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Success Story: How Kendra Scott Transformed Stores Into Fulfillment Centers in 9 Days

Success Story is a Sourcing Journal feature highlighting innovative solutions across all areas of the supply chain.

Future-proofing in the event of a pandemic is an arduous task for any retailer, but fashion jewelry and accessories brand Kendra Scott showed that a willingness to pivot can mitigate short-term losses and increase long-term relevance.

When Kendra Scott had to close its 108 stores at the onset of the Covid-19 outbreak, the brand knew it needed to keep employees working and cater to online shoppers. Additionally, its Austin, Tex., distribution center was limited to minimum basic operations and operated under full social distancing measures. This further hampered capacity even as inventory was rerouted to a third-party logistics provider in another state.

Out of necessity, Kendra Scott converted all its retail locations into mini-distribution centers. In partnership with supply chain solutions provider Manhattan Associates, the jewelry seller implemented a new ship-from-store program in just nine days, despite its headquarter employees working 100 percent remotely.

Upon using Manhattan’s Store Order Fulfillment platform to cut down a deployment process that the tech provider said can take three to six months on average, the specialty retailer moved to implement curbside pickup capabilities within its stores.

In pivoting quickly, Kendra Scott retained nearly 75 percent of its customers who previously shopped in stores by driving them online.

Generating new fulfillment capabilities even helped Kendra Scott reshape its renowned philanthropic efforts, with the Kendra Gives Back program temporarily replacing in-store events and donations with virtual events. When stores were closed, online shoppers could input a coupon code from the event to ensure 20 percent of a purchase’s proceeds went to the charitable organization of choice.

“I think it’s a testament to our employees, our corporate culture and how we operate,” said Tom Nolan, CEO of Kendra Scott. “We moved at lightspeed here. [Executive chairwoman and former CEO] Kendra set the pace and the tone 20 years ago when she started the business, and we’ve continued to carry it through. The customer is at the forefront of everything that we do. And we knew that we must be really nimble and pivot quickly to react to whatever their demands or needs are.”

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The fashion accessories business started working with Manhattan Associates in 2019, first leveraging its Order Management System (OMS) to take pressure off its distribution center. But a year later, in the heat of a pandemic with an uncertain holiday season lying ahead, Kendra Scott recognized the need to cover more ground as e-commerce spending skyrocketed.

Thus, the brand built a second distribution center in Dallas at the end of 2020. The new location helped support two-day transit to customers, both in Texas and nationwide.

Additionally, Kendra Scott entered a brief, exclusive partnership with Favor, an on-demand local delivery service, enabling app users to order same-day delivery on a limited assortment of jewelry from their local Texas store. This partnership lasted from October through Christmas Day.

‘You have to be prepared for anything’

Leading into the 2020 holiday season, Kendra Scott negotiated contracts with its shipping partner to protect them from future holiday shipping surcharges, further helping the company prepare for the sustained increases in shipping costs throughout 2021.

“I think 2020 taught us is that you have to be prepared for anything, and the one area that you cannot falter is the supply chain and the operational network, because there’s no greater mistake than letting your customer down because you overpromised and underdelivered,” Nolan told Sourcing Journal. “You have to make sure that you’ve got operational excellence from the supply chain network to the distribution center to customer service, all which funnels through e-commerce, our retail stores and even our wholesale partners.”

And in an era when supply chain bottlenecks are now the norm, Kendra Scott has fortified its supply network through diversification. Its jewelry products, which include earrings, necklaces, rings and charms, among other accessories, are sourced across China, Vietnam, India, Thailand and Mexico.

“We don’t ever want to have all of our eggs in one basket,” Nolan said. “The key to any supply chain is speed to market. We choose suppliers based on who can make the highest quality product at a reasonable price, and deliver in an efficient and effective way so we don’t let our customers down. Quality comes first. And speed is a very close second. We’re fortunate that we do all our design work in-house. We’ve got a design studio here, we have 3D printers here, so we know exactly what the final product will look like before we send it out.”

Building close-knit collaboration

Since the Kendra Scott headquarters is also located in Austin, the team promotes collaboration with both the brand’s departments and distribution centers. The teams even create shipping incentives ahead of the busy seasons like the holidays, Valentine’s Day and Mother’s Day to lessen order backlog. To liven up the distribution centers, the retailer decorated and outfitted the locations similarly to the headquarters, including chandeliers, fitness centers and snack rooms.

Here, the hallway in the Kendra Scott distribution center in Austin is adorned with patterns of the company logo.
The hallway in the Kendra Scott distribution center in Austin is adorned with patterns of the company logo.

Nolan said he and his leadership teams will intermittently spend time in the distribution centers to both learn more about the operations and partake in the floor processes.

“We don’t just walk around. Regardless of title, we’re picking and packing—putting products in the box. We’re reading customer comments,” Nolan said. “That helps address some of the morale issues that can for sure live in other DCs that I’ve seen in the past. You get to see where there’s breakdown, whether it’s in the pick-and-pack process, the gift messaging process, the shipping process or general flow through a DC. It gives us a new set of eyes on things, and it also shows people ‘Your role means a lot. We’re going to make sure that you’re a priority.’”

Since the Kendra Scott headquarters and its first distribution center are both located in Austin, the team promotes collaboration with both the brand’s departments and DC teams.