In its second-largest acquisition, Amazon buys the company for $970 million.
Edifice technology lets retailers share in-store consumer demand with suppliers.
SPS Commerce, a provider of on-demand, Internet-based supply chain management systems for retailers, has acquired Edifice, a company with an expertise in supply chain collaboration technology designed to share store point-of-sale analytics data with a retailer’s suppliers. SPS did not say what it paid for Edifice.
“Supply chain collaboration, powered by [point-of-sale] analytics, is driving the next wave of efficiency in the retail supply chain," says Archie Black, CEO of SPS Commerce. “With this acquisition, SPS gains Edifice's expertise in POS analytics, robust business intelligence solutions and relationships with many of the world's leading suppliers.” SPS enables retailers, suppliers and distributors share information through web portals.
Industry experts say the ability to share store POS data with suppliers can go a long way toward helping retailers maintain sufficient levels of in-store merchandise that customers want to buy. Many supply chain management systems provide visibility into the volume and type of products suppliers are producing and shipping to retailers, but they don’t always drill down into what’s actually selling in stores to let merchants and suppliers collaborate on which products, or combinations of products, are in most demand by store shoppers.
POS analytics data provides, for example, information not only on which products are popular with customers in particular stores, but also on which products are often purchased together, such as jeans and particular styles of shirts. That can help retailers and suppliers better plan product mixes, and, for example, to stock more shirts known to be popular with jeans buyers when planning a promotion on jeans.
“From a supply chain perspective, adding POS analytics to the mix is important,” says Nikki Baird, managing partner of research and advisory firm Retail Systems Research. “Store inventory is still pretty tough to maintain accurately, so the most reliable check on it is by looking at sales. From our research, retailers tell us that they are always seeking more visibility across the supply chain, but nowhere is it more important than in the store.”
Minneapolis-based SPS serves thousands of clients, including retailers, consumer products manufacturers and distributors. Its client retailers include Best Buy Co. Inc., Costco Wholesale Corp. and Midwest sporting goods chain Scheels All Sports Inc. Edifice has more than 500 clients worldwide among retailers, distributors and consumer brand companies, including Columbia Sportswear Co., KitchenAid Inc. and L’Oreal USA Inc.
Edifice will continue to operate out of its New Jersey headquarters and sales offices in London and Tokyo.
Best Buy is No. 11 in the Internet Retailer Top 500; Costco is No. 17 and Columbia Sportswear is No. 257.