The Canadian Tire Experiment: An E-commerce Case Study

May 27, 2021 | Blog, Case Study

Introduction

Canadian Tire Corporation Limited has been operating an efficient retail logistics and supply chain since its founding in 1922, making it one of Canada’s most trusted and iconic Canadian retail brands. Canadian Tire manages a network of 1,700 retail locations across a large family of brands such as Canadian Tire, Mark’s, FGL Sports, PartSource, and the Canadian operations of Party City, ranging in the automotive, sports, hardware, leisure and home goods industries. 

“We set a service level of 99% shipped next-day, and I’m happy to say not only did we hit that, we constantly hit that. And on the cost side, I would say the rate shopping component has actually saved us about 25% on the freight expense…” — Carmine Bosco, AVP Supply Chain at Canadian Tire.

Canadian Tire had been operating under a traditional ecommerce fulfillment model for nearly a century. With their executive team offering full support, this organization’s supply chain team decided to challenge their old way of doing things in order to find a better balance between service and cost. a better service with 

The Experiment

Customers across the world are demanding better service. The true challenge, as noted by  Canadian Tire AVP of Supply, Carmine Bosco, is to find the perfect balance between offering a good service while maintaining costs. One way companies have found this balance is through optimizations in the logistics and supply chain. With the full support of their executive team, Canadian Tire decided to launch an experiment. 

The Hypothesis: Applying an agile approach to ecommerce fulfillment, the team would be able to stand up a new solution quickly with incremental and tangible benefits, without any impact to costs or service quality.

Setting up the Experiment: Canadian Tire decided that there were four crucial factors that would dictate the success of the experiment. These four success factors were:

1. Executive Sponsorship – Fortunately, the Canadian Tire executive team was ready and willing to challenge the status quo for their logistics and supply chain organization
2. Controlled Environment – Canadian Tire already had warehouses. All they had to do was clear out space in these warehouses , then designate them specifically for ecommerce fulfillment.
3. A Test Subject (aka guinea pig) – One of the brands under the Canadian Tire family banner, Pro Hockey Life, had been operating a traditional ecommerce fulfillment model for a few years. Due to its success and growth, the Pro Hockey Life team was struggling to keep up with demands. Consequently, their service was suffering and their costs were getting higher. Carmine mentioned that during influxes of shopping like Black Friday and Cyber Monday holiday shopping, it would take several weeks to fill orders. Due to this, the Pro Hockey Life team happily volunteered to participate in the pilot. 
4. “Slick” Technology – In order to influence the larger organization on how to build out ecommerce fulfillment operations, the logistics and supply chain team needed to implement a brand new technology not in a couple years or even months, rather in a couple weeks. This technology needed to be flexible, innovative, scalable, AND agile – or as Carmine put it, “slick.”

So Canadian Tire already had the executive sponsorship, the controlled environment, the guinea pig; and after scouring the web, they finally settled on the slickest technology on the market: ShipHero.

Why ShipHero

Canadian Tire had several key considerations for this experiment in order to declare it a success, and ShipHero checked all the boxes. These considerations were:

1. Quick Connection to the Website and to Couriers – With ShipHero’s easily integrated platform and dedicated team of experts, connection to Canadian Tire’s website was a matter of hours, not months or weeks. Also Canadian Tire uses various courier companies for printing labels, and again, ShipHero was able to integrate with these couriers within a few hours.
2. Easy Training and Implementation – ShipHero doesn’t require any special tools or gadgets to work. An iPad and bluetooth scanners; those are the only two devices that ShipHero employs and are two devices that everyone is comfortable with and uses regularly. So, Carmine and the Canadian Tire employees found the training to be fast and easy, meaning the system could launch even quicker.
3. Immediate Cost Savings – With ShipHero’s rate shopping capabilities, each and every shipment is rate shopped across your courier connections and the cheapest option is automatically selected. Due to its highly configurable order management rules, there’s no need to get IT folks involved to make these changes.

In addition to the above, the ShipHero website offers a plethora of useful information to maximize your ecommerce fulfillment experience, complete with explanatory how-to videos along with in-depth descriptions of the ShipHero processes. For all the above reasons, Canadian Tire chose ShipHero to launch their ecommerce fulfillment experiment. So, the teams got to work, rapidly standing up a warehouse and setting up ecommerce fulfillment operations, from racking to packing stations, networking / systems setup and team training.

