January 24, 2013, 2:26 PM

Open for business

Shopping for e-commerce technology becomes more complex as vendors consolidate and innovate.

Belk Inc. plans to spend $600 million on technology in the next few years so consumers can shop as they please, whether in the regional department store chain's bricks-and-mortar stores, on the web or through mobile devices.

In this omni-channel vision, e-commerce will be key, as the web is Belk's fastest-growing channel, more than doubling last year to $72.4 million in sales.

"The digital experience will be everywhere," says Jon Pollack, executive vice president of marketing and e-commerce at Belk, which is based in Charlotte, N.C.

A core component will be Belk's e-commerce platform, the RedPrairie Commerce Suite from RedPrairie Inc., which also provides Belk with customer service technology. But RedPrairie was not on Belk's vendor list just over a year ago. That's because Belk was using Escalate Retail for its e-commerce and customer service applications. RedPrairie acquired Escalate last year, adding a suite of e-commerce and related software to its traditional product lines of inventory and supply chain management applications.

Now Belk must adapt to working with a new vendor, RedPrairie, as it builds out its cross-channel technology platform. And it's hardly the only retailer in that position, as vendor consolidation has dramatically shuffled vendor ranks in the past few years.

At the same time, retailers are seeking new kinds of technology—such as to sell through social networks and mobile devices—and can find themselves in the position of having to plug software from small start-ups into comprehensive technology suites from large vendors, rarely an easy task. That complexity figures to make integration expertise a bigger factor in vendor selection for e-retailers in the years ahead.

Tackling the Top 1000

RedPrairie is just one example of a vendor whose e-retailer client base has grown dramatically through acquisition. The company, which listed only three clients among the Internet Retailer Top 1000 a year ago based on 2010 data, now claims the most retailers as clients in the fulfillment and order management vendor categories. It lists 40 retailer clients in fulfillment and 48 among order management. (Some of those retailers are RedPrairie clients in both categories.)

Other vendors expanding their footprints include eBay Inc., for which its acquisitions of GSI Commerce and the Magento open-source e-commerce platform now put it into a leading position in several categories (see chart below); IBM Corp. and Oracle Corp., which have each built out comprehensive software suites for handling multichannel order processing, web analytics, merchandising, marketing, fulfillment and inventory management; and relatively tiny Monsoon Commerce Inc., which now offers order management and fulfillment technology from Stone Edge Technologies in addition to its technology for selling through online marketplaces.

For retailers, the shuffled community of vendors presents new challenges and opportunities for retailers seeking just the right mix of technology to support and drive sales.

Oracle, IBM, RedPrairie and others are tying together broader software suites in a way meant to help larger merchants improve how they serve customers across multiple channels, while vendors targeting smaller and mid-tier retailers are developing more elaborate tools scaled to meet those retailers' needs.

J.C. Penney Co. Inc., for one, is adding more programs from Oracle to its lineup. It already uses an e-commerce platform and web site personalization technology from ATG, and site search from Endeca Technologies—two companies that Oracle acquired within the past two years. The department store chain, No. 20 in the Top 500 Guide, is now adding Oracle software for analyzing customer demand by product and managing merchandising and supply chains.

One way the technology does that is by providing real-time sales updates of individual items across all selling channels to merchandise managers' mobile devices. That allows managers to make quick decisions about ordering more hot-selling products, cancelling or reducing orders of slow movers, or modifying promotions according to consumer response. "We need an I.T. foundation that delivers real-time, mobile access to accurate information throughout the organization," Kristen Blum, J.C. Penney's chief technology officer, said in July when the retailer announced its technology upgrade.

Choosing a single vendor for most technology applications, however, is not the approach every retailer takes. Belk, for instance, integrates its RedPrairie e-commerce platform with Oracle's Endeca site search and navigation engine and IBM's Coremetrics web analytics. Belk also recently deployed software from Monetate for testing how well personalized content on web pages converts shoppers to buyers. Monetate has four other clients listed among the Top 1000.

Tech for the smaller players

Major vendors like IBM and Oracle, however, are also introducing Internet-hosted technologies at lower start-up costs designed to attract smaller retailers—a trend that will continue as vendors compete for small and mid-sized but growing retailers, says Brian Walker, vice president and e-commerce technology analyst at Forrester Research Inc.

It's not just the biggest vendors, however, that are offering new and expanded technology options. Yahoo Inc. offers a solid platform with good functionality and the ability to plug into outside technology applications, says Andy Splichal, WhatSheBuys' director of web and marketing. WhatSheBuys is an online retailer of apparel, home furnishings and gifts with a single store in California and No. 753 in the Internet Retailer Second 500 Guide. WhatSheBuys has since 2003 operated its e-commerce site on Yahoo's original Yahoo Store platform. The Yahoo platform has the most Top 1000 clients, with 60. (But as a company eBay Inc. can claim the most Top 1000 e-commerce platform clients, 82, when counting together its acquired platforms from GSI Commerce and Magento.)

To support order fulfillment from its own warehouse, WhatSheBuys plugs into the Yahoo platform order management software from Stone Edge Technologies, a company acquired last year by Monsoon Commerce. The acquisition increased Monsoon's number of clients among the Top 1000 to 32 from just two.

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