materialhandlingupdate
BY PETER BRADLEY, EDITORIAL DIRECTOR
Behind
delivering
“wow”
When your business is built on stellar service—delivering
“wow”—you can’t afford to stumble. Zappos.com gets the
support it needs from automated handling equipment.
ORDER A PAIR OF SHOES FROM ZAPPOS.COM, AND THE ONLINE RETAILER
will have them on the way within hours and at your door the next day. They don’t fit
or just don’t suit you? Send them back, and Zappos will pick up the shipping tab.
Sound appealing? You’re not alone. That kind of service—the company calls it “
delivering WOW”—has earned Zappos.com a fiercely loyal following. It has also resulted in
blistering growth. Founded in 1999 as an Internet shoe retailer, Zappos.com, now a part
of Amazon, has since expanded into apparel and accessories. Today, it offers millions of
products from over 1,000 clothing and shoe brands, according to the company’s website, with gross merchandise sales exceeding $1 billion annually.
While that kind of growth may be great for the bottom line, it has also placed enormous pressure on the back end of the operation. For example, in order to cope with
surging order volume, the company was forced to expand its Shepherdsville, Ky., fulfillment distribution center just three years after its opening. When it was built in 2003,
the 280,000-square-foot DC, located just 21 miles from UPS’s WorldPort Louisville air
hub, seemed relatively spacious. But by 2006, the facility was bursting at the seams,
leading Zappos to add another 832,000 square feet in an adjacent building, which is where most fulfillment
operations take place today.
Another source of pressure is the need for speed. The retailer promises customers that orders received by 4 p.m.
will be delivered anywhere in the contiguous 48 states the next day—which sets a pretty high bar for fulfillment
performance. “Once a customer has made a purchase, it’s a race to the front door,” says Jerry Koch, director of
corporate marketing and product management for Intelligrated, which provided much of the material handling
equipment used by Zappos.com. “That makes it challenging for operations.”
