Vera Bradley’s Multi-Channel Success

For years, retailers and their suppliers outsourced distribution activities to third-party logistics (3PL) providers. The argument was that their core competency was in designing, sourcing, merchandising and selling, and not in picking, packing and shipping.

In today’s retail market, where sales can originate from multiple channels, that model is being turned on its head. Brick-and-mortar retailers are selling online, Web retailers are opening retail stores and wholesale distributors are competing in both channels. The best retailers recognize that distribution has to be a core competency. They are bringing distribution back in house, often serving multiple channels under one roof.

Those were among the reasons Vera Bradley, a designer and manufacturer of colorful quilted women’s handbags and accessories, expanded to a 400,000-square-foot, multi-channel distribution space near its corporate headquarters in Fort Wayne, Ind., last fall. The new facility added 200,000 square feet and associated capacity in support of multi-channel growth. It was designed from the outset to serve a number of sales channels under one roof and from one reserve inventory, including:

• wholesale distribution to specialty retailers that are Vera Bradley’s traditional customers;
• wholesale distribution and value-added services for a growing list of large, national retailers, which they refer to as Key Accounts;
• store replenishment to Vera Bradley’s own growing chain of retail and outlet stores; and
• a rapidly expanding direct-to-consumer Web fulfillment business.