In its second-largest acquisition, Amazon buys the company for $970 million.
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The integration between the shipping and order management systems also lets Altrec pull reports that combine shipping data with figures on conversion rates, sales and cost of goods, and to project sales and profit margins from each shipping promotion.
The retailer shares information with its suppliers on shipping costs along with the effect of shipping promotions on sales. "We let them know what they're getting for their marketing dollars," Hnanicek says.
Altrec's ability to share this data on shipping promotions helps it get cooperation from its suppliers. "When we've looked to push particular brands, suppliers have said they wanted more visibility into how much they'd have to contribute to a promotion," Bauer says.
Last year, for example, it worked with a supplier of camping equipment to share the costs of running a free second-day shipping promotion in a successful kickoff of the summer camping season.
The supplier's role
"We communicated information on shipping costs and sales back to the supplier on a regular basis to let them know their role in the promotion, and how much money it would cost them," Hnanicek says.
The Kewill system also provides details on shipping costs that enable Altrec to maintain a high level of customer service at minimal cost, the retailer says. "If guaranteed shipping within two days is in our promotion, we don't necessarily need to pay for two-day shipping," says Bauer. "Our Kewill shipping software may indicate that, for some shipping zones, we can get a package to a customer within two days with standard ground shipping."
"The real-time understanding of this kind of information is huge," Hnanicek says. "The system paid for itself very quickly."
But as with the e-commerce system that provides a lot of valuable information, Altrec expects to continue learning how to capitalize on it, such as figuring which type of shipping offers generate the strongest sales for particular products or shopping seasons, he adds.
"It's a continual learning process to make better use of our data and develop different promotions with our suppliers," Hnanicek says. "We think there's a lot of opportunity there."