TradeStone Software STARS 2013: Retail Rocks! Part 1

While I have repeatedly met with TradeStone Software’s top executives at the company’s head office in Gloucester, Massachusetts (and elsewhere, such as at the multiple annual NRF BIG Retail Show events in New York City) and seen its software in action, 2013 was the first time that I have ever attended the company’s user conference, STARS (Simplifying Technology Around Retailers and Suppliers). TradeStone Software offers merchandise lifecycle management (MLM) solutions to retailers, brand manufacturers, and suppliers. The company’s MLM platform has modules for the design, sourcing, ordering, and delivery of private label and branded goods.

Since its founding in 2003, the company has not done badly at all—it currently has nearly 50 large apparel (softlines) and housware (hardlines) retailers as customers. Organizations including American Eagle Outfitters, Belk, Boots US Store (a health and beauty retailer), Family Dollar, Guitar Center, Kohl's, Le Château, Meijer (a one-stop shopping destination for name brands), N Brown Group (a catalog home shopping company), Pacific Sunwear, ShopRite (a retailer-owned co-op chain of supermarkets), and Urban Outfitters are some of the customers whose delegates I have seen mingling or heard presenting at STARS 2013.

About 100 attendees, including featured speakers and TradeStone Software’s staff members, made for an informal and intimate gathering. The vendor’s top executives were approachable, casually mingling with the crowd, and they asked interesting questions during the customer and industry expert presentations to promote discussion. TradeStone’s customers, meanwhile, exchanged best practices and outlined some issues they’ve encountered in implementing and using TradeStone Software. Nothing struck me as phony, neither customer praise nor criticism (and some customers candidly asked for some improvements and enhancements).

Dressed up as Janis Joplin (the conference theme was rock ’n’ roll—presenters started their talk by naming their favorite band or performer and the very first concert they attended), the company’s founder and CEO, Sue Welch, opened the multiday event with a brief keynote speech entitled “One Platform to Support the Tribe” (with a nod to Seth Godin’s bestselling book, Tribes). She talked about the growing passion for brands and how companies are enabling a shift toward supporting Godin's “tribes” phenomenon—an effect of today’s always-connected, always-demanding consumers. The global village of the Internet has created brand communities, giving us constant and vocal feedback regarding what they want. 

In the context of TradeStone Software’s customers, the “internal tribes” within the enterprise continue to be busy using their enterprise resource planning (ERP) systems and MLM capabilities for sourcing, supplier management, and order management. But their brand communities, “external tribes,” might be having more fun inspiring brands and new offerings via the novel cloud and mobility-based Bamboo Rose marketplace. In the marketplace, retailers can turn over their buyers and customers’ wishlists to trusted suppliers, who then in turn can provide virtual showrooms for retailers. It can all be done in a number of private and hosted exchanges within a public exchange (a semi-public setup). In the future, TradeStone Software plans to offer many more federated cloud services such as private financing, tests and inspections, color services, trade shows and missions, integration templates, etc.

Carol Spieckerman: Retail Trends—Turning Evolution on Its Head

Carol Spieckerman, President of newmarketbuilders, gave a fast-paced presentation filled with concrete examples on - current retail trends—“Three Trajectories that Will Rock Your Retail Reality.” Her overall point was that there is a game-changing transformation happening in retail right now that is rendering traditional strategies obsolete—this is not an evolution, but rather a complete reinvention. Retailers are expanding their reach through new format launches, acquisitions, and social and digital forays. Retailers will no longer use platforms—they will become the multi-touchpoint platforms for others (agencies, brand marketers, celebrities, etc.) to promote their brands (i.e., they will no longer be just distributors). At the same time, brand marketers and consumer goods manufacturers are pushing into owned retail and direct-to-consumer businesses. Everyone is playing in everyone else’s sandbox, and the destinies of all retail stakeholders are being transformed in the process.

Citing a slew of retailer examples (which at times was hard to follow, like trying to drink from a fire hose), Spieckerman revealed the following three “retailNXT” trajectories (based on several internal coordinates) that will rock the retail reality in 2013 and beyond, along with tools and tactics for harnessing the transformation.

Trajectory: Big (Multichannel and Multimedia) Bridge Will Be the Next Scale

  • Coordinate #1—Finding treasure in transition. Consider how Walmart offered to move customers’ DVDs and Blu-ray discs to the cloud.

  • Coordinate #2— Transmedia brand storytelling (building bridges, rather than parsing the channels). Multichannel is an opportunity. Take for example the simultaneous and synergistic offerings of HSN TV, the HSN catalog, and

  • Coordinate #3— A stitched together scale. With many e-tailers going bricks-and-mortar, physical retail has never been more important, despite the availability of multiple other channels. For example, Walmart Express stores (customers can order items from super centers or online to be delivered to an express store for pickup), Sears mygofer, and Amazon Locker.

Trajectory: User Marketing Will Be the Next Shopper Marketing

  • Coordinate #1—Going post point of sale (POS). Every retailer is a media company, whereby content is branding, e.g., Apple, Google, and Amazon are vast content ecosystems.

  • Coordinate #2—Retailer-managed content and marketing (versus those vendor managed). There is even the future possibility that retailers might sell their big data insights to their partners.

