As Caraway Home grew following its 2019 launch, it “avoided one of the biggest challenges many young brands encounter during expansion: the growing pains of going omnichannel,” according to a case study from the home goods company and ITS Logistics.
Some challenges companies may face when expanding to cover wholesale distribution and e-commerce orders are finding a new provider, migrating inventory and onboarding new partners, per the case study. But Caraway and ITS worked closely together to ensure the company's supply chain could handle the jump in demand.
“As soon as they saw the opportunity to grow, ITS built out their omnichannel distribution operations, scaling volumes 280% in a single year,” per the case study shared with Supply Chain Dive.
Caraway uses ITS to handle parcel management, reverse logistics and inventory management. The home goods brand has been able to achieve a 20% reduction in total parcel costs with ITS by collaborating on a live rate-shopping tool for parcel shipments, according to the case study. The tool optimizes each shipment within the logistics company’s network of regional and national parcel carriers.
“Where shipping prices had previously been governed by static, weight-based rules, every order is now shopped around ITS’s network of regional and national parcel carriers for the best real-time rates,” per the case study.
ITS has also created a custom reverse logistics workflow for Caraway that helps sustainability efforts by limiting instances of "perfectly functional products ending up in landfills," the case study said.
The program helps bring more returned products back to the market, as products with only cosmetic damage are listed on a secondary marketplace. Any items that can’t be resold are donated to Habitat for Humanity and shipped out of ITS’ distribution centers.
Retail partners who sell Caraway products through their own online storefronts have the buy online, return in-store option, per the case study. Caraway's retail network includes Walmart, Target, Crate & Barrel, Costco, Macy’s and Dillard’s.
In terms of inventory management, ITS has built a vendor-specific inventory segregation tool through a tier-1 warehouse management system. This allows for visibility over inventory reserved for specific channels and how shared SKUs are to be relocated when stock for a specific channel runs low.
“Walmart is a perfect example—some of their SKUs are exclusive, some they share with ecomm and other retailers. We’ve built rules that give us the flexibility to move inventory between channels, while preserving dedicated SKUs.”
Rob Bray
Senior Director of Client Success at ITS Logistics
Managing shared inventory across channels can be a challenge, as it’s the same product but it has to live in multiple places simultaneously, Rob Bray, senior director of client success at ITS, said in the case study.
“Walmart is a perfect example—some of their SKUs are exclusive, some they share with ecomm and other retailers," Bray said. "We’ve built rules that give us the flexibility to move inventory between channels, while preserving dedicated SKUs. That visibility only exists because we’re managing direct-to-consumer and wholesale fulfillment in one place."
Next up, Caraway’s partnership with ITS is set to expand further with the home goods company set to become the first tenant in the 3PL's York, Pennsylvania, distribution center. The 708,000-square-foot facility will begin receiving inbound shipments in Q3, with outbound fulfillment to follow, per an ITS Logistics spokesperson.
“ITS and Caraway have grown together in a way where it made sense for us to be at the table together talking about this move. Searching for a win-win scenario exists in the DNA of our relationship," Rob Snowden, senior director of supply chain at Caraway, said in a press release.
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