The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
Retailers find new ways to collaborate with suppliers—and win more sales.
Life is good on the South Fork of Long Island, N.Y., where Roy and Polly Stevenson decided a dozen years ago to buy a toy store in Southampton, a picturesque village 90 miles east of New York City set amid vineyards, horse farms and ocean beaches.
They set up shop as Stevenson's Toys & Games, determined to keep the store's small-town neighborly charm. "People come in here with their kids, because it's a fun thing to do," says Roy Stevenson.
But in a local economy that relies on a two-month summer tourist season, and where the population is sparse most of the year, the Stevensons learned that operating a local store was a tough business. "The good news is there's no Wal-Mart here, but the bad news is there's not many people," Stevenson says.
Bigger playing field
In 2001, shortly after putting his own name on his store and launching an e-commerce site at StevensonsToys.com, Stevenson began working with Shopatron Inc., an online trading platform that provides a way to get orders forwarded from manufacturers that he would not otherwise receive.
He says that Shopatron—by providing him information on how sales are trending for particular products in particular regions of the country, helping him figure how to stock products that will win orders—gives him an online sales edge with the dozens of the suppliers that provide him with the dolls, jigsaw puzzles and other items that pique the interests of children and parents from far away as well as in Southampton. He realized Stevenson's Toys could play on a bigger field, and at times, beat bigger retailers to sales of products other merchants don't carry. "I get a lot of business I wouldn't otherwise get," he says.
Stevenson's experience with Shopatron is one example of how retailers and suppliers of all types and sizes are using the Internet to collaborate in new ways that help both groups reach further into product lines to satisfy consumer demand. Organizations that have cropped up in recent years like NuOrder Inc. and the recently launched Bamboo Rose trading portal also are opening new communications channels that allow merchants and manufacturers to share information and build sales.
The expanded ways retailers are collaborating with suppliers comes at a time when competition among merchants is forcing them to build stronger ties with suppliers to get the products consumers want to buy, when they want to buy them, experts say. "Retailers recognize they need to respond to consumer needs more rapidly," Paula Rosenblum, managing partner of Retail Systems Research LLC, says. "A key way to bring products to market is to collaborate with suppliers, and portals are meant to simplify that."
As consumers place orders on the web site of a Shopatron manufacturer client, such as doll maker Corolle, Stevenson's Toys and other participating retailers that sell Corolle dolls view the orders in a Shopatron web portal and click those they want to fulfill. Shopatron then typically awards the order to a retailer based on the merchant's proximity to the customer and its history of accurately and quickly fulfilling past orders.
The system gives an edge to merchants like Stevenson's Toys, which can fulfill a complete order in a single shipment—providing, for example, a Corolle doll with a particular set of desired accessories like the pink slicker, cap and boots that go with the Les Cheries Rainy Day Set. By closely watching Shopatron sales reports for particular product lines, while also monitoring market trends and going with his gut feeling on what consumers want, Stevenson says he can decide which items to stock in large numbers to meet demand. That approach has helped him win orders even when larger retailers may be located closer to a customer but don't stock as wide a selection in a customer's desired product line.
In the doll category, for example, Stevenson has learned that it's worth stocking as much of the Corolle product line as he can. "I pretty much carry everything Corolle makes, because my chances of getting the order are larger," he says.
Collaborating on mobile
For retailers who must decide what, and how much, to buy in the constantly changing world of fashion apparel, NuOrder last August launched an Internet portal—also available as an iPad app—that lets retailers browse among images and descriptions of products offered by more than 200 manufacturers.
Retailers can put together lists of dozens of products on the screen of the NuOrder web portal or app, and click into each to see product details, including materials, available stock levels and expected delivery times—and then place an order for the desired items. The portal replaces an "antiquated" way that many retailers and suppliers still use for manually processing orders via spreadsheets and faxes, says Adam Bernhard, CEO of HauteLook, a flash-sale e-commerce site owned by Nordstrom Inc., who has personally invested in NuOrder.
Members of a retailer's merchandising team can also use NuOrder to share information among themselves on preferred styles and products, such as by clicking the thumbs-up Recommend icon that appears with each product image and product detail page (see illustration, page 20). For instance, a merchandise manager could hit the Recommend icon on the image of a particular style of Levi's jeans to let a merchandise buyer on her team know it would complement the retailer's denim offerings.
Sportswear manufacturer Adidas Group says NuOrder helps its sales managers and its client retailers' merchandise buyers get the right products to customers. "Although it is true that today's luxury becomes tomorrow's necessity, NuOrder is not a luxury," says Zoran Kozomara, head of wholesale sales for the Adidas fashion sportswear line Adidas SLVR, who has used the iPad app when visiting retail clients to help them place orders. "It's an amazing tool that lets me place orders quickly and accurately, allowing me to spend more time communicating and building relationships with my customers."