As retailers face pressure to sell across multiple selling channels, supply chain technology provider SPS Commerce Inc. is seeing its own sales surge.
SPS last week reported a 22% increase in revenue for the second quarter ended June 30, to $47.4 million from $38.8 million a year earlier.
SPS attributes the growth largely to the pressure retailers are getting from consumers to engage in “omnichannel” retailing, which lets them carry out a shopping process, from research to completing a purchase, across two or more channels with consistent information on customer order status and product availability. To do that well, retailers rely on systems from SPS and other internet-based technology vendors that show quickly updated information on customer orders and inventory availability across each of their online and offline sales channels. They also often rely on related systems that can automatically route customers’ online orders for fulfillment from the most appropriate distribution centers, from stores, to stores for customer pickup, or directly from suppliers to customers.
“Consumers have come to expect seamless shopping experiences and fast, flawless fulfillment across multiple channels, and legacy technology and solutions that support single-channel shopping are no longer sufficient in an omnichannel world,” CEO Archie Black said in announcing his companies Q2 financial statement.
In a second-quarter conference call with stock analysts, Black referred to several companies—including apparel manufacturer Fruit of the Loom, sporting goods brand Rawlings and retail chain HEB Grocery Stores—that have recently increased their use of SPS’s cloud-based supply chain technology to share sales, production and other information with their trading partners to increase sales and reduce inventory stock-outs both online and in stores.
“This is providing a tailwind to our growth,” Black said on the conference call, according to a transcript provided by Seeking Alpha. “Now more than ever before effective trading partner relationships between retailers and suppliers rely on collaboration to efficiently optimize performance and consumer engagement.”
SPS also reported for the second quarter net income of $352,000, down from $651,000 a year earlier.
For the first half, it reported:
Revenue of $92.95 million, up 22.6% from $75.82 a year earlier;
Net income of $1.396 million, up 12.9% from $1.237 million.
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