Case Study

How a Premium Lifestyle Retailer Cut Holiday Shipping Costs by 20% and Increased Throughput with Less Labor

Key Benefits and Outcomes

Cut average peak-season shipping costs by 20%

Shipped 4.3x more orders during the holidays with fewer staff

Eliminated a
top source of avoidable returns

The Challenge

Growth exposed bottlenecks and waste in the retailer’s shipping operation, where manual work was slowing throughput and driving up costs.

Prior to implementing ShipJunction, the retailer’s shipping process required manual tasks and individual decisions for each order. Before picking, staff printed packing slips and hand-sorted them by product location, shipping zone, and service level. The shipping team validated each address manually, determined whether it was commercial or residential, and selected the appropriate shipping service.

That process was manageable at normal volumes, but it could not scale through November and December, when order volume spiked more than 4x. Moreover, the retailer’s reliance on air services for cross-country shipments was eating into its profits.

Shipping compliance contributed to additional costs and waste. In the state of California, any product that contains a potentially harmful chemical such as the lead in high end glassware, the retailer needs to include a Proposition 65 (Prop 65) warning along with the product to inform the customer. Due to constraints in their previous system, the retailer was unable to isolate just the California bound shipments that included the affected products to include the warning. To ensure absolute compliance with the law, they included the warning with the affected products shipping to all states. The impact of this was that certain customers outside of California, upon receiving their product, were alarmed by the warning, increasing the return rate for those products.

Looking to have a solution in place before the holiday season, leadership sought a new approach with four goals:

Simplify fulfillment
Improve pick efficiency
Reduce returns
Lower shipping costs

“

ShipJunction introduced innovative workflows to organize our orders in ways we never thought possible. It improved throughput, reduced labor and enhanced our customer experience.

”

Senior Director of Operations

The Solution

To run peak season more efficiently, the retailer needed to take fulfillment decisions off individual team members and automate them. The retailer chose ShipJunction to automate shipping decisions, organize warehouse work around business priorities, and apply compliance requirements by destination.

ShipJunction started by eliminating the manual work around address validation and service selection. It automatically identifies addresses as residential or commercial, flags incorrect addresses, and routes each package to the lowest-cost service that still arrives on time.

ShipJunction’s wave planning groups and sequences orders automatically, replacing the manual sorting of packing slips. The team builds each wave around a business priority, such as warehouse location to shorten pick paths or deliver-by dates like Christmas and Valentine’s Day.

ShipJunction allows weights to be pre-configured, which enables batch printing and shipping. With box sizes and item weights logged in the system, the retailer now prints integrated shipping labels and packing slips for its planned waves, increasing how many orders a single person can pick, pack, and ship during a shift.

ShipJunction also generates Prop 65 warning stickers with the shipping label only for orders containing affected products shipping to California.

During peak season, the retailer shifted cross-country holiday orders from air to ground. ShipJunction groups Zone 7 and 8 orders so those orders can be prioritized and shipped early, giving them enough time to arrive before Christmas using ground services.

The Result

In the first holiday season after implementing ShipJunction, the retailer shipped a 4.3x increase in holiday order volume leveraging fewer staff. With manual order sorting eliminated and labels batch printed for each wave, every order took less labor to fulfill, allowing a smaller team to keep pace with the busiest weeks of the year.

Average shipping costs fell 20% during peak season. By automatically validating and flagging bad addresses, the retailer eliminated address correction fees. In the week before Christmas, it prioritized the fulfillment of Zone 7 and 8 orders first, which allowed it to ship those orders via ground and still deliver on time.

The retailer eliminated one of its top sources of returns. By limiting Prop 65 warnings to affected California orders, it stopped losing sales to unnecessary warnings and cut the shipping and processing costs that came with each return.

“Working with ShipJunction is quick, easy and got us great results. You are able to manipulate your shipments on the fly to keep up with market demands whilst reducing issues and expenses. We have used ShipJunction for over 5 years, and I would recommend it to everyone.” – Senior Director of Operations

A multi-channel lifestyle retailer with a strong online retail presence, a large catalog business, and physical retail stores merchandising housewares and home furnishings. 40% of its annual sales are generated in November and December, meaning it experiences dramatic spikes in order volume. Holiday orders carry hard deliver-by dates like Christmas Eve, leaving no room for delays or errors.

Industry: Housewares and Home Furnishings

Headquarters: Northern California