Gilt Groupe, Rue La La, Fulfillment Operations [video]

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Many have asked how to Private Sale sites like Rue La La, Gilt Groupe, Hautelook, Lockerz, Ideeli, and others handle Distribution and Fulfillment. In general, most of the flash sale sites have contracted with third party logistic partners (3PL), but some handle their own fulfillment. Unlike Amazon Fulfillment Centers, Gilt doesn’t own theirs, but outsources fulfillment to a different company.

For example, Rue La La, which is now owned by GSI Commerce, can take advantage of GSI Commerce’s 7+ US based Fulfillment centers. Others, like Ideeli, have a small Fulfillment center in New York. But, most Private Sale sites have contracted with a 3PL partner that can cater to the needs of Order Fulfillment for Online Retail Fulfillment.

This is true, in general, because private sale sites or flash sale sites’ core competency is not fulfillment and distribution – it’s in marketing, sales, and in providing the perception of scarcity in high-end products for a low cost to the customer. Third Party Logistic partners are focused on Fulfillment, have their own mature Warehouse Management System (WMS), So, because of this, it makes sense for most private sale sites to contract with a logistics partner.

In the case of Gilt Groupe, they announced their partnership in a press release below. Gilt Groupe outgrew their Brooklyn Warehouse and now uses Quiet Logistics, which uses Kiva Robots.

BOSTON June 16, 2009 Internet Retailer 2009 Conference & Exhibition (Booth #1317) Quiet Logistics, the first multi-tenant robotic order fulfillment service provider, today announced that Gilt Groupe has chosen Quiet Logistics as their next-generation order fulfillment partner.

Gilt’s growth trajectory has put demands on all aspects of our business, said Susan Lyne, CEO of Gilt Groupe. We have chosen Quiet Logistics to be our fulfillment partner because their solution offers the flexible scalability and supporting information technology systems that we need to manage our growth. Their capabilities across-the-board are impressive.

Gilt Groupe provides access, by invitation only, to men’s, women’s and children’s coveted fashion and luxury brands at prices up to 70 percent off retail. Each sale lasts 36 hours and features hand-selected styles from a single designer.

We are gratified that Gilt Groupe has chosen Quiet Logistics to help them manage their meteoric growth. By integrating robotics, an enterprise-class Warehouse Management System, and web-based data visibility and reporting tools, we deliver a high throughput fulfillment operation that is unique in the industry, said Bruce Welty, CEO of Quiet Logistics. This operation drives the highest service levels available today and positions Gilt to strengthen its standing as one of the fastest growing Internet retailers.

Quiet Logistics delivers its on-demand order fulfillment services in a specially designed multi-tenant QuietCenterâ„¢ facility. A QuietCenter can store and ship a wide range of consumer products including apparel, healthcare, beauty, office supplies and similar consumer packaged goods. By significantly reducing touches and human involvement in the handling of goods, Quiet Logistics is able to reduce cycle times and opportunities for error while delivering a 2 to 3 times improvement in throughput.

But prior to contracting with a 3PL partner, Gilt Groupe handled their own fulfillment, until demand exceeded their capacity to fulfill. But, below are a few pictures from their fulfillment center prior to contracting with a 3PL partner:

Receiving Dock – Shelves of Shoes:

Sortation Process at Receiving:

Quality Control and Kitting:

Quality Control:

Picking Process, Fulfillment, Gilt Groupe:

Packing Process, Gilt Groupe:

(Pick, Pack, Ship) Shipping Process, Gilt Groupe:

Shipping, Gilt Groupe:

And, below are a few videos made with a high definition video camera showing the Kiva Robots used by Gilt Groupe’s logistics partner and interviews with executives at the Gilt Groupe: