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CASE STUDY

HalloweenCostumes.com efficiently handles a 15x spike in order volume during peak season with MCF

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Highlights
  • Costume retailer HalloweenCostumes.com sells 50,000 SKUs across 5 channels.
  • The company needed a 3PL to support order fulfillment during its three-month peak season, which accounts for 80% of its annual sales.
  • With MCF, the online costume retailer is able to handle a 15x increase in orders during its peak shopping season.

THE CHALLENGE
Explosive growth and limited capacity

On October 31st every year, Halloween is celebrated around the world. For the US, it’s a fun-filled holiday dedicated to carving pumpkins, eating sweet treats, and dressing up in costumes. With families purchasing outfits, decorations, and candy for the occasion, it’s no surprise that the impact of this spooky holiday on the retail industry is immense. In 2022, Halloween spending reached an all-time high of nearly 11 billion U.S. dollars. It’s an especially important time of year for one ecommerce retailer, HalloweenCostumes.com.

HalloweenCostumes.com originally started out of a garage in rural Minnesota by the Fallenstein family, who began renting homemade costumes to neighbors. In 2001, Tom Fallenstein, co-founder and CEO of HalloweenCostumes.com, launched a website to start selling these costumes online.

What started as a family-run costume rental company in the US quickly boomed into global direct-to-consumer (D2C) ecommerce business, with HalloweenCostumes.com selling to customers in 100 countries. Now, the company is one of the largest online costume retailers, managing orders across its brand websites (both HalloweenCostumes.com and its newest web domain Halloween.com), four ecommerce marketplaces (including Amazon.com), and a small wholesale business. Its most popular products range from its Back to the Future or Spider-Man costumes to its many licensed Disney character options.

HalloweenCostumes.com has over 50,000 SKUs, encompassing a wide variety of unique costume options and sizes, so that adults and children can create great Halloween memories. But – as a seasonal business with around 80% of its sales coming during the three months leading up to Halloween – handling the spike in orders during this peak period is no easy task.

Matthew Burkett headshot
When preparing for our peak season, we focus on two key factors – hiring enough employees and having the right amount of available inventory,” explained Matthew Burkett, Chief Financial Officer of Halloweencostumes.com. “But we have been growing so fast that our operations reached its limit to handle the influx of peak season orders. We knew we needed a 3PL to not only help diversify our supply chain, but also to supply additional operational capacity and personnel to guarantee our fulfillment runs smoothly during peak.
Matthew Burkett Chief Financial Officer, HalloweenCostumes.com

It takes in-depth planning for HalloweenCostumes.com to ensure its Halloween season goes off without a hitch. Firstly, there is a 9-month lead time from product conceptualization to sale. The company’s product design team develops costume ideas in the US and then works with multiple international factories to manufacture the products. Next, the products are shipped by ocean freight to the US, where the inventory is prepped so that it’s ready to be sold. The company also purchases costumes from licensed vendors and resells those products, in order to offer an even greater selection to customers.

The HalloweenCostumes.com team started off managing inventory storage and order fulfillment in-house but their existing infrastructure was strained from the increased order volume that came with continued growth year after year. In 2020, the added supply chain complexity and constraints from the global pandemic caused the team to begin their search for a third-party logistics (3PL) provider to support their fulfillment operations.

HalloweenCostumes.com required a 3PL that could support its seasonal needs with:

  • Flexible capacity: The online business was seeking a 3PL that had the storage and fulfillment capabilities to support its fluctuating order volume during both the off season and peak season.
  • Operations personnel: Even after a nearly 17x increase in their workforce, from 150 to 2,500 people, the HalloweenCostumes.com team recognized that they needed to outsource some of their fulfillment to a provider with the additional capacity they needed to handle their peak season orders.
  • Geographic footprint: HalloweenCostumes.com has a 200,000 square foot fulfillment center in Minnesota, and is preparing to ship orders out of its newest 285,000 square foot facility in Kentucky. The company was looking for a 3PL with an extensive network of facilities that could expand its reach and position it products closer to its customers.