The Launch

In just 4 months, the service launched and began shipping ecommerce orders for the first brand to come online, Pro Hockey Life. This was accomplished by working closely with the logistics and supply chain team, and by ShipHero’s agile, flexible, and scalable roll-out strategy that consisted of:

1. Defining an MVP – Using a phased rollout approach, a Minimum Viable Product (also known as MVP) was quickly developed for the warehouse launch.
2. Speed with SaaS – Without the constraints of a complicated software solution, ShipHero was configured within days.
3. Team Collaboration – Canadian Tire and ShipHero teams worked in unison to gather and satisfy the MVP requirements needed for launch.
4. Training & Launch – Through onsite workshops and meetings, ShipHero personnel conducted train-the-trainers sessions, as well as role-based training for the larger Canadian Tire team.

Now with the experiment underway, Canadian Tire just had to sit back and watch the results. 

The Advantages of Scale

The ShipHero service also successfully started shipping ecommerce orders and because of the team’s due diligence with setting up the shipping rate shopping features of ShipHero, the Canadian Tire team saw an immediate ROI realized through the rate shopping tool. 

So with the initial experiment a success, Canadian Tire wanted to go beyond the experiment. Another part of the Canadian Tire family with no ecommerce presence, Family National Sports, was able to simply move their inventory to the specified warehouse. Due to the SAAS model and flexible cloud capabilities, in a matter of weeks, National Sports launched their logistics and supply chain operations. Capacity for scale was proven, and Canadian Tire added more a few more of their retail banners. 

With the successful launch of the D2C fulfillment warehouse now serving multiple brands, the next step in the experiment was unlocking retail in-store inventory, increasing available to sell inventory as well as new product offerings.

Unlocking Retail

Through ShipHero’s highly configurable order management rules, Canadian Tire was able to use their existing brick-and-mortar locations to fulfill ecommerce orders, instead of building new facilities. Through leveraging curbside pickup, buy online pickup in-store (BOPIS) capabilities, and other omni-channel logistics, Canadian Tire made smart fulfillment decisions, whether the order would come through the store or the DC.

“So what we did is we started thinking about: how could we unlock retail inventory? I mean, it’s sitting there. Why not? Could we put it on the web while we have the warehouse doing fulfillment. So we found with ShipHero it had order management rules that were robust enough to make decisions on where we should fulfill orders; whether it would be the store or the DC. And this is actually quite a powerful feature because it allows our supply chain to use as a lever, if one or the other: store or DC, and we’ve had several stores actually up and running get over capacity, so we could turn the lever and change and switch the nodes on where to fulfill orders.” — Carmine Bosco, AVP of Supply Chain

Canadian Tire held all the levers to success in terms of logistics and supply chain, with a consistent goal of 99% of orders shipped next-day and a 25% reduction in freight expense. Life was good. And then, a pandemic hit.

Handling a Crisis

Canadian Tire was able to leverage their newfound capabilities from ShipHero to accommodate the ‘new normal’ of post-COVID retail shopping. In-store D2C fulfillment such as curbside pickup and contactless checkout has proven to be an extremely viable solution to the challenges presented by the COVID crisis.

Retail stores are not open for retail, but those that were able to adapt quickly are meeting the increased fulfillment demand of customers who are now buying at home. Our mission at ShipHero is to use agile problem-solving to make the most out of a challenging situation and keep our hard-working clients in business, no matter what.

How American Tall Scaled Their Fulfillment Operations by 400% with ShipHero

May 24, 2021 | Blog, Case Study

Introduction

Finding high-quality, well-tailored men’s clothing online can be a tall order—especially for men who are 6’3” or taller. So demand was really high when American Tall, a men’s apparel brand for tall men, launched their direct-to-consumer ecommerce site. American Tall is a direct-to-consumer lifestyle brand for tall (and extra tall) men. They create quality, tailored clothing and accessories for men between 6’3”–7’1” with a Medium to XXL tall build.

When the company first began operations, the not-so-small family business relished picking and packing each order by hand. They even enclosed personalized ‘thank you’ cards with each order to make the unboxing experience feel as personal as possible. But as their business grew, keeping up with order fulfillment became a challenge. 

Manually keeping tabs on inventory levels, order information, and shipping information all on an Excel spreadsheet became impossible tasks to manage. 

Challenges

Scaling fulfillment with rapid business growth 

• American Tall needed a warehouse management solution
• Free software solutions weren’t scalable with rapid growth
• Too many SKUs made outsourcing shipping to a 3PL unfeasible

“It got to the point where we were spending hours writing thank-you cards each night. It also became more and more challenging to pick the orders,” explains Jake Rajsky, Vice President at American Tall. 
“We’d have items in stock and people were buying them, but there were none on the shelves for our pickers. Our warehouse manager was spending her entire day pulling down skid after skid to replenish the shelves and we couldn’t get ahead of it.”

