The global smart home industry is expanding at a rapid clip, and is expected to grow at a compound annual growth rate (CAGR) of 21.1% from 2022 to 2028 to reach US$380.5 billion.
There is thus an immense opportunity for smart home device retailers to capitalize on this growth – if they can handle the complexity in this fiercely competitive, high-volume, low-margin industry and operate with the utmost efficiency.
One smart home retailer that is always striving to improve its operational efficiency is Wyze, a US-based enterprise that was founded in 2017 with the mission of producing state-of-the-art smart home technologies at an affordable price – making them accessible to a wide range of consumers.
Wyze’s flagship product – the Wyze Cam, which was launched in 2017 and retailed for only US$20 – sold over one million units in its first year on the market, and has sold more than 15 million units since then. The company also manufactures and retails an array of other devices for all areas of the smart home ecosystem, including smart locks, doorbells, robot vacuums, light bulbs, switches, and thermostats.
“In order to provide the highest quality products and the lowest possible price for our customers around the world, we must be able to continually optimize our operations,” said Rob Johnson, Principal Ecommerce Technical Program Leader at Wyze, “And, when the company first started, one area where we saw that we could boost our efficiency was our ecommerce order fulfillment process.”
To effectively manage its ecommerce fulfillment operations, Wyze must be able to:
- Automate and streamline the routing of orders from multiple online sales channels including the company’s direct-to-consumer (DTC) website, Amazon.com, and other ecommerce marketplaces.
- Ensure the order fulfillment process – from online checkout to the customer’s doorstep – runs smoothly and orders are delivered on time, every time.
- Minimize manual effort as well as overhead costs for full-time employees and other resources required for ecommerce fulfillment operations.
To help achieve these objectives, Wyze began outsourcing its order fulfillment to several different third-party logistics (3PL) providers.
However, as Wyze’s business expanded over the years, the scale and complexity of its fulfillment operations grew. And so the smart home retailer started looking for new 3PL partners to handle the company’s increased order volume and new technologies to integrate and automate its order fulfillment process.
In 2021, Wyze commenced its search for a new 3PL provider to help handle its rapidly expanding multi-channel ecommerce fulfillment operations.
After a rigorous selection process, Wyze – which had been selling on Amazon.com for many years – decided to partner with Amazon Multi-Channel Fulfillment (MCF) solution. MCF provides fast and reliable order fulfillment through off-Amazon sales channels including DTC websites, ecommerce marketplaces, and social media stores.
“When selecting a 3PL, the key considerations for us are speed, price, and efficiency. We are always looking for providers who can help us deliver our smart home products to customers faster, reduce our operating costs, and optimize the efficiency of our ecommerce fulfillment process across the different channels we sell through. By partnering with Amazon Multi-Channel Fulfillment, we can leverage Amazon’s world-class fulfillment network and expertise to accomplish these goals,” said Eric Morris, Principal Technical Program Manager.
After Wyze started using MCF in the middle of 2021, they immediately saw improvements in terms of the speed and reliability of their deliveries to customers, and a reduction in the cost and complexity of fulfillment.
With MCF and Pipe17, we’ve been able to automate our order fulfillment process, cut our delivery times in half, and leverage Amazon’s fulfillment network to provide a Prime-like experience for customers – while, at the same time, reducing overhead in terms of full-time employees needed to manage our order fulfillment operations.
Although Wyze’s Ecommerce Operations Team was pleased with this progress, they saw an opportunity for even greater improvement if they automated their order fulfillment process – which still required a lot of time and manual effort for them to run.
To achieve this order fulfillment process automation would require a solution that could integrate the back-end systems that connected Shopify – the ecommerce solution that powers Wyze’s DTC website – with MCF and other 3PLs.
