How Omnichannel Brands Can Compete Effectively [Video]

2024 will be here sooner than some brands can fulfill a standard order, and while our predictions for the trends of the coming year will drop early Q1, we figured the best way to celebrate the last 365 days is by revisiting the best lessons we can glean from the past.

Over the last several decades, consumer behavior has shifted and with it, new challenges and opportunities have arisen for brands and their supply chains.

Not too long ago, almost all consumer purchases were done in a brick and mortar location, with most of these purchases confined to big box retailers. With the advent of e-commerce, the availability of choice exploded and brands have had to adopt an omnichannel approach to find and reach consumers where they are - on their websites, social channels, and other physical and digital marketplaces.

In our 2023 keynote presentation, our CEO and co-founder, Sean Henry, shares how Stord is helping brands overcome the complexities and costs when constrained and limited with a traditional sales and logistics approach rather than positioned to compete effectively  with an omnichannel sales and cloud supply chain approach.

There’s a lot in here about how you should look at your supply chain operations and the technologies that are available to optimize it.  But if you’re interested in how to sell more, save money and eliminate headaches, you won’t be disappointed!

I highly recommend you watch the entire video, but if you need a TL;DR version here it is.

Challenges Most Brands Are Facing

How Modern Omnichannel Brands Succeed Today

There is a lot more information to enjoy in the full keynote including a comprehensive look into our warehouse management system, Stord One Warehouse, our order management system, Stord One Commerce, our parcel optimization solution, Stord Parcel, and much much more.

If 2023 has taught us anything, it is that the problems brands face aren’t going away anytime soon, and clinging to legacy fulfillment thinking only creates more headaches and more cost centers.

In order to stay competitive, continue to grow, and achieve a sustainable customer experience, brands need to think holistically about their fulfillment strategy. While all fulfillment strategies are built from the same parts, the quality and assembly will spell the difference for their success in 2024 and beyond.

Transcript - A Paradigm Shift for Supply Chains

Please join me in welcoming Sean Henry. CEO and cofounder of Stord. Here today, to share how Stord is making supply chains a competitive advantage through cloud supply chain.

Hey, my name is Sean Henry, and I'm the co-founder and CEO of Stord, the pioneer of cloud supply chain - the convergence of all the physical and digital elements a brand needs to build and operate their supply chain and make it a competitive advantage in today's environment.

Today, I'm going to talk to you about the trends we're seeing firsthand with our brands and today's supply chains. Our solution and what it is that we've built in cloud supply chain. And ultimately, our product roadmap and a lot of the new innovations that we're pushing out in 2023 and the year ahead.

But let's start by talking about where brands have come from over the last few decades and how their supply chain has evolved.

To start, there's been an undeniable shift over the last two decades in and around supply chains, but more broadly around commerce.

Consumers have shifted from going to retail stores and purchasing items at the same stores over and over, to a broad omnichannel proliferation.

They're faced with dozens of places to buy the same items, and ultimately these brands are now competing based on their supply chains.

As this has happened, brands have had to build out increasingly complex supply chains that have left them with more and more physical logistics partners and digital systems to manage these challenges. Ultimately leaving them with more fragmentation and incomplete solutions than ever. It's very hard for them to operate this way and keep just scaling on top of this infrastructure year after year.

Brands went from, at one point before that omnichannel proliferation, being able to just have one or two warehouses next to their factories, maybe the East Coast or the West Coast, and that single node of inventory was enough to reach all of your consumer expectations.

But as that environment shifted, supply chains really haven't kept up.

Brands instead have moved third party.

To 3PLs in the third party logistics industry.

And the rise of that has created fragmented complexity for your average brand. In 2001, less than half of brands had ever used a third party, an external 3PL supply chain partner. Yet in 2016, over ninety percent of enterprises actively used one or more 3PL to get close to that end customer and substitute assets as they build out their supply chain.

 But what that creates is ultimately this fragmented race across your supply chain.

From the time your product is built to the time it's at that end consumer's porch or that end retail store, your product jumps across so many different silos of physical supply chain partners, whether warehouses, ocean ships, trucks, last mile delivery partners.

