The Top Technologies Retail Brands Should Invest in at Each Revenue Stage

September 15, 2022

top-tech-for-retailers

Modern day retail brands rely on technology to get up and running, expand and continue growing. The technology they choose to invest in will depend on the company's growth plans, with brands’ tech stacks evolving along with them. As they reach new phases of growth, they’ll either add on new systems or replace existing ones. This article will break down the fundamental pieces of technology needed to get your brand to market, as well as touch on technologies to adopt as you grow. 

<$1 million: Make Money, Send Stuff

First The Commerce Platform

The very first piece of technology a retail company with an online presence needs to invest in is an ecommerce platform. Magento (now Adobe Commerce) used to be ubiquitous, but Shopify Plus and BigCommerce are the most common platforms currently. It’s worth noting that headless commerce and Salesforce Commerce Cloud have also been rising in popularity recently amongst enterprise brands generating between 25M - 250M in revenue who are looking for a custom level of detail on their sites. Everything we have mentioned up until now are all great choices once a brand begins to grow. When a brand first starts out, and is generating less than a million dollars in revenue, they will most likely adopt Shopify the basic plan or Woocommerce to get started. 

Then Comes Fulfillment i.e. Supply Chain

Next, you need to decide who is fulfilling your orders. Are you doing it yourself, or are you going to outsource fulfillment? There is technology available for each of these scenarios depending on the size of your company.

Most brands handle their own fulfillment when they first start out. They leverage a shipping software to automate shipping label production in order to fulfill their orders at scale and take advantage of pre-negotiated carrier rates to save money on freight. Most modern day brands (like Chubbies) gravitate towards ShipStation when they first start out. 

If a brand decides to outsource its fulfillment instead, a 3PL or Fulfillment Network is needed. ShipBob is a good starter fulfillment network that can scale with a brand as they enter their next phases of growth. As brands grow they opt for this method of fulfillment instead. 

$1 - $25MM: Time to Prioritize Data

Once your business graduates past $1 million and starts climbing upward, the need for the right technology grows too. At this point, your site should be up and running. BTW, we’re not going to do a deep dive into what sales and marketing technologies you might need because there are already great lists for that, including this site, that helps breakdown recommendations for the entire marketing tech stack. By now you’ll have begun fulfilling orders, yet we’re going to guess it’s been “scrappy.” Maybe your purchase order management has been through spreadsheets and PDFs sent and received over email. Maybe your customer data is housed in Shopify or Mailchimp? Or in that email with that customer success rep? It’s time to really begin focusing on data now. Primarily, this boils down to inventory and customer data.

Let’s start with inventory, your most precious and expensive asset. Now is the time to invest in how you categorize, manage, track and present it throughout its cycle. The core technology which drives most of this innovation and rigor is Enterprise Resource Planning (ERP) technology. Don’t let the “Enterprise” in the name fool you, even if you aren’t yet “Enterprise” in your revenue, if you delay investing in your inventory until you are, you’ll be sorry. The gold standard in ERP is NetSuite, but there are other ERPs serving smaller retailers, like Fulfil.io. When you do get an ERP like NetSuite, your accounting needs will be taken care of directly within the platform so you can move on from your former accounting software at that point. 

One last note on inventory management. Most retailers explore selling products in various channels during this stage. Companies that made their first million in D2C might start exploring marketplaces or vice versa. This multi-channel approach is great for business, but can be brutal on inventory management stuck in spreadsheets. Invest here before channel growth overpowers supply resulting in poor customer experiences. 

Now, on to customer data. If you don’t have one already, you need to get a customer relationship management (CRM) software. Early on, you probably tried to handle customer requests using a manual process like a help email or 1-800 number on your site. But, as orders pour in at mass scale, you suddenly realize you need automation. Adopting a CRM solution enables brands to manage all interactions and relationships with their customers, providing an exceptional and consistent experience throughout all touchpoints without having to increase headcount. Gorgias is the CRM tool of choice for modern day brands. 

