February 2, 2011, 4:38 PM

RedPrairie acquires Escalate Retail

RedPrairie enters the e-commerce tech market and gains dozens of retailer clients.

Lead Photo

RedPrairie Corp., a company known for web-enabled systems for managing retailers’ inventory, transportation and workforces, has made a major move into retail technology with the acquisition of Escalate Retail. Escalate brings RedPrairie an e-commerce platform, order management technology and other retail applications along with some 500 retailer clients. The purchase price was not disclosed.

The acquisition fills gaps in RedPrairie’s technology suite, which until now has not supported the customer-facing front end of order management and e-commerce systems, analysts say. And RedPrairie is getting Escalate’s technology and resources at a time of strong demand for integrated inventory and commerce systems as retailers seek the most effective ways to pull from all of their inventory locations to satisfy customer orders placed online, through mobile phones, via contact centers or in stores.

“This acquisition reflects a growing trend for companies to seek integrated, all-channel capability from their technology and solution vendors,” says Brian Walker, an e-commerce technology analyst at Forrester Research Inc.

He adds that Escalate will be able to sell its e-commerce, order management and personalization technology to RedPrairie’s global customer base, which includes retailers such as supermarket chains Giant Eagle Inc. and ShopRite. RedPrairie says its technology is installed at more than 34,000 customer sites in more than 40 countries. RedPrairie, in turn, will get the chance to sell its technology to Escalate’s customers, which include such Internet Retailer Top 500 retailers as Williams-Sonoma Inc., No. 26 in the Internet Retailer Top 500 Guide, The Estee Lauder Cos. Inc. (No. 133) and Brooks Brothers (No. 168).

“With this acquisition, RedPrairie will be ideally positioned to manage both supply chain and retail activities, from the time a customer first makes contact with the retailer—no matter the channel, touch point, or device—all the way through to fulfillment,” says RedPrairie CEO Mike Mayoras. “Additionally, we have enhanced our ability to leverage our workforce and inventory management solutions to help retailers optimize inventory and fulfillment processes regardless of where the order is in the supply chain.”

Adds Stewart Bloom, CEO of Escalate Retail, “More than ever, consumers are using a number of different channels to interact with retailers outside of the store from online and mobile devices, to call centers and social media among others. Our merging with RedPrairie results in unparalleled capabilities to optimize the customer experience, from search to sale to delivery.”

Analysts note, however, that it may take some time for the two companies to fully update and merge their technology suites. “The Escalate product set requires an infusion of investment and innovation to keep pace with the changing market requirements, something Red Prairie will hopefully support moving forward,” Walker says.

It will take some time for RedPrairie to integrate the Escalate suite into its own product offerings, but the effort should be worth it, says Paula Rosenblum, managing partnerr of research and advisory firm RSR Research LLC.

“It will take some time, but promises to add a lot of value,” she says.

Rosenblum adds that it will be crucial for the merged company to continue to support customers in both camps with a high level of service. “We hope they continue to provide the high levels of support customers are used to,” she says. “It’s important to keep day-to-day activities at the retailers’ disruption-free.”

RSR also notes that many retailers already use both RedPrairie’s warehouse management system and Escalate’s order management software, which should make it easier to integrate the two companies’ technology. “Because of their joint customers they have a lot of incentive to bring all the pieces together into one platform as soon as they can,” says Nikki Baird, managing partner at RSR.

Escalate Retail marks RedPrairie’s third acquisition this year. In January, it acquired SofTechnics, a provider of inventory and merchandise management technology used by grocery retailers, and Shippers Commonwealth, a provider of an Internet-based transportation management system used by retail chains including The Sports Authority Inc., No. 205 in the Internet Retailer Top 500 Guide, and Stage Stores.

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