But ultimately, it also jumps across different systems. Each one of those relies off a different software, whether a warehouse management system, a transportation management system, or other, that ultimately doesn't connect back to you as a brand and help you run your business and manage your end consumer experience.

So this physical and digital fragmentation creates a lot of challenges.

While it may have seemed like brands have kept up with this rise of consumer expectations and proliferation of rapid delivery, it's been an incredible challenge. And many brands have woken up and said, there must be a better way.

And that's really where cloud supply chain comes in. A convergence of all the physical and digital elements you need to build your supply chain into one scalable platform that operates like a utility.

This is not the first time this has happened to a heavy back office function of your business allowing you to go focus more on your products, your services, and your customers.

Over the last decades, this happened in cloud computing.

There was one point where any brand would manage all of their computing infrastructure in house thinking it was their competitive advantage.

Whether you're a small startup just getting started, you would have to go purchase a server and keep it running day and night to keep your application or website running for your customers. You're an enterprise, you're having to deal with planning for your peak seasonality and spending millions of CapEx every single year to scale data centers, distracting you from your business.

Until, cloud computing came along and said, what if we could offer you this as a utility? With economies of scale spread across hundreds or thousands of businesses, and with expertise to help you figure out how to make the best use of your IT resources and of your data.

And that same thing is happening today in supply chains. While over the last few decades, brands have built complex supply chains in house and distracted themselves and spent a lot of capital, time, and team doing so. Now brands are focused on their customers again and on their products and really moving to the cloud, moving to brands like Stord who can offer them that infinite scalability of physical supply chain capabilities with software built in from the ground up. But ultimately expertise to help them figure out how to be more efficient, more effective, and more competitive as a brand.

And in that era we're going into, and ultimately what cloud supply chains enable are really four pillars of capability that brands must have to compete in today's environment.

It starts with that end-to-end logistics capability. You can't succeed if you can't move your product effectively to your end consumers.

But that logistics ultimately needs to be built from the ground up with software, so that your data is not siloed and that you can actually make better decisions. Drive the right efficiency and throughput and drive the right order routing and more in your logistics network. Your software really has to be integrated from the ground up. 

Because when it's integrated, you have unified data that you can leverage for your customer data, your inventory data, your order data, to make better decisions off of instead of trying to extract that data from all these siloed software systems. 

And then with that data, you need to be able to connect it with intelligence and build better outcomes - whether that's network design, inventory design, SKU analysis, and actually act upon those insights.

In cloud supply chain brings these four often far apart and complicated to get together pillars in one, so that you can leverage them in harmony to succeed as a brand.

And while those are very difficult to get on your own, Stord is building cloud supply chain to enable brands to tap into these simply and in the cloud. We give brands an end to end plug-and-play logistics network, taking their inventory from the port all the way to the porch of their customer.

That network is built with integrated software from the ground up to both operate those logistics capabilities and those individual assets would ultimately make optimized decisions across them to drive down your cost and drive up your efficiency.

And then we lean in with our expertise and our team to ultimately ensure that you're making the best decisions at every point and learning from other brands just like you that are on the cloud supply chain.

And altogether, when you take together these capabilities, you go from this fragmented siloed approach to your supply chain making hops across systems, providers, and leaving you exposed and liable for the end consumer experience and trying to pull all that together, to instead this unified approach - with one logistics network with one operating system and piece of software from the ground up to leverage for visibility, data, and insights, and one expert team to help ensure you're making the right decisions at every point of the journey. 

This is not just a theory. Stord is doing this today for hundreds of today's leading brands.

We've purpose built cloud supply chain from the ground up for today's omnichannel brands shipping over a thousand orders a day, who are obsessed with their end consumer experiences and continuing to out deliver the competition.

And while we already are doing this at scale in delivering to millions of consumers every single year, we're not done yet and we continue to invest in our capabilities because supply chains continue to adapt and continue to change. 

And that's what we're here today to share. A little bit about how our capabilities have come together since we started in 2015 and how we continue to innovate and drive more and more optimization into our physical capabilities and our software for our customers.

