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Demandware Acquires Mainstreet for Anywhere-Anytime Fulfillment

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Our data and instincts have been telling us 2014 was going to be a big year for cross-channel order fulfillment. It also is shaping up as a big year for partnerships and acquisitions in the space, because retailers would like a seamless integration between commerce and order management systems as much as their customers would. Given the need, it’s not so surprising to find cloud commerce tech provider Demandware acquiring Deerfield Beach, Florida based cross-channel order and fulfillment vendor Mainstreet.

Announced on Thursday, January 23, the deal is effective immediately with no transaction dollar specifics provided. Demandware acquired the entire company and is planning to keep all employees and offices as part of the deal. Mainstreet founders Michael Sandler and Nick Laurie will join Demandware’s management team.

In the past few years we’ve seen some rapid consolidation in the order management space. At the NRF Big Show, Manhattan Associates announced a strategic partnership with Starmount. Last year, SAP bought hybris. Oracle was early to the game, buying ATG in late 2010. IBM was also an early believer, and bought Sterling Commerce’s Distributed Order Management system in mid-2010 to complement its Websphere Commerce toolkit. Of course, Epicor’s Retail Enterprise Selling application might well be the granddaddy of all distributed order management systems. I can remember first hearing about the software when it was still called “Found” back in 2002. It seems that in the enterprise space, commerce and order management will be tightly linked, and that’s good news for retailers.

But Demandware’s announcement begs the question “Who is Mainstreet Commerce?” I confess I hadn’t heard of the company before, so here’s a quick primer:

  • The company was formed in 2003, and was 100% bootstrapped by its founders
  • Its product, BusinessFlow is used by more than 65 client companies including vineyard vines, Perry Ellis, Henri Bendel, BootBarn, Life is Good, Fila and others
  • The names above are significant, as they are joint clients between Demandware and Mainstreet. That means, integration has already been accomplished between the two systems and the Mainstreet client can be substantively larger than I might have expected
  • Other retail-relevant Mainstreet only clients include Zumiez, Live Nation and the Art Institute of Chicago
  • The solution is cloud-based, as is Demandware’s.
  • Mainstreet’s distributed order management solution simplifies order orchestration to deliver the “buy anywhere, fulfill anywhere” experience with fulfillment from warehouse, stores or drop-shippers.

Demandware’s stated goals for the acquisition include helping global retailers deliver on the strategic omni-channel imperative, add order management capabilities for customers and prospects seeing a single vendor solution, and of course, to expand market share.

Post-acquisition, Demandware’s priorities are to help Mainstreet scale support and operations, fold Mainstreet into its partner networks, and expand product, sales, and delivery capability to align with Demandware’s market footprint. The company will produce a unified roadmap and strategy for the combined entity as well.

What does this mean for retailers?

There are many retailers, especially smaller ones that would prefer to have “one throat to choke” or at least as few throats as possible. The combined new solution promises to make eCommerce on-boarding easier and more efficient. No one is forcing anyone to go with a single solution provider – those days are far behind us – but it’s a good idea to have such complimentary processes orchestrated together.

I also like the idea of raising Mainstreet’s profile. The number of Distributed Order Management solutions has seemed small. The more stable, scalable entrants that are out in the field, the higher the likelihood that those solutions will become continually more robust and give retailers more options.

I expect to see a lot more in the coming year and will be watching Demandware closely.

 

 


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Articles & Opinions January 28, 2014
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