% of its customers that live in the New York area, Carr-Smith has found the robot-supported facility to be just as quick to ship orders to New York as well as operate more cost effectively and with more accuracy than its original warehouse in Brooklyn, NY, where workers operate in a more traditional routine of hunting for and picking items printed on a paper order sheet.

When customers on Gilt.com purchase Fuse apparel, men’s wear and home furnishings products, their orders are forwarded from the Gilt shopping cart to a Quiet Logistics warehouse management system, which integrates with software that operates the robots. The robots, which come from Kiva Systems Inc. and look like brightly colored boxes on wheels, lift and move inventory pods containing ordered items to workers at packing stations.

Since Gilt started using the Andover facility in August, more than 99% of its orders handled by the Andover facility have shipped within 24 hours, Carr-Smith says. She adds that there have been only two inaccurate shipments, which were caused by errors in shipping labels.

The Andover facility’s operating efficiency enables it to take orders from Gilt.com as late as 7 p.m. to ship them out the same day via UPS, Carr-Smith says. She adds that she expects the facility to ramp up to close to 25,000 orders per week this fall and maintain that growth through the holidays and into next year. Overall, Gilt is shipping about 50,000 orders per week including its Brooklyn warehouse operation.

Gilt’s new warehouse and shipping capabilities help it complement its business model of selling through limited time periods. “With our 36-hour sales, we have a sense of urgency on our site with customers hunting for bargains and making quick decisions to buy, so we wanted get orders out to customers quickly,” Carr-Smith says.

 

 

Topics:

Electronic commerce, inventory, Kiva Systems, Online shopping, Warehouses

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