Another former eBay Enterprise company is rolling out a new name along with a new strategy. The new company, called Radial, will phase out its business of operating e-commerce sites for such big retailers as Toys ‘R’ Us Inc. and Ace Hardware, while focusing on selling fulfillment, payment and cross-channel services to midsized retailers as well as the big chains that had been its customer base dating to its origins as GSI Commerce.
The Enterprise services unit now called Radial spun off from eBay Inc. in November, along with other technology companies eBay had acquired. Besides a new name, Radial president Tobias Hartmann says the company also has a new focus on providing its omnichannel software services to midsized retailers as well as the big retail chains that formed its customer base in the past.
That will mean Radial will no longer, after its e-commerce platform contracts end or come up for renewal, operate e-commerce platforms for retail clients that eBay Enterprise and its predecessor GSI Commerce previously operated, including Toys ‘R’ Us Inc. (No. 35 in the Internet Retailer 2016 Top 500 Guide) and Walgreen Co. (No. 37), the company says. Instead, Radial will seek to steer them to e-commerce platform vendor Demandware Inc., with which the former eBay Enterprise agreed in January to integrate technology and services.
“As contracts end or come up for renewal, we discuss with the customer their preference,” says Stefan Weitz, chief product and strategy officer at Radial. “Our relationship with Demandware enables us to easily get them up and running on an excellent Demandware user experience.”
“Revenue will be more than made up through our focus on mid-market, expansion of offerings, and more modular sales—people can buy only certain services if they want,” Weitz says.
Radial declined to elaborate on how the transition will play out. Internet Retailer’s 2016 Top 500 Guide shows the number of eBay Enterprise’s e-commerce platform clients totaled 20, compared with the prior year’s 21. Besides Toys ‘R’ Us and Walgreens, Radial’s e-commerce platform clients include Ace Hardware Corp., No. 630 in the Internet Retailer 2016 Top 500 Guide; Dick’s Sporting Goods (No. 62); GNC Holdings Inc. (No. 166); Sports Authority (No. 287); and Zales, part of Signet Jewelers Ltd. (No. 122). These retailers all were clients of GSI Commerce, which eBay Inc. acquired in 2011 and used as the foundation of its eBay Enterprise technology unit.
Major League Baseball’s MLB.com is no longer a client, the company says. Dick’s Sporting Goods is in the process of bringing its e-commerce technology in-house, a process the retailer says will be complete by early 2017.
There has been a steady erosion of e-commerce platform clients since eBay bought GSI Commerce, as more brands move away from completely outsourcing online sales in order to better control this growing channel. In 2010, GSI Commerce listed 30 retailer clients in the Top 500, according to Top500Guide.com, and a number have migrated to other e-commerce platforms since then. Among them are adidas America Inc., No. 66 in the Top 500, and BCBG Max Azaria Group LLC, No. 431, which moved to Demandware, and Burberry Ltd., No. 356, which now operates its e-commerce site on software from Oracle Corp.
Tom Griffin, senior vice president of corporate development for Demandware, says of the relationship with Radial: “In January when we partnered with Radial, then eBay Enterprise, it was to create an option for retailers who want an end-to-end outsourced model that is closely aligned from the ecommerce front end to the fulfillment of the orders. With the recent announcement that Radial will no longer operate ecommerce sites we look forward to engaging with retailers on how Demandware can provide Radial customers with an easy transition onto the Demandware Commerce Cloud while maintaining the advantages that they see from Radial’s back-office capabilities. We think that this combination is going to be powerful for omnichannel retailers for some time to come.”
Rebranding efforts began when the company became independent and was combined with eBay’s former competitor, fulfillment provider Innotrac Corp., Hartmann says. The Radial name and logo aim to connote movement and a core around which multi-dimensional parts balance, much like Radial aims to help retailers fulfill online orders from the time shoppers click on the Buy button until the merchandise is delivered to them, he says.
Radial no longer builds websites or provides marketing technology or design services, Hartmann says. It focuses on selling software that processes online customer payments, prevents fraudulent orders, handles customer service, lets retailers see their inventory inside stores and at warehouses, gives online customers access to buy from inventory at stores, and fulfills and routes customers’ orders quickly, Hartmann says. The merger with Innotrac has integrated that vendor’s expertise in picking, packing and shipping merchandise from warehouses, he says. Radial fulfills retailers’ online orders through its roughly 25 distribution centers in the United States, Canada and Europe.
