Consider the challenge that a small seller of specialty products faces in the world of retailing today. In one corner, there's Amazon.com, the dominant force in online shopping. In the other, Wal-Mart Stores Inc., the brick-and-mortar behemoth. The chances for survival aren't great.
There was no guarantee that Little Unicorn would be able to navigate successfully between those two giants. Launched three and a half years ago in Logan, Utah, the company set out to position itself as a lifestyle brand specializing in baby products. Its line includes diaper bags, swaddle blankets and quilts.
It's a crowded field, ranging from high-end goods to bargain-basement merchandise. The ability of Little Unicorn to carve out a market niche would depend on reaching customers through multiple retail channels.
Little Unicorn thought big from the start. “Our vision from the beginning has always been to be an international company, to fulfill to a lot of different countries,” says director of operations Jordan Brandley. But with just one small warehouse in Logan, about an hour south of Salt Lake City, that seemed like a distant dream.
Early on, the company was making sales to Canada and the U.S., all supported by the warehouse in Logan. But the setup wasn’t scalable, and Little Unicorn quickly saw the need for a more extensive fulfillment network.
In July of 2016, it signed a contract with Ingram Micro Commerce & Fulfillment, a business unit of Ingram Micro Inc. The intention was to speed up the growth of sales via the omnichannel — online and physical stores alike — while retaining Little Unicorn’s unique brand identity.
Ingram Micro Commerce was no stranger to sellers of apparel and baby products, says Phil Guindi, vice president of product. Nevertheless, Little Unicorn had some special requirements, including the need to expand its warehouse network quickly, along with the requisite e-commerce support system.
On the e-commerce side, Little Unicorn was keenly aware of the need to avoid getting swallowed up by Amazon, says Brandley. And it didn’t want to sell through Wal-Mart because of that retailer’s emphasis on driving down prices.
At the same time, the company needed to match the order turnaround time of those sellers, with the ability to ship all orders within a day. That simply wasn’t possible under its previous method of fulfillment, says Brandley.
A Three-Channel Approach
Ingram Micro Commerce stepped up to support three distinct channels on Little Unicorn’s behalf: direct sales to consumers, B2B wholesale and traditional retail. It supplied order-management and inventory-management software that sits atop its warehouse-management system and didn’t require any customized integration. As a result, says Guindi, the company was able to quickly tap into the warehouse network for any type of order.
High on the list of Little Unicorn’s priorities was the need to establish direct channels with as many retailers as possible. In the three months that it took to go fully live on the Ingram Micro Commerce software, Little Unicorn turned on 10 retail channels. And within less than a year, Ingram Micro Commerce had boosted that number to 30, supporting both drop-ship and retail replenishment. They include major retailers such as Target Stores, as well as a handful of smaller merchandisers.
In working with the bigger retailers, Little Unicorn must strike a delicate balance. It needs to find retail partners that align with its brand in terms of both image and pricing. Getting on Target.com, for instance, is a boon for sales. But relying on a high-volume site like Target to execute on orders is another matter entirely.
Brandley says Ingram Micro Commerce’s Shipwire platform allows Little Unicorn to add channels “quickly and painlessly.” Upon request by the company, new channels can usually go live in under a month. Little Unicorn integrated with Target.com in four days.
In addition to its I.T. system, Ingram Micro Commerce provides physical fulfillment services at warehouses that it either owns outright, or operates through partnerships. It has around 140 highly automated facilities around the world, though not all of them are plugged into the Shipwire platform.
Ingram Micro Commerce’s warehouse network allows it to process both direct and retail orders with equal efficiency. Drop-shipped orders appear to be coming from the retailer from whom the buyer ordered. Ingram Micro Commerce also replenishes large wholesale orders on Little Unicorn’s behalf, booking truckload or less-than-truckload movements and adhering to retailers’ strict compliance rules. And it handles customer returns as well.
Each retailer has its own unique set of requirements. Some need orders to allow for online purchase and pickup in store. Nordstrom, for one, requires that return instructions be included in the box.
“We’ve built all of the technology pieces that are needed to instruct the warehouse,” says Guindi. “So when we get an order to execute, nobody has to do any thinking.”
A Shifting Balance
All channels are of equal importance to Little Unicorn. Currently online sales account for 40 percent of all packages, with the remaining 60 percent generated by traditional retail. In dollar terms, that switches to 60-40 favoring online.
Brandley expects e-commerce to account for an increasingly high portion of total sales in the years to come. “We’re expanding into our retail channel quite a bit right now,” he says, “but after we saturate them, I think e-commerce is going to grow.”
He already sees the need for additional fulfillment points to handle growing sales volumes. As of early fall, Little Unicorn and Ingram Micro Commerce were exploring the possibility of opening a warehouse in Jonestown, Pa., to reach buyers in the eastern half of the U.S. The western region is being fulfilled out of a facility in Miraloma, Calif.
Both warehouses are owned directly by Ingram Micro Commerce, although additional sites operated through partnerships could also step in to help. In the U.S. alone, the provider has seven fulfillment nodes integrated into the Shipwire platform. Any of them could be stocked with inventory, should Little Uniform decide that it had enough velocity in a given region to justify a third node.
The use of Ingram Micro Commerce’s services has helped Little Unicorn to exceed revenue targets by 60 percent, according to Brandley. It has also resulted in lower shipping costs, faster shipping speeds, and a higher level of customer satisfaction. The seller’s returning-customer rate on its website has risen by 40 percent since it began relying on the Ingram Micro Commerce network.
Guindi says the size and variety of the fulfillment network makes Little Unicorn “future-proof.” The platform allows for easy expansion of facilities, regions and sales channels without the need to rewire upstream systems.
Brandley says Little Unicorn continues to strive to improve the customer experience on its own website. The idea is to grow sales while maintaining the company’s image as a high-end brand — hence the reluctance to sell in discount-oriented environments such as Wal-Mart.
Domestic sales can only rise so much, however, so the company is also looking to grow internationally. It is considering warehouses in China, Amsterdam and South America, says Brandley — all areas in which it could rely on Ingram Micro Commerce for I.T. and fulfillment resources.
Ingram Micro Commerce, for its part, is working to connect more of its sites to the Shipwire platform. And it’s leaving open the door to acting as an “asset-light” logistics provider, supplying the necessary technology while relying on partners to perform physical fulfillment tasks.
Brandley says Ingram Micro Commerce has proved to be highly flexible in its approach to serving the evolving needs of Little Unicorn. “There are always surprises,” he adds, “but in the end, they took care of us the right way, and we’re very happy to have them as a partner.”
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