Solving Transportation Challenges At 19 Store Arhaus Furniture Raised by Non-Traditional Customers

Furniture World Magazine

For nearly two decades, customers have visited Arhaus Furniture stores to purchase quality, hand-crafted furniture and accessories from around the world. Since furniture is often times a significant purchase, Arhaus customers expect a hassle-free delivery as part of their buying experience. For the traditional customer who lives in proximity of an Arhaus store, that expectation can easily be met. However, with the introduction of "www.arhaus.com" in 2000 and the steady increase in the number of "out-of-town" customers, the delivery process became more complicated as Arhaus opened up a whole new market outside its normal service area. The Challenge With 19 stores throughout Ohio, Pennsylvania, New York, Kentucky, Indiana and St. Louis, Mo. (opening in July 2002), Arhaus easily handles deliveries for customers who live within 100 miles of a store. This is managed from a single distribution center located in Walton Hills, Ohio. These local customers represent about 95% of all orders. The remaining 5% of the retailer's deliveries are made to customers who live outside the 100 mile local delivery radius or who purchase furniture for a home in another part of the world. Servicing this "non-traditional delivery customer" previously caused a disproportionate amount of challenges for Arhaus. At that time, relying on commercial van lines to handle these deliveries, Arhaus was experiencing an exchange rate of nearly 17%. Those exchanges were mostly attributed to damage caused by multiple hand-offs of the freight. The retailer needed an efficient way to safely deliver its unique, high-quality merchandise to the non-traditional customer - and still maintain its high level of quality service. The Solution In September 2000, Arhaus outsourced its "shipout" service to the Orrville, Ohio-based PackShip USA, a provider of packaging, shipping and logistics services for companies that have large, high-value shipments. PackShip USA's services are especially suited for companies that aggressively utilize electronic commerce for business-to-customer (B-to-C) transactions. PackShip USA has provided Arhaus Furniture with a full-service, turn-key logistics program for its non-traditional deliveries. Here's how it works: • Every week, a PackShip USA driver picks up the "shipout" deliveries from the Arhaus distribution center in Walton Hills and, along with the Arhaus inspection personnel, looks over the condition of each piece of merchandise on the dock. • The driver then loads and transports the shipment to the PackShip USA facility in Orrville, where it is inspected again and prepared for delivery to customers worldwide • PackShip USA professionally re-packages each Arhaus piece using foam-in-place (FIP) technology -- a manufactured foam that dispenses in liquid form and solidifies to create a custom mold around the furniture. FIP can enable virtually any piece of merchandise to travel via a common carrier with minimal threat of damage. • If the customer chooses a "curbside" delivery service, PackShip USA arranges delivery via a common carrier. Should the customer choose the "White Glove" option, PackShip USA coordinates with one of its network agents to perform a two-man inside delivery service with in-home setup. PackShip USA will also consolidate shipments whenever possible to save Arhaus transportation costs. • After the merchandise has been picked up from the retailer's distribution center, an Arhaus shipping representative notifies the customer for confirmation and to let them know that their delivery will be handled through PackShip USA. PackShip USA then follows up with the customer to educate them on the delivery process. • The inside delivery agent then calls the customer to arrange a convenient delivery time and completes the transaction. Delivery for each shipment is completed by PackShip USA within 10-15 business days from the day the merchandise leaves the Arhaus distribution center. In addition to shipping services, PackShip USA also provides Arhaus with freight bill payment, tracking/tracing, claims processing, carrier management and problem resolution and arranges transportation for any returned merchandise. Results PackShip USA has successfully acted as a transparent extension of the Arhaus delivery service while upholding the retailer's commitment to quality. With fewer freight hand-offs and an added emphasis on double checking all merchandise for damage before it is delivered to the customer, Arhaus' exchange rates on shipouts has dropped dramatically from nearly 17% to just 3%. As a result, this decrease in returns has significantly reduced freight charges for Arhaus. Additionally, the arrangement with PackShip USA has also allowed Arhaus to reduce its overall transportation costs since the provider uses its buying power to negotiate more favorable rates and avoid add-on costs for home deliveries. "The PackShip USA team understands both ends of the shipping spectrum, from maximizing initial shipping efficiencies to satisfying the customer's delivery needs," said John Roddy, Vice President of Distribution and Logistics for Arhaus. "Their service has been outstanding." Michelle Matuch, Arhaus Shipping Coordinator, adds, "PackShip USA has a very personable staff who also maintains a high level of professional excellence. Due to these exceptional qualities, the Arhaus Customer is provided with an all-around satisfying experience."