  • Coordinate #3—Not every path is necessarily a path to purchase (but should nonetheless be offered to consumers).

  • Coordinate #4—Clicks to bricks (from online to physical stores), i.e., allowing shoppers to touch, as well as look.

Trajectory: Brand Ubiquity Will Be the Next Exclusivity

  • Coordinate #1— The notion of public brands. Brands as assets are evolving from private label to private brand to owned brand. Think Trader Joe’s or Wholefoods Market.

  • Coordinate #2— Here come the hybrids. Nobody, including retailers, brand owners, etc., manufactures anything. Rather they coordinate and manage their contract manufacturers.

  • Coordinate #3— Rise of the retail-to-retail (RTR) partners, or frenemies. Competing retailers will sell their private brands at competitors’ retail outlets; e.g., Amazon selling Kindle at Best Buy.

Spieckerman only briefly mentioned a few other themes (which can be explored on her blog) as follows:

  • The retail world is flat. Retailers must be more agile and lean, with flatter organizations.

  • National brands are in demand. Retailers must carefully balance the mix of private labels vs. national brands.

  • Hardware hype—everyone wants to own the entire platform, from hardware up all the way to content apps.

  • Proto-ships set sail—prototype + flagship store incubators, such as Walgreens test stores in Manhattan.

  • Bespoke brand deployment—along similar lines as the aforementioned transmedia storytelling.

Leslie Hand: Dealing with an Omnichannel World

On Day 2, Leslie Hand, Research Director, IDC Retail Insights, spoke about “Dynamics of Product Management, Merchandising and Supply Chain Convergence in an Omnichannel World.” While not as flashy, hi-tech, and fast-paced as Spieckerman’s talk a day earlier, Hand’s down-to-earth presentation certainly reinforced many of the themes and trends that Spieckerman had outlined. For example, she concurred that the bricks-and-mortar stores will not go away any time soon, as we all like to shop and often experience quality family time at malls (shopping, having a meal, even indoor playgrounds).

Hand takes credit for coining the term “omnichannel,” which can be defined as a retailer’s single view of both its customers (in terms of traffic, conversion, and analytics) and its products (in terms of inventory, pricing, merchandizing, and content). From the consumer’s point of view, nothing has changed with omnichannel—we continue to leverage whichever channel has been offered to us, and we expect a consistent message, price, and offering throughout the research, shop, offer, pay, receive, and service phases.

Omnichannel brands need to have a 360-degree view of both their operations and their customers, and this is a complicated balancing act. The fact remains that many retailers still maintain separate systems for their bricks-and-mortar stores and direct-to-consumer channels. The dynamics presented by omnichannel create opportunities to optimize processes and systems to more efficiently and effectively perform product management, inventory management, and customer analytics functions.

Session attendees learned about the value and importance of a synchronized approach to optimize product management, merchandising, and supply chain dynamics through an omnichannel lens. Hand outlined the following omnichannel effects on retailers:

  1. Everyone is a retailer…and a product innovator; e.g., Nike’s Fuel Band and retailers engaging product ideation software product like Spigit, Sopheon, or Imagintik in product innovation endeavors

  2. Focus on the individual customer via customization, localization, personalization. Previously, retailers grew by mere scale (brute force), but now, a customer’s attention is a growth potential

  3. There is an advantage to aptly intermingling all of the digital and physical assets; e.g., Amazon going physical, Walmart going digital, Tesco and John Lewis opening virtual walls of products for home delivery or holiday shopping.

  4. Inventory is made lean, and assets are better used.

  5. The Sharing Economy—exemplified by the advent of the Physical Internet, the democratization of parcel shipments (i.e., anyone can now track, manage, and receive a shipment for a customer—Hand cited examples of retailers paying customers to deliver to another customer in their proximity), and product sharing (Zipcar, Rent the Runway, CoutureSqd, Rocksbox, ShoeDazzle, FreshNeck, etc.)

While ominchannel is challenging, retailers have more tools for success than ever at their disposal, if they know how to use them. Hand concluded her talk with the following omnichannel best practices:

  1. Engagement systems (improved listening) are the way of the future. Influence requires persistence, customer intimacy, and making offers that count. Required technology in this regard: big data and analytics, in-memory, social, and mobile tools.

  2. Address inventory accuracy and out-of-stock (OOS) issues with tools that enable visibility and real-time movements—foundational systems, omnichannel integration, real-time inventory accuracy, order execution, order fulfillment, and order routing.

  3. Adopt an enterprise “mobile first” policy. Urban Outfitters is a great example—the retailer’s associates use mobile devices for sales, product search, inventory management, pricing/labeling/signage, order processes, markdown management, workforce management (WFM), task management, etc.

  4. Shorten merchandize planning cycles and reevaluate often. Look to Saks Fifth Avenue, updating its strategy and embracing omnichannel content practices. 

  5. Focus on inspired, value-oriented, and trusted product development and assortments, with transparency and traceability when it comes to sourced materials. Let the scandals that plague Lululemon Athletica serve as a warning.

Part 2 will look at TradeStone's core capabilities and what lies ahead for this vendor.

See also
TradeStone Software Presents Bamboo Rose
NRF 2013 Highlights: Technology Driving Customer-centric Retail
“Act Vertical” vs. “Go Extinct” Retailers
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