If you think about the overall product stack at Stord, it really breaks into two core capabilities.

Physical logistics and software.

I'll start in our software because it's where we've driven the most innovation, but ultimately ability to leverage, not just in our logistics network, but standalone as well modularly as you grow and adapt as a business.

We started building our software, really focused on building an integration and visibility layer. A single system that you could integrate your ERP systems to your financial systems to your sales channels, your retail partners, and your other supply chain systems, like warehouse management systems and transportation management systems.

The core of our platform, built out of a microservices architecture, serves somewhat as an ETL essentially for your business to connect all your different systems and normalize data and get better visibility.

But it doesn't stop there. Within that integration layer, we actually build best in class products. Starting with our order management system and most recently our warehouse management system.

Up first, I wanna share a little bit about Stord One Commerce, our order management system we built first in our fulfillment and logistics network, but is now a modular software that can be used independently as well.

Stord One Commerce helps combat a lot of different challenges that today's brands are facing.

Starting with omnichannel proliferation.

Over 90% of today's brands are constantly adding more sales channels in more ways to reach end consumers.

Whether those are additional retailers, additional e-commerce marketplaces, all of those add more complexity of more pools of inventory, more pools of orders, and more siloed customers and data.

And while that omnichannel proliferation occurs, not only do you face rising costs and rising complexity, but a key one of those costs is rising customer service costs. As you're delivering to so many customers across channels, your customer service team is now trying to understand the best way to react and respond as they get calls and give that customer real time data and confidence to ensure they keep coming back and buying more and more in the future. Those customer service calls can cost eight to ten or more dollars for every single call. And often that frontline customer service rep does not have the data they need to answer that question and give that consumer peace of mind.

And finally, as end consumers want faster delivery, almost all of our supply chain costs are related to that last mile, that final mile delivery to the porch of your consumer. Whether that's a parcel delivery to a consumer's home or a last mile less than truckload to a retail partner or consolidation partner, that last mile delivery is such a key component of the cost and the entire experience for the customer.

While these may sound like different trends and different challenges brands are facing, they really all are solved by an order management system That's where Stord One Commerce comes in. An order and inventory orchestration system built for today's high growth high velocity omnichannel brands who are trying to orchestrate the right decisions on every order and for every customer in their supply chain. While keeping consistent visibility and ensuring they don't overrun their costs of inventory of orders of customer service and more that results from that omnichannel proliferation.

Stord One Commerce, our order management system, launched last year and in a sense been adding more and more robust capabilities.

It's a very modular system, that can be leveraged on a base level, just to see your inventory and see your orders, or can be configured to really be that entire tool you make optimized order routing decisions out of, parcel selection decisions, customer service decisions, and help you expand across multiple channels, not just integrating to those new channels and capabilities, but ultimately managing your inventory and order other rules across that omnichannel environment.

A powerful system with more and more add ons that we continue to build as we see brands face new challenges that are rising with this omnichannel proliferation.

Some of the most exciting capabilities are both that multichannel capability - helping you reach new customers, configure rules, and make smart business decisions such as what to do with my inventory, what to do with my orders across competing channels, what to prioritize as a result - while helping you with customer service so that you can reduce the average “where's my order?” call and costs and, time to resolution for your end consumers and drive hard cost improvement for your teams.

While also building more of a complex rules engine and orchestration engine to help you with parcel optimization. Which we'll talk a little bit more about where we talk about Stord’s parcel capabilities later in this presentation. Or just building robust order routing rules. So that with every new channel and every new warehouse you add, you're ensuring the right order goes to the right warehouse for the fastest delivery at the lowest cost.

And these are typically very hard rules to configure.

If you're your average brand in a traditional logistics environment, every single time you add a new logistics partner, a new warehouse, let's say, you're going back to a consultant or to an IT up to reconfigure your order management system to take into account those new sales channels, those new points of inventory and how to make better decisions.

Stord One Commerce is really built to pull the data you need about your inventory, your orders, your customers, your facilities into one system, but also the orchestration on top of that. So as you adapt, as you get on new channels, as you face new challenges, you can keep driving optimized decisions at every point for your end consumers.