Finally, a couple additional systems to consider at this emerging revenue stage:

  • Once you process more than 5,000 orders a month, you may graduate to a more complex fulfillment warehouse such as Whiplash that offers more customization and reverse logistics for midmarket enterprise growing brands. 
  • WFX - The go-to for Product Lifecycle Management for modern day brands in apparel. 
  • StoreAutomator - The tool of choice for Product Information Management (AKA Product Syndication). If you have many SKUs and are looking to sell on multiple different channels, this is essential. Without it, you would have to manually list all of your products on each channel you decide to sell on. 
  • If only all orders fit perfectly. But they don’t. And thus, companies need a straight-forward, customer-friendly return process. Happy Returns by PayPal is one of the most popular return management solutions for modern day brands. It is free for brands who offer PayPal as a form of payment on their website.  

$25 - $250MM: Scale

After you’ve crested $25 million, the data supporting the back office of your business should function like a well-oiled machine. Now, you want to invest in incremental improvements to each piece of the business to improve margin, cut costs (including keeping headcount nimble) and improve customer satisfaction.

Let’s start by revisiting your investment in inventory. When it comes to planning, forecasting demand and automating reorder points, brands should invest in Toolio early on. A robust planning solution like Toolio increases inventory turn, reduces out of stock inventory and improves gross margins by making sure that brands invest in reproducing the right amount of inventory for each SKU. If you wait too long to adopt such a solution, you’ll waste time, experience manual errors and eventually have to deal with markdowns that result in a loss of revenue for the company. Additionally, Toolio will plug into your OMS (order management software) or ERP (enterprise resource planning) of choice to pull in real time order and inventory data, aiding in demand forecasting and purchase order (PO) creation. 

Positive customer interaction and experience creates trust with consumers and tends to increase their lifetime value (LTV) for the brand. This is key, as turning customers into repeat customers will give your brand a solid reputation and long-term revenue. In order to build up this trust, capturing customer reviews and building up social proof is another area where brands look to technology for help. Modern day brands can adopt a review platform such as Okendo to make this happen. 

Lastly, it’s usually around this revenue range when a D2C brand begins to expand into retail and  an electronic data interchange (EDI) system is adopted. Retailers like Nordstrom and Sephora often mandate that orders be sent to them in a standardized format - called EDI compliant - so this kind of tech is required if you want to sell through bigger department store-like channels. Enterprise merchants gravitate towards Truecommerce and SPS Commerce during this period of time.

A couple additional systems to consider during this phase in emerging revenue:

  • Klaviyo - The go-to for email marketing and SMS Product Lifecycle Management for modern day brands. 
  • Leap inc - The retail platform of choice for brands looking to launch their own physical stores. 

$250MM and Beyond: Sky’s the Limit

After you reach $250 million, you have seemingly endless orders coming in, efficient handling of return requests, purchase orders in the queue and a humming review engine - all of which make for great data. At this phase, brands need a tool to help them analyze all these touchpoints along with their marketing dollars, and much more. This is when an analytics tool typically comes into play. For this, modern brands turn to Daassity, a tool that helps them centralize, visualize and analyze all of their data so they can continue making the right decisions to scale their brand. 

Of course at this stage there is a lot of potential for brands to continue evolving their technology, but the consistency of best-in-breed tends to deviate too much to warrant a summary from us. If you’re an enterprise brand looking for technology consulting, check out our friends at Columbus Consulting, Kensium Solutions and Dyode.

In Conclusion: The Perfect Retail Tech Stack

There you have it: an overview of the systems to implement at each stage of revenue. There’s much more to tech stacks we didn’t cover here, but we hope you’ll walk away from reading this with the following beliefs: Technology solves a lot of ecommerce challenges and improves a brand’s operational efficiency. Tech is meant to help save costs and keep operations lean, therefore you want to make sure you have the right tools everytime. 

What’s in your tech stack?

Emily Garcia
Head of Partnerships