How Thrive Market Manages Hyper-Growth in the Online Grocery Market

    Posted by Sophie Pagalday on Apr 17, 2018 1:45:24 PM

    Thrive Market teams up with HighJump

    With its mission of providing Americans with quality food at an affordable price, Thrive Market has teamed up with HighJump to become a major player in the online grocery shopping sphere.

    Thrive Market has never shied away from a challenge. Since its launch in late 2015, the online grocer has set out to change the country’s eating habits by improving access to quality health and wellness products with a novel approach to grocery shopping.

    “I often describe this as a marriage between Costco, Trader Joe’s, Amazon, and Whole Foods,” said Matt Terry, Thrive Market’s VP of Fulfillment, at HighJump Elevate 2018.

    Not unlike discount brick-and-mortar grocers, Thrive Market sells quality foods at wholesale prices to members, who pay a subscription fee to cover the cost of service. Like a typical ecommerce company, however, it doesn’t have a physical outlet; everything is delivered directly to the customer on their own timeline. This approach has helped Thrive Market to overcome the twin challenges of cost and distance that so often prevent Americans from eating well.

     An Unfulfilling Setup

    With a compelling business model on hand, Thrive Market was ready to hit the ground running. Rapid growth soon became a hallmark of the company — so much so that its initial goals for operational expansion couldn't keep pace with its expanding customer base. “Everything we planned from a timeline standpoint had to be pulled forward pretty drastically to meet demand,” says Terry.

    The rapid expansion forced Thrive Market to upgrade its supply chain sooner rather than later. After using its Los Angeles headquarters as an ad hoc warehouse for several months, it found itself ready to expand into a larger facility. Unfortunately, the company’s first actual warehouse was another paper-and-pencil operation backed by rudimentary logistics software. As a result, the facility that should have housed Thrive Market’s first fulfillment center for two or three years became inadequate to keep up with its needs within three months.

    After realizing that its LA office wasn’t an ideal location for a nationwide distribution center, Thrive Market began its search for a permanent warehouse outfitted with an effective warehouse management system (WMS). In keeping with the breakneck pace that’s defined the company from the beginning, it planned to start shipping within four weeks of signing a lease and finding a WMS provider. Thrive Market soon found in HighJump a supply chain partner that could work on any deadline.

    A Mad Dash to the Finish Line

    After leasing a facility in Batesville, Indiana, Thrive Market chose HighJump to supply and install its WMS. Thrive Market needed four things from its WMS provider: the speed to help the company set up operations, the stability to manage heavy volume, the flexibility to accommodate rapid shifts in demand, and the scalability to handle growth throughout the company. In short, it needed a WMS that could meet its immediate needs and advance its long-term goals.

    With the four-week timeline to begin shipping as their goal, Thrive Market’s brain trust was forced to think on its feet and work grueling hours — but with HighJump’s help, it made the turnaround. In just four weeks, Terry and his team handled what might have taken other companies four months. After hiring a project manager and limitation team in the first week, they began experimenting with the HighJump WMS in the second week and worked to perfect it in a trial and error process that Terry called “testing and stressing.” By the third week, Terry and the warehouse staff were training employees and integrating the WMS into their operational infrastructure. By the end of the fourth week, Thrive Market sent out its first order for delivery.

    The Road Ahead

     The story doesn’t quite end there. While Thrive Market managed to meet its ambitious deadline to begin shipping, it still wasn’t quite equipped to handle operational needs on the scale to which it planned to expand. In the midst of these growing pains, it needed to strike the right balance between cost, control, and speed.

     With the company preparing to open its second fulfillment facility in Reno later that year, Thrive Market wanted to maximize the efficiency of its Indiana distribution center. Despite the center’s successful launch, its employees were not yet maximizing HighJump’s software to its fullest potential. Thrive Market bridged the gap by installing a sortation center in the Indiana warehouse, and hiring internal programmers to manage everything from database version control to weekly product reviews.

    These upgrades have paid off in spades. Thanks to HighJump, Thrive Market has been able to improve its packing stations in Indiana and Reno, expand bandwidth with HighJump’s cloud, and better protect uptime during peak demand. Over the course of this year, it’s looking forward to creating its own data warehouse, changing its cartonization techniques, adding slotting, adjusting pack interface, and strengthening compatibility with in-house software.

     Since beginning operations two and a half years ago, Thrive Market has gone from completing 64 million orders in its first full year to 110 million last year. It expects to ship about 200 million orders in 2018. At every stage of the process, it’s relied on HighJump’s flexible WMS to streamline it supply chain, helping it devote its resources to what matters most: sourcing and shipping quality foods and beverages to its customers.

    Topics: supply chain, Warehouse Management Systems (WMS), Customers