So today, Stord One Commerce is handling millions of orders every single year for our consumers and driving massive results.

It starts with reduction of spend. When you're routing that order correctly and you're selecting the right parcel, your cost per order can go down dramatically in ways you can't achieve on your own as a business.

It boosts your consumer experience, not only giving a better delivery promise and speed up front, but also ensuring more customers come back over and over because they had a best in class experience and can trust your business.

While driving additional revenue in sales based on that better promise and more consumer repeat buying, but also on more channel exposure, enabling you to sell in more places simply.

And then ultimately, improving your operating efficiency so that you can do all of this without scaling your team, your assets, your head count, and more and you can have a system to make these decisions out of and, essentially, expand your capability as a team.

Altogether, Stord One Commerce is able to drive robust end consumer experiences that keep your customer coming back and buying over and over while giving your team the visibility you need over those orders to make the right decisions, plan for the right sales channels, plan your inventory correctly, and make the right decisions holistically. While ultimately reducing your costs and improving your end consumer experience.

And while Stord One Commerce is a great system to run a multi-node complex network and/or be your business tool for facing your consumer delivery questions, operations, and each and every order. 

Within each point of that network is really where we place Stord One Warehouse.

A purpose built warehouse management system built by operators, for operators, whether 3PLs, third party warehouses, and logistics providers, or brands operating facilities.

Stord One Warehouse is a warehouse management system designed to help with a lot of today's challenges that are plaguing brands and causing rising costs.

Warehouses are a really focal point in the financial system of your average business because that's where your inventory is held. CFOs need visibility to succeed in understanding your current inventory, your velocity, when to order more products, and that can be very challenging with traditional warehouse management systems that are siloed, versioned, and not integrated across multiple locations.

And while inventory is one cost center of visibility, a brand's other second largest cost centers typically labor and workforce affectivity.

Trying to improve the throughput of your existing labor before you go get more labor is the core of how to drive a profitable operation in your warehouse.

Because each and every year, warehouse and labor costs continue to rise over and over again. That can be solved oftentimes with automation and material handling equipment, but that requires large capital expenditure and investment and often has a long payback period to realize those efficiencies.

Whereas software, a warehouse management system can make an impact on day one.

And so, after trying almost everything on the market, since we started stored in 2015 testing existing off the shelf systems building products for ourselves, we built Stord One Warehouse as a purpose built warehouse management system built for scale - whether you are a logistics provider or a brand. 

After instituting Stord One Warehouse in many of own locations, and a lot of our 3PL partners and some of our brands, we've seen incredible results.

We've seen a rapid rise in the increase of orders throughput per day, without improving and increasing labor. We've seen a reduction in the time it takes at the pack out station. And those not only improve workforce efficiency but also improve workforce retention as it leaves to a better frontline associate experience in the warehouse.

So these are real benefits that have hard costs on day one for ourselves, our 3PL partners, and brands leveraging the Stord One Warehouse system.

And a lot of those efficiencies come not only because we built Stord One Warehouse, seeing a lot of the challenges ourselves firsthand, understanding what needs to be prioritized and building in a cloud based and agile way, but also because of our features where we've built things to ensure workforce and operational efficiency in some of the pick paths and assignment of orders. We built better labor management practices into the warehouse management system from the ground up so that you can have the right amount of staffing every day that you show up to work based on your order volume and service levels.

We've ultimately built it to be omnichannel from day one because we've seen a lot of brands and a lot of logistics providers may be great at B2B shipments and retailers or end consumers and e-commerce shipments, but today's world is omnichannel. Your average warehouse needs to be able to face both.

But ultimately, while improving capacity and ensuring you could better plan your inventory storage, your labor slotting, and more so that you can scale more without having to scale your costs nearly as much.

In combination, these features make Stord One Warehouse a very compelling system, whether e-commerce, B2B, or an omnichannel brand to realize benefits from day one. And we haven't just seen this ourselves.

We've seen this in tried and true logistics operators who have benefited from our system rapidly. Not only given our fast implementation, with fast and efficient savings on each and every order as they get workforce efficiency and throughput efficiency, but with some facilities claiming over a 50% improvement in their order throughput. These are hard costs and hard results we're able to drive with a warehouse management system.

