January 17, 2014, 9:31 AM

NetSuite moves up among e-commerce technology providers to the Top 1000

Since starting to upgrade its e-commerce technology a few years ago, providing more options to customize web sites, NetSuite has increased by more than half its roster of Internet Retailer Top 1000 clients.

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Following multiple upgrades of its e-commerce and business software applications, NetSuite Inc. over the past two years has grown by more than half the number of clients it serves that are listed in the Internet Retailer Top 1000. In the most recent 2013 editions of the Top 500 and Second 500 guides, it now shows a total of 34 clients, including 18 that use its e-commerce technology to run their retail e-commerce sites, according to an analysis of data on Top500Guide.com.

That’s up from a total of 21 clients, including 15 using its e-commerce software, two years ago, as reported in the 2011 editions of the Top 500 and Second 500 Guides.

Much of NetSuite’s growth comes from clients that already were using the software NetSuite built its business on, web-based applications for accounting, inventory management, human resources and other basic business functions. That software is often called enterprise resource planning, or ERP. While clients cite the ease of exchanging data between NetSuite’s e-commerce module and its core accounting software, many users of NetSuite’s ERP software rely on e-commerce technology from other providers.

Not all retailers that adopt NetSuite’s accounting software opt for its e-commerce module. Retail furniture chain Design Within Reach Inc., for example, said earlier this month that it will deploy NetSuite’s business operations software suite, including applications for managing financials, inventory, order management and in-store point-of-sale systems.

The NetSuite system, which will replace home-grown software, will enable the multichannel retailer to better manage data, including customer orders and inventory records, across its e-commerce site and 40 retail stores, says Bethany Kemp, the retailer’s vice president of technology and information systems. That will result in improved customer service and allocation of products to meet demand in each of its stores and on its e-commerce site, DWR.com, she adds.

Although NetSuite also offers technology for operating an e-commerce site, Design Within Reach saw no need to migrate off its existing e-commerce technology from vendor MarketLive Inc., which Kemp says will integrate well with NetSuite’s back-end business software.   

As NetSuite increases its number of Top 1000 clients, and as its existing Top 1000 clients grow, the vendor is gradually winning deals with larger clients in terms of annual web sales.

In the 2011 edition of the Top 500, NetSuite had three clients with 2010 web sales of more than $20 million. One of those clients, Canadian flash-sale retailer Beyond the Rack, no longer lists NetSuite as its provider in the current 2013 edition. Nonetheless, the 2013 edition of the Top 500 lists six NetSuite clients, with 2012 web sales exceeding $20 million, ranging from $23.6 million at DiscountRamps.com (No. 461) to $38.8 million at Rock Bottom Golf (No. 344).

To better serve e-retailers as they scale up in sales and demand more e-commerce site functionality, NetSuite has taken several steps over the past few years. In 2010, it introduced new offerings in social media and search marketing in a move to attract more retailers doing more than $5 million in annual web sales. Two years later it launched SuiteCommerce as its new e-commerce platform with more built-in capability for customizing web pages and mobile content. The SuiteCommerce launch was also designed to let retailers more easily connect web page designs with NetSuite’s back-end financial management systems, increasing their ability to customize checkout pages.

In 2013, NetSuite acquired Retail Anywhere for its Internet-based store point-of-sale technology, which companies like Design Within Reach integrate with their e-commerce technology to produce cross-channel records of customer transactions and available inventory. Last year it also acquired OrderMotion Inc. and its order management technology and services to improve the order management capabilities of SuiteCommerce and to position itself to win more business from OrderMotion clients.  

Even with its improvements, however, NetSuite continues to face stiff competition among vendors of e-commerce and business operations software as it reaches for larger retailers and strives to keep the fast-growing retailers already among its client base. One of its largest Top 500 clients, DiscountRamps.com, recently opted to go with Kalio Inc. for its e-commerce technology while keeping NetSuite for its back-end business software.

Five Top 1000 retailers list Kalio as the provider of their e-commerce technology. The largest, equestrian products merchant Dover Saddlery Inc., No. 350, did $37.6 million in 2012 web sales, according to Top500Guide.com.

Other e-commerce platform competitors to NetSuite among vendors to the Top 1000 are Oracle Corp., Demandware Inc., MarketLive Inc. and Volusion Inc. 

Oracle (which includes the former ATG e-commerce platform) has 187 clients overall in the Top 1000, including 99 users of its e-commerce technology, with nearly all of its clients among the Top 500. Its largest e-commerce technology client is Apple Inc., No. 3, with $8.83 billion in 2012 web sales.

Demandware has a total of 30 clients among the Top 1000, including 28 that list its e-commerce technology. Its largest client is apparel manufacturer and retailer Carters Inc., No. 157, with $143 million in 2012 web sales.

MarketLive shows 16 clients among the Top 1000, with the largest Orchard Brands Corp., No. 108, with Internet Retailer-estimated 2012 web sales of $240 million.

Volusion, which built its business serving smaller e-retailer, has recently updated its e-commerce technology to appeal to larger e-retailers. The company now has 14 clients listed among the Top 1000. The largest is Balsam Brands, No. 360, with $35 million in 2012 web sales.

To read previous Top 500 Insider stories, click here.

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