Nordstrom acquires stake in supply chain software platform

One of the biggest challenges retail supply chain managers have faced over the past year or so has been trying to keep up with the rapidly evolving e-commerce market. Between changing consumer preferences and buying patterns, as well as the rising demand for faster and cheaper shipping and delivery processes, most brands are struggling with figuring out how to maintain a profit.

Many retail giants have reallocated spend away from brick-and-mortar stores to make more investments in supply chain technology and software solutions that help enhance inventory, fulfillment and distribution operations. For example, this week, The Wall Street Journal reported that part of Nordstrom Inc. has purchased a stake in DS Co., also known as Dsco, a provider of retail supply chain cloud-based solutions that make it easier to manage and communicate with a network of suppliers. The main specialty that Nordstrom will be able to leverage through Dsco is drop shipping features, which are becoming a critical component of omnichannel success for retailers.

Improving inventory integration for retail supply chains
Suppliers handling deliveries directly require more inventory management integration, something that the cloud-based software can hopefully help Nordstrom achieve. If it is able to facilitate more drop shipping, the source explained, this could lead to more cost-savings for the retail company because it would be able to reduce inventory levels.

Furthermore, The Wall Street Journal also noted that Dsco's platform provides a way for retailers to alleviate an issue they frequently encounter pertaining to inventory and order management tracking among suppliers through isolated software systems. Using a fragmented approach makes data-sharing inefficient and difficult; however, through Dsco's drop shipping solutions, Nordstrom may be able to overcome this obstacle.

"The retail supply chain is one of those big, cumbersome problems that nobody has had the patience or drive to fix, but the status quo also takes tremendous manpower and a financial toll on retailers and, especially, suppliers," Dsco CEO and Founder Jeremy Hanks said. "Nordstrom is aware of this dynamic and, like us, has realized that supply chains must evolve for retail to stay on top. Its partnership and investment in Dsco validate what we're about."

According to the software-maker, the difference between the Dsco platform and other software solutions is that both retailers and suppliers are able to select the method for communicating with one another and it provides them with data and technology control, rather than simply increasing retail supply chain visibility. Nordstrom Merchandising Group Executive Vice President Teri Bariquit indicated that this move is also aimed at helping to ensure consumers that the products they purchase online will be in stock and shipped on time.

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