“When preparing for our peak season, we focus on two key factors – hiring enough employees and having the right amount of available inventory,” explained Matthew Burkett, Chief Financial Officer of Halloweencostumes.com. “But we have been growing so fast that our operations reached its limit to handle the influx of peak season orders. We knew we needed a 3PL to not only help diversify our supply chain, but also to supply additional operational capacity and personnel to guarantee our fulfillment runs smoothly during peak.”

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THE SOLUTION
A 3PL with a flexible, global fulfillment network

HalloweenCostumes.com initially tested two 3PL options, one of which was Amazon Multi-Channel Fulfillment (MCF), to help power the fulfillment of orders from the brand’s website. When the company’s other 3PL was unable to effectively handle orders during seasonal spikes, the HalloweenCostumes.com team decided to move forward with MCF as its only 3PL provider. MCF is able to offer HalloweenCostumes.com:

  • The world’s fastest fulfillment services: MCF leverages Amazon’s fulfillment services, with an average “click-to-door speed” of 1.9 days – over 50% faster than other retailers. (NielsenIQ)
  • Access to Amazon’s global fulfillment network: MCF enables ecommerce businesses to utilize Amazon’s connected global network – which has over 2,000 facilities (including more than 200 fulfillment centers), 120,000 trucks, vans, and planes, and 1,275,000 associates and partners – to deliver orders seven days a week.
  • Operational flexibility: Merchants rely on MCF to provide the additional storage and fulfillment capacity needed to handle fluctuations in supply and demand caused by seasonal spikes.
  • Reduced supply chain risk: By working with MCF, sellers like HalloweenCostumes.com are prepared to deal with supply chain volatility and disruptions – so they can always provide a seamless, best-in-class fulfillment experience for their customers.
  • Integrated fulfillment operations: To manage high order volume efficiently, automation is critical. MCF has both prebuilt and custom integration options to choose from to automate the order fulfillment process.

“Trusting a 3PL to manage our order fulfillment during our busiest season is a big deal,” said Burkett, “When the peak period makes up 80% of our annual sales, we need to ensure we have the right provider in place to meet our needs and perform, and MCF is a perfect fit.”

HalloweenCostumes.com uses a custom-built API integration with MCF in order to automate order fulfillment. Once an order is placed on the company’s website, it is automatically routed to MCF for fulfillment. Then, MCF picks, packs, and ships the product straight to the customer’s doorstep.

Burkett said, “Because our sales are so seasonal, we want full control over our back-end systems and a 3PL provider that could connect to our custom tech stack. MCF seamlessly integrated with our systems and now our order fulfillment process is automated, saving us effort and simplifying our operations.”

Image of family dressed as Snow White and seven dwarfs costumes

THE RESULTS
Doubled revenue from operational efficiencies during peak season

Since 2020, HalloweenCostumes.com has been using MCF to help with its fulfillment in order to maximize their busiest time of year. The company is thriving as a seasonal business and seeing a multitude of benefits, including:

  • Enhanced customer experience: HalloweenCostumes.com needs to deliver costumes to its customers fast, and now with MCF, the company can delight customers with an average click-to-delivery speed of 4.1 business days and a 97.3% delivery accuracy rate.
  • Improved bottom-line: By using MCF, the company no longer has capacity constraints that caused it to turn down sales and miss out on potential revenue.
  • Operational efficiencies during peak: MCF helps HalloweenCostumes.com prepare and plan for each Halloween. The business sends its inventory to Amazon three months ahead of the holiday, ensuring that products are in stock and available for purchase at the start of the peak season. With MCF, they can efficiently handle a 15x increase in orders during peak (from 6,000 orders per day in the off season to up to 100,000 orders per day during peak).
  • Automatic order fulfillment: MCF integrated with HalloweenCostumes.com’s back-end systems so that orders from the brand’s website are automatically sent to MCF for fulfillment and then rapidly and reliably delivered to customers’ doorsteps.

In the future, HalloweenCostumes.com plans to keep expanding into new countries and increasing the volume and variety of products it sells – and MCF will be there every step of the way, continuing to support the online costume retailer’s order fulfillment throughout the year and especially during peak season.

“I would recommend MCF for companies looking for help during peak season. MCF does a great job of offering us the flexibility we need depending on our seasonal volume so that we have a successful holiday, every time.”


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