Port Logistics Group develops a U.S. supply chain solution for YOOX

The Challenge

YOOX is a global eCommerce partner for leading fashion brands, with an operational presence in 25 European countries, the United States and Canada, Japan and 27 countries around the world. Representing some of the most recognized names in fashion, YOOX’s website receives more than five million visits per month.

YOOX’s original model for distributing product to its end customer in the U.S. from Italy created high shipping costs that decreased margins and prohibited returns. These costs made it impossible to ship returns back to Italy, and resulted in YOOX having to sell this merchandise to discounters for unfavorable terms.

Since returns are an essential part of its business, YOOX was forced to sell the merchandise for a fraction of its value and a more cost-effective solution was needed.

The Solution

Port Logistics Group immediately implemented a solution for YOOX’s customers to return merchandise. Since 90% of the returns were resalable in the U.S., PLG was able to re-stock quality merchandise and put it back on the web for future sales.

Next, working together, PLG and YOOX implemented a “Just-in-Time” (JIT) inventory solution that allowed for returns in the U.S. to be paired with items coming from Italy while adding unique branding and promotional touches. With the JIT solution, YOOX also was able to bulk ship orders to PLG’s warehouse and have the items sorted, re-packaged and shipped from the U.S., saving a tremendous amount of money. Furthermore, the retailer was able to pass these efficiencies onto its customers, increasing customer satisfaction through more competitive pricing and better service.

PLG integrated its Warehouse Management System (WMS) with YOOX’s technology to improve inventory utilization and quality control, allowing for timelier, more accurate order fulfillment. Systematically PLG was able to communicate directly with YOOX’s technology, creating a seamless flow of real-time data.

The Results

First, with the implementation of PLG’s solution, returns registered in the U.S. YOOX product catalog within two weeks, allowing the retailer to re-sell the products while refunding the original customers in a shorter time frame. In addition, YOOX achieved a substantial reduction of total logistics costs (warehousing and delivery) by implementing the JIT solution.

Second, YOOX’s U.S. business grew by more than 10 times its original size in just three years with the implementation of this supply chain solution.

Third, YOOX was able to create a direct relationship with U.S. designers and U.S. branches of European designers to better localize its product selection and improve margins.

Lastly, YOOX was able to package the solution by combining its online retail and catalog business expertise with PLG’s back-end warehouse solution to create a model that it has sold to various European brands.

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