The online fashion retailer’s original model for distributing product from Europe to its end customers in the U.S. created high shipping costs that decreased margins. These costs made it impossible to ship returns back to Europe and forced the online retailer to sell the returned merchandise to discounters for a fraction of its value. Since returns are an essential part of the online retailer’s business, a more cost effective solution was needed.
Port Logistics Group immediately implemented a solution for the online retailer’s customers to return merchandise. Since 90% of the returns were resalable in the U.S., Port Logistics Group was able to re-stock quality merchandise and put it back on the web for future sales. Port Logistics Group integrated its Warehouse Management System (WMS) with the online retailer’s technology to improve inventory utilization and quality control, allowing for timelier, more accurate order fulfillment.
First, with the implementation of Port Logistics Group’s solution, returns were available in the online retailer’s U.S. catalog within two weeks. In addition, the online retailer achieved a substantial reduction of total logistics costs (warehousing and delivery) by implementing the JIT solution. Second, the online retailer’s U.S. business grew by more than 10 times its original size in just three years with the implementation of this supply chain solution. Lastly, the online retailer was able to package the solution by combining its online retail and catalog business expertise with Port Logistics Group’s back-end warehouse solution to create a model that it has sold to various European brands.