To ease the workload, they decided to adopt free batch picking software. But they soon realized that the solution wasn’t scalable with the volume of orders they were receiving.

“The software wasn’t scalable with our business’s growth. It only allowed us to queue up a hundred orders at a time. And there was no way we could do it by hand anymore,” Jake says.
They considered outsourcing shipping to a 3PL, but realized that wasn’t feasible either.

“We couldn’t outsource shipping to a 3PL. We have way too many SKUs— 3x or 4x what most retailers have. It would have been impossible for us to pay the crazy-high rates,” Jake says.
With order fulfillment falling further and further behind, American Tall needed a solution that was scalable and affordable. That’s what led them to ShipHero.

Solution

ShipHero for fulfillment & shipping 

American Tall demoed a number of different warehouse management software solutions, but ShipHero stood out when Jake began using ShipHero to implement more efficient pick and pack workflows. 
“Out of all the different solutions we tried and tested, ShipHero was the most intuitive,” Jake says. “Picking and packing works well with ShipHero. It’s way more efficient than we were used to, and it forced us to start thinking bigger,” he explains.

American Tall used to only have barcodes on cartons, not individual hang tags. Having ShipHero pushed them to request barcodes on individual items, create a detailed map of their warehouse, and add barcodes to each bay location. With these changes, American Tall started using ShipHero’s Multi-Item Batch, which made it easy to pick multiple orders with different quantities of products into unique tote bags. 

“Multi-Item Batch picking and packing was huge. Now, each picker could walk through the warehouse once and get what they needed. I can’t imagine doing it one at a time,” Jake says. “Sending out the wrong item is a waste of money and it damages your brand identity. Now, if a picker pulls the wrong item, scanning the barcode gives them an error message. With Multi-Item Batch, everything’s more accurate.”

It was Shopify-approved with numerous positive reviews. It offered plenty of different features that would help American Tall streamline warehouse management. Its user interface was clean, simple, and intuitive.

“Before, we might have had 1,000 units of size ‘medium’ somewhere in the warehouse, but we had no way of knowing how many were available to pickers. Maybe only 20 of those were on the shelf and the other 980 were packed away on skids in overstock,” Jake explains.

“As of two months ago, we can finally track everything. With Dynamic Slotting, we can see our pick-face—anything up to six feet—and the three rows of racking above are for overstock. It’s very easy to see what’s stored on each skid, pull it down, and transfer it from that location to an active one so our pickers can access it,” he adds.

“Picking and packing works well with ShipHero. It’s way more efficient than we were used to, and it forced us to start thinking bigger.”

Results

Software that scaled with 4x growth

• Streamlined inventory management for efficient pick & pack workflows
• Multi-Item Batch to simplify picking multiple orders with different item quantities
• Dynamic slotting to track how much inventory is in stock in each location
• Warehouse management software scalable with 400% business growth
• 275% increase in picking efficiency
• Mis-shipments reduced by half

In less than two years, American Tall’s orders increased by over 400%. They now receive thousands of orders every month and they’re even busier during holiday seasons. ShipHero helped them keep up with order fulfillment while their business grew—and it continues scaling with them. Even better, Jake says that ShipHero has helped them improve picking efficiency by over 275% and reduce picking errors and misshipments in the process.

“We realized there was no way we’d be able to continue filling orders one year down the road at the rate we were growing. We were excited by the growth, but we needed a software solution like ShipHero,” he says.

Having a barcode on each product results in fewer mispicks, improved order accuracy, and more satisfied customers. More recently, American Tall has also been using ShipHero to improve inventory management. ShipHero’s support team helped them implement Dynamic Slotting to track how many units of stock they have in each location in their warehouse.

“Speaking of efficiency, there’s no contest. Manually, two people used to pick around 80 orders per day. With ShipHero, two people can pick over 300. We also reduced misshipments by half, if not more,” Jake says.

More efficient warehouse management has helped them deliver a better experience to their end users. Next, American Tall is planning to expand its use of ShipHero to receive Purchase Orders. This extra functionality will allow them to navigate Purchase Orders on their devices, print barcodes, create flexible location flows, and more.

“Our inventory system used to be Shopify. There was no editing orders or customization. Now, our customer service agents can edit orders, add items, and provide our customers with an overall better ecommerce experience,” he says.

“If you’re planning to scale up your business, you need a solution like this. ShipHero’s customer service is great and they’ve helped make us incredibly efficient,” Jake says.
Your fulfillment solution should scale with your growing business. Let’s talk.