Now let's take a step back and look at our physical logistics network, which is really the area we started building Stord back in 2015. We built a lot of our software into that logistics network from the ground up and have since launched it into the market for brands to leverage and succeed with on their own. But our logistics network is really the cornerstone of where we built those systems. Starting with a port-to-port logistics network, spanning warehousing, fulfillment, and freight and last mile. We've built a network designed to help today's omnichannel brands make their supply chain a competitive advantage, tapping into infrastructure at scale with economies of scale and shared efficiencies they get across the hundreds of brands and millions of shipments we provide in this network.

Stord logistics network is able to drive better end consumer experiences that are at a lower cost than a brand is able to achieve on their own without having to build all that capability in house themselves.

Today's leading brands wanna focus on their product and their consumers instead of dealing with all these fragmented logistics assets and partners.

And the way we've built this network really starts with our fulfillment and warehousing footprint.

When we launched, we started building our asset light network, which today comprises over a thousand existing partner facilities across North America.

These facilities are often used for B2B inventory for on demand applications for getting inventory close to the edge close to your customer dynamically.

We then layered in today seven of our own facilities, Stord operated, Stord leased and run and managed facilities in this fulfillment network that we're turning on an additional million square feet of capacity for in 2023 bringing us to over two million square feet of self operated space across the US.

And these facilities are all optimally placed across this hybrid network, whether it's a Stord warehouse or a partner facility. The operation to our customer feels the same as unified and collectively this network gives over a 99% two day delivery experience to end consumer.

Brands leverage this network to configure what delivery speed they need and their consumers want rather than what they can accomplish. Customers are able to rapidly turn up the dial on delivery speed and they're able to see fast results in their e-commerce checkout conversion and in their customer satisfaction.

But it doesn't stop there. We've been listening to our customers and heard the challenges they faced over the last few years, often not only having different pools of inventory orders for their BTB and BTC, hence why we stress omnichannel in our systems from the ground up, but ultimately different geographies expanding from the US to reaching consumers in Europe. And Stord is excited to bring our partner network of fulfillment facilities into Europe in 2023 helping brands deliver to their consumers across the pond just as fast.

And across all of these locations as we continue to invest in our network and reach greater scale, greater throughput, and greater quality for our customers - we continue to invest more and more in automation and efficiency.

Over the last few years, we've tested a lot of different robotic systems and we've continued to implement AMRs and other technology that help us reduce our cost per order, which translates into savings for our brands, but ultimately improve our efficiency and our throughput in each facility, which enables our brands to really unleash scale and not be hampered by throughput and workforce. Instead, we're ensuring we can meet their order volumes and scale with them for years to come.

So we continue to invest in these capabilities in all of our fulfillment centers. 

But ultimately, fulfillment connects to the end customer through our next capability, which is really, Stord Parcel, a unified and carrier agnostic last mile delivery service designed to reduce costs, improve speed, and provide better visibility of that last mile tracking and customer experience.

We're able to do this by aggregating dozens of existing carriers and with technology and decisioning, ultimately to ensure the optimal decision on every single order.

Let me walk you through how that's done.

There's really three components.

There's gate shopping, there's date shopping, and there's rate shopping.

First, with every single order, we look at the gates and ensure that we only go down to the carriers and the service levels that are applicable to your item, whether it's hazmat in a certain zip code, has certain temperature requirements, we only pare down to that list of carriers as our first gate.

After that, we look at the date that was promised to the end customer and decide only carriers that can meet that service level in that delivery promise. And that's not just based off the top level service level from the carriers, we're using millions of historical data points to ensure that even if it says five day delivery or ground - if it can get there in two days based off the data, we know that we can leverage that delivery and still meet your customer needs and give the robust service level needed. 

