TradeStone’s Software Helps Retailers Pump Out Product Lines More Rapidly, Looks to Help Add Consumers to the Design Process
Boston is well known for its cluster of companies developing software for computer-aided design (CAD), and managing the lifecycle of a particular product (PLM). But Sue Welch says there’s a need for companies managing the development of not just individual products, but entire lines of merchandise. That’s the hole she’s looked to fill with her Gloucester, MA-based company, TradeStone Software.
TradeStone‘s software, called “merchandise lifecycle management,” is out to help retailers manage entire lines or seasons of merchandise from inception to design to sourcing to getting the items into stores. The company’s customers include Lowe’s, Kohl’s, Macy’s, Urban Outfitters, American Eagle, ShopRite, Shoppers Drug Mart, and are spread across 70 countries.
The technology is especially relevant as retailers have moved from the conventional practice of putting out merchandise lines that follow the traditional seasons of the year, to putting out new merchandise every few weeks. “The retailers are working within very, very compressed cycles,” says Welch, TradeStone’s CEO. “They used to have two to four seasons a year, now they have 16. We facilitate all that.”
TradeStone’s software helps retailers quickly respond to customer preferences in stores, and track which color palettes and fabrics of a certain line of merchandise are hot in stores in order to influence the next season of merchandise.
Welch, a serial entrepreneur, says she was working in retail in the mid 1980s when she first saw the need for technology that tracks imports for merchants. She started IMC Systems Group, whose software she says was one of the first business applications for PCs—and the first application focused on importing. IMC struggled to make money, and the venture investors behind the company ultimately took it over. Two days later Welch started her second company, Rockport Trade Systems.
Rockport, which tracked both importing and exporting for merchants, had greater success than IMC, and rose to become the top software technology for retailers in global sourcing, she says. It sold to QRS in 2000 for more than $100 million, at the height of the dotcom boom, Welch says.
Welch enjoyed the fruits of her labors for a time. ”Then I got really bored with retirement,” she says. She brought the old Rockport team back together, and looked at how they could further tweak the technology’s applications. They decided to address the entire merchandising process, beyond just tracking imports and exports, and launched TradeStone in 2003.
Traditionally, the collaboration required to put together a merchandise line is incredibly fragmented, Welch says. Companies often use anywhere from five to 14 different applications for tracking information such as suppliers, designs, and inventory. Different members of the product and supply chain each track their data in separate spreadsheets and emails, making it rare for numbers across departments to match up. “It’s a huge integration nightmare,” she says.
The TradeStone technology helps gather the disparate information to produce “one version of the truth” for retailers, Welch says. The software also includes alerts about certifications and safety requirements, notifying vendors when they need to perform tests on their products, as well as informing the inspection agencies of the required safety procedures the products need to undergo. “It’s able to deliver not only faster products that are closer to the market, but also safe products,” Welch says.
In its history, the TradeStone technology has evolved to better enable the integration of product images into the lifecycle software so that designers can see the products, and has added drag-and-drop functions for a more interactive user interface, Welch says. TradeStone, which has 105 employees, is planning to integrate social media feedback into its technology in order to give customers an active role in the merchandise development process, she says. For instance, Tradestone is working to create games that consumers can play online and share the preferences on the color, fabric, and price of products within a merchant’s line, before the company actually starts developing the product. Welch says this foresight will better enable retailers to predict which inventory will sell the best, and will reduce the need for markdowns on items.
“We’re always looking to move prediction closer to production,” she says.