Gartner Inc. analyst Penny Gillespie says it makes sense for Radial to start its services when an online order is captured rather than starting with the storefront because it simplifies the company’s mission and provides more flexibility to merchants that increasingly customize their websites using digital agencies to showcase their brands. Radial now leaves the selling to the seller and takes on the orchestration of fulfilling orders, Gillespie says.
“In the past, eBay Enterprise had had multiple e-commerce platforms and ecosystem solutions, yet seemed to lack a convergent, overarching strategy,” she says. “Today, they have a strategy.”
Radial delivers its software as “software as a service,” or SaaS, to its retailer clients, which means the vendor hosts it and retailers access it via the web. The company has more than 40 such clients in North America and roughly 20 in Europe and the Asia-Pacific region, Hartmann says. Radial provides software updates to all of its clients at once through the cloud but lets clients update key parts of their business operations when they want, he says. Radial hosts the SaaS service in its own data centers and is looking at using Microsoft Corp.’s Azure cloud service and Amazon.com Inc.’s Amazon Web Services, the company’s cloud-computing division, to serve its client base, he says.
Gartner’s Gillespie says Radial’s other services such as fraud prevention and payment processing help retailers deal with increasingly complicated issues so the retailers can focus on growing their businesses.
As part of its relaunch, Radial is expanding its omnichannel software services to mid-market retailers starting at $20 million in annual sales online, and it has added a few of those retailers as clients while rebranding and integrating operations with Innotrac over the past five months, he says.
For example, Radial’s software will enable Shoe Carnival Inc. to launch order online, pick up in store service and ship-to-store capability before the holiday season this year, says Kent Zimmerman, Shoe Carnival’s vice president of e-commerce. Zimmerman declined to say how many of the retailer’s 404 stores in 33 states and Puerto Rico will launch the service.
Shoe Carnival hired the former eBay Enterprise commerce services division to replace its former third-party logistics provider in September 2014, choosing it over a handful of competing vendors to handle customer service, payment processing, order management and omnichannel routing. Zimmerman says the eight-month process of ripping out the previous vendor’s logistics setup and installing Radial’s software was faster and less costly than buying software and hiring consultants or systems integrators to deploy it. Shoe Carnival declines to say how much it pays Radial.
Besides the technical integration, one of the most critical aspects of the process was training Shoe Carnival employees how to pick and pack merchandise for online orders, check for new orders and handle expedited orders on a daily basis, Zimmerman says.
Radial’s software enabled Shoe Carnival to launch its ship-from-store program for the 2014 holiday season and realize an immediate impact on online sales and a “dramatic effect on conversion,” Zimmerman says, though he declines to provide details. Stores now ship 100% of ShoeCarnival.com’s online orders, he says. Stores also fulfill in-store customer requests for shoes not in stock in that particular store. The program, called Shoes 2U and launched in early 2015, is growing rapidly with consumer demand starting to rival the online business, Zimmerman says, declining to provide details.
Zimmerman welcomes the new Radial name because “eBay” didn’t bring to mind an enterprise software company. “If you think about the idea of radiating, something that spreads and absorbs, it makes sense,” he says. “They’re trying to say they have an ecosystem that impacts every part of your business and spreads throughout the business like it is doing for ours.”
Here’s what happened with the rest of eBay Inc.:
- Pepperjam: Formerly eBay Enterprise Marketing Solutions, Pepperjam handles display, social, affiliate marketing and search engine optimization for 2,000 retailer clients and brands, including American Greetings Corp., No. 301 in the Top 500; Calvin Klein; Dick’s Sporting Goods; Kate Spade (No. 140); and Zales, the company says.
- Magento Commerce: On April 12, the company debuted software that’s hosted on the web and plans to offer a cloud service geared to smaller merchants later this year. Magento uses the Amazon Web Services cloud and packages it with Magento’s own software and set of tools for developers and system architects to manage Magento’s software in the cloud. Cloud service lets retailers pay for server capacity they use on any given day, rather than paying for hardware and software they must operate and maintain.
- Marketing firm Zeta Interactive in November acquired the customer relationship division of eBay Enterprise to expand its capacity for sending email and notifications to users and to help brands improve their return on marketing spend, the company says.