Date shopping is incredibly complex, but ultimately ensures your customer’s needs are always met. And that's really where we bring rate shopping into play, meeting your needs as a brand and as a business. Because while it's easy to match any delivery promise and any delivery speed by just overspending and driving more investment into your customer experience, it's ultimately important to mitigate last mile cost as it is one of the biggest cost centers in your business. So after ensuring we only look at the right carriers that can meet the date promised to your customer at the right cost, we look across all those costs and ensure we select the lowest cost and translate that into savings for you as a brand.

Now, Stord Parcel is a great example of how Stord builds physical logistics capabilities and software together from the ground up. Because all of this is software driven decision making that occurs in our parcel service that our customer gets from the benefit of just paying for their parcel and paying for their package.

And so if you look at all of these capabilities in unison, a brand is able to get their delivery time reduced while getting lower freight costs and happier end consumers that come back and buy more and advocate for them as a brand. Without having to build all of this system in house themselves.

And while we're incredibly excited, with all the value that the cloud supply chain is already providing for our customers, it's always day one here at Stord. And we're just starting and we're continuing to innovate in all of these capabilities and all of these products I've listed today. 

One of the most unique parts about our organization is how we combine physical logistics expertise with software expertise.

You'll often meet brands who say because they're a software company, they don't understand operations in high quality, high velocity operations.

Or vice versa, an operations and logistics company who only buys off the shelf software and can't build systems in house and from the ground up themselves.

We've been methodically building Stord as an organization, a team, and a culture to combine these unique experiences with hundreds of logistics experts and hundreds of software experts and builders and engineers together bringing best in class experiences and helping solve these challenges and see around corners that brands can't solve on their own.

This unique approach ensures that we're always innovating and raising the bar for our customers, whether it's in our systems or in our physical operations.

And it's really exciting when you can see these together in harmony. Such as seeing the stored one warehouse at our stored fulfillment centers and seeing how it drives more efficiency in our workforce and our operations, but also how it translates into savings for our end customers in those parcel selections and those last mile decisions.

And together that team has built technology that is unmatched and will continue to innovate and grow.

Our software replaces what's typically spreadsheets, emails, and phone calls, or delays to your end consumers getting them answers with real time visibility and self-service capabilities that your team can benefit from day in and day out while you monitor your operation.

It also takes decisions that are done and configured in third party systems with consultants over a long period of time to self-service configuration and rules that you can build on top of your operation while it's running at high volume and at high velocity. And finally, it replaces multiple fragmented systems you may be hopping between to see your different warehouses, your different channels, your different retail partners, and combines them into a single unified visibility tool, giving your supply chain team a new home and a new system to live in.

And so as we look at all of these capabilities that we've built at Stord, we've learned one thing firsthand, we've seen it year after year…a lot of the supply chain components out there are built equally.

You can buy a warehouse management system. You can find a fulfillment provider. You can select your own parcel carriers, but what's not made equal is how these pieces all fit together. And it's the integration and the connectivity of all these capabilities, not system connectivity, but operational connectivity in handoffs and tradeoffs.

That connectivity is what makes or breaks your end consumer experience.

And ultimately controls your costs and your profitability.

And how those are put together are not created equal. We've seen here at Stord that the only way to do it is really from the ground up building these systems in harmony. We've built purpose-built software from seeing the physical operations firsthand ourselves, embedded that software into the operations and ultimately built these puzzle pieces to fit together from ground up to make you more successful as a brand.

And I go back to something I said earlier that this is not just a theory. We're doing this in practice and one of the most exciting things for me as founder and CEO here at Stord is as we've built out this vision is watching these brands' eyes light up when they realize there's nowhere else they can get these capabilities in one. They were fragmented across different partners, different 3PLs, different integrators, different software systems, and they were left on their own as a brand to solve those challenges and constantly told it must be somebody else. It must be another one of your partners.

With Stord, they realized they're able to get all of these in one, built to drive their cost down, their end consumer experiences up, give them less headaches, and make them more efficient as a team.

We're excited by the brands we're working with today. We'd also love to speak with you. We get excited by brands who are obsessed with their end consumer experiences, who are expanding across more and more channels, and who are ultimately delivering at scale to many customers in trying to ensure a best in class experience that keeps them competitive.

If you want to out deliver your competition, we'd love to chat with you and share more about our capabilities here at story. Thank you.