Ireland offers trained Java developers and proximity to European sellers.
Paul Demery , Managing Editor, B2B E-commerce
Overstock.com Inc. is opening a technology center in Ireland—its first outside of the United States—to expand its staff of hard-to-find software developers and better support its growth in international markets, says Steve Tryon, the retailer’s senior vice president, human capital management and international business.
“This positions us for a more substantial entry into the European market,” he says.
Overstock, a web-only mass merchant of excess merchandise and No. 397 in Internet Retailer’s Europe 500, is starting out with 10 to 20 software developers in a technology center in Sligo, in northwest Ireland. Overstock expects the staff to grow to more than 45 people over several years, Tryon says. The staff will consist primarily of Java software developers, filling a critical technology staffing need that Overstock has found difficult to satisfy in the U.S., he adds.
The new staff’s initial projects include improved site search functionality for searches done in the Spanish language. “We have tens of thousands of pages of Spanish content, but we need to optimize that for search,” Tryon says. He adds that the Sligo team will also work on site search functionality for other content Overstock offers on a smaller scale in French, Chinese and Arabic. While locating technology staff in Ireland, however, Overstock will continue to operate its e-commerce technology in the U.S., Tryon says. He adds that since overseas developers access its technology over the Internet, it still makes more economic sense for the retailer to maintain its technology infrastructure at its home base in Salt Lake City.
The Sligo facility will also help in other areas, such as in updating customs duties that Overstock must process based on the country of origin of inventory sold on its site, Tryon says.
In addition to the Java expertise, operating a facility in Sligo will also enable Overstock to improve technology assistance to European businesses that sell products through Overstock.com, Tryon says. “If you’re a European vendor to Overstock and something goes wrong with how your products are listed, we don’t want our partners to have to wait until 9 a.m. Mountain time to fix an inventory issue,” he says.
Overstock received 86% of its total net revenue, or $943.77 billion out of $1.10 billion, through vendors that drop-ship orders to retail customers for the year ended Dec. 31, 2012, according to its annual 10K filing with the Securities and Exchange Commission. It didn’t break out how many of those vendors were based overseas, but noted that maintaining and building relationships with such drop-ship vendors is important to “maintain a broad selection of merchandise.” The retailer says it has about 2,100 “fulfillment partners” that sell products on Overstock.com; it also sells items from some 10,000 artisans across more than 50 countries through the Worldstock section of its site.
Overstock ships to online customers in 100 countries, offering overseas shoppers pricing in their local currencies, though sales to foreign customers accounted for less than 1% of 2012 revenue, the retailer says.
Ireland offered Overstock an attractive financial incentive package through IDA Ireland, an agency of the country’s Department of Enterprise, Trade and Employment, to locate a technology center in Sligo, Tryon says. He declines to offer details of the incentive package. A spokesman for IDA Ireland did not immediately return a request for comment.
Overstock is No. 31 in the Internet Retailer’s 2013 Top 500 Guide.