2018 Global Forum Recap for Wayfair/CastleGate Europe

Presented by:
Evangeline Wiles
Head of Account Management, U.S. Suppliers
Wayfair/CastleGate Europe

Evangeline Wiles has held management roles at Wayfair/CastleGate Europe for more than two years. She leads the account management and customer acquisition teams, helping Wayfair’s U.S. suppliers enter the European market by providing a market entry strategy as well as fulfillment and logistics service. Wayfair/CastleGate Europe is one of Wayfair’s newer business units and is growing rapidly, partnering with hundreds of suppliers to provide access to a rapidly expanding portfolio of logistics services.

Prior to Wayfair/CastleGate Europe, Wiles was the managing director of Jumia, an online shopping destination for a wide range of lifestyle products and services in Nigeria.

CastleGate Background

CastleGate is a logistics company that specializes in products for the home. Trusted by more than 500 of the largest home goods suppliers in the world, CastleGate provides a best-in-class chain and fulfillment platform dedicated to home goods. With more than 530 orders fulfilled daily, expected volume in 2018 will be 6,500+ truckloads and 9,100+ containers.

Two CastleGate facilities in Europe, in Lutterworth, UK and Kassel, Germany, handle European orders. CastleGate aims to replicate its success in the US market and expects strong growth in the EU market. They aim for a Pan-European network of warehouses and suppliers.

The Lutterworth location allows for one-day delivery for 95% of orders in the UK, and similarly for delivering orders to customers in Germany from the Kassel facility.

CastleGate Benefits for Suppliers

Wiles outlined the six areas that drive revenue growth for Wayfair suppliers:

• Markets: access to new markets with minimal upfront investment. Suppliers do not need to build their own warehouses.
• Logistics: order to delivery time reduction (OTD)

She gave examples of the dramatic difference between dropshipping vs. CastleGate in delivering an item of furniture made in Poland to a customer in Germany or the UK.  Lead times and transit times were reduced by at least half. A large parcel drop shipped from Poland to the UK could take up to 16 days and could be delivered by CastleGate in three.  This reduction in ODT leads to an increase in conversion rates.

• Logistics: late cut-off time for orders received daily. Many drop shippers operate on a 1 p.m. pick up time; CastleGate’s pick up deadline is 7:30 p.m., thus saving a day and resulting in significant business impacts.
• Logistics: reduced retail prices due to transportation cost savings and less damage

Wiles compared retail prices of lamps and furniture traveling between Spain and Germany. CastleGate reduces the costs of transportation because of reduced inbound handling. Because of their warehouse locations, CastleGate’s process requires fewer transportation segments and offers last mile services. Such savings can decrease transportation costs by 30% compared to drop shipping, making retail pricing more competitive.

• Visibility: increased online product visibility. CastleGate offers suppliers greater and more efficient online visibility. Products receive more shelf space in promotions, page placement and rankings because of the investment in Google ads.
• Forecasting: permanent product availability/forecasting products.

CastleGate’s proprietary forecasting and replenishment engine continuously improves product availability.  The system gathers and applies macro and micro level data points with Machine Learning to predict required inventory.

Logistics is at the intersection of the supplier-Wayfair connection. In partnership with suppliers, CastleGate can improve the order-to-delivery process to make the connections as efficient and as customer-aligned as possible, adding value to all. CastleGate intends to tackle the entire transportation chain with physical operations to drive down costs. Operations will include Asia consolidation, ocean freight, domestic drayage and domestic freight collection.

Evangeline Wiles took questions from the audience related to pick and pack fees, storage and fulfilment procedures. Their warehouses are mean for quick turn sellers and suppliers manage their own inventory, so if a vendor needs storage space for longer terms, other arrangements may be made.