1. www.labusinessjournal.com
Volume 37, Number 12 T H E C O M M U N I T Y O F B U S I N E S S TM March 23 - 29, 2015
By SUBRINA HUDSON Staff Reporter
J
OHN Tomich recently walked into a retail
store hoping to replace the ripped suit
jacket he purchased through the store’s
website last year. But the sales associate
couldn’t find any information about his pur-
chase history.
Without the jacket in hand, the associate
didn’t know which garment Tomich wanted to
replace and whether the store had it in stock.
That’s the kind of headache Tomich, chief
executive of e-commerce services company
Onestop Internet in Rancho Dominguez,
wants to help his clients avoid. The company
has lately been developing technology that
will link a retailer’s online business with its
brick-and-mortar stores – the basic definition
of retail’s latest buzzword, “omnichannel.”
“It’s an overused cliché,” Tomich said.
“But we’re investing in the technology to be
able to do that. We listened to our clients and
that’s what they’re asking for.”
Onestop got its start helping brands man-
age their e-commerce operations, from fulfill-
ment services to web design. But as brands
manage more of their online business them-
selves, Onestop is trying to hold on to clients
by expanding its business into developing om-
nichannel software for its clients.
The idea is to make shopping, both in store
and online, more convenient for shoppers by
helping retailers see all of their inventory –
whether in an e-commerce warehouse or a re-
tail store – in one place and keep track of what
a customer has purchased over time.
Take Tomich and his suit jacket: Because
the retailer didn’t know what he was trying to
replace, Tomich had to retrieve the torn item
and return to the store – an inconvenience he
said could cost the retailer a sale.
“I had no choice,” Tomich said. “I had to
get the jacket for the suit so I had to go back
home. That could make somebody else not
come back.”
But retailers are hoping to offer more than
Onestop Internettracks shops’items
online,instores
RINGOH.W.