After evaluating numerous order management systems, Wyze selected Pipe17, an order management system that:
- Provides complete seamless integration of MCF and other 3PLs with a wide range of ecommerce platforms and enterprise resource planning (ERP) systems,
- Automates and streamlines the routing of orders across 3PLs based on available inventory, location, SKUs, and ecommerce website tags,
- Keeps inventory levels in synch across all channels,
- Offers visibility over the end-to-end order fulfillment process from click to delivery,
- Gives seller’s an open API that seller’s partners can use to interface with a seller’s business,
- Eliminates manual order management and prevents stockouts and missed orders, and
- Provides a merchant-friendly solution that is easy to set up and administer.
Commenting on Wyze’s choice of Pipe17 as its order management solution, Richard Wang – a Business Operations Specialist at Wyze – said: “As we were experiencing a lot of growth in terms of order volume on our DTC website, we needed an order management solution that could handle the load. We also needed to automate our ecommerce order fulfillment and inventory management processes, so that we could reduce manual effort and errors. It became crystal clear that we needed an order management solution that could work natively with MCF and integrate our ecommerce website and other back-end systems with MCF – and Pipe17 was able to provide exactly that. Using Pipe17 with MCF has really been a game changer for Wyze, enabling us to integrate, automate, and streamline our entire order fulfillment process.”
After the implementation of Pipe17 with MCF in June 2022, Wyze’s ecommerce order fulfillment operations underwent a total transformation. The company’s ecommerce order fulfillment process (which was previously manual, time-consuming, and labor-intensive) became seamless and automated – allowing orders to flow rapidly and smoothly between the Wyze’s DTC website and MCF.
Since Wyze started working with MCF in 2021, the smart home retailer has been funneling an ever-increasing amount of its orders from its DTC website to MCF – and this trend only accelerated after the implementation of Pipe17. As of November 2022, MCF handles around 75% of the order volume from Wyze’s DTC website – making MCF Wyze’s “3PL of choice.”
Amazon Multi-Channel Fulfillment (MCF) deserves a ton of credit for dramatically decreasing our click-to-delivery times from weeks to a matter of days. Ever since we switched to MCF and increased the volume of orders that MCF is handling on our DTC website, we’ve seen a massive improvement in the speed, efficiency, and reliability of our delivery operations – and our customers really notice the difference.
By using MCF and Pipe17 to manage its DTC order fulfillment operations, Wyze has realized a number of business benefits, including:
- Touchless execution: Wyze’s order fulfillment process is now fast and frictionless, from online checkout to customers’ doorsteps.
- Improved order delivery speeds: With MCF and Pipe17, Wyze has been able to reduce the average click-to-delivery times of customer orders by more than 50%, from 15 days to 7 days. And customers who are close to Amazon fulfillment centers can now receive their orders within 24-48 hours.
- End-to-end real-time visibility: Wyze is now able to maintain real-time visibility over inventory levels and order status and receive immediate notifications whenever there is a problem.
- Reduced operating costs: With the implementation of Pipe17 with MCF (and the increased automation that has resulted from that), Wyze has been able to reduce the number of full-time employees dedicated to ecommerce operations by 50% from 4 to 2 – leading to a significant drop in operating costs.
- Greater customer satisfaction: With more and more orders being fulfilled by MCF, Wyze – which monitors customer feedback very closely on its social media and customer service channels – has seen a surge in positive customer sentiment as a result of the fast and reliable fulfillment services that MCF delivers.
“Amazon Multi-Channel Fulfillment (MCF) deserves a ton of credit for dramatically decreasing our click-to-delivery times from weeks to a matter of days. Ever since we switched to MCF and increased the volume of orders that MCF is handling on our DTC website, we’ve seen a massive improvement in the speed, efficiency, and reliability of our delivery operations – and our customers really notice the difference. We’ve also received far fewer inquiries from customers about their shipments, and this is a big relief for us,” remarked Richard Wang.
Eric Morris summed it up: “With MCF and Pipe17, we’ve been able to automate our order fulfillment process, cut our delivery times in half, and leverage Amazon’s fulfillment network to provide a Prime-like experience for customers – while, at the same time, reducing overhead in terms of full-time employees needed to manage our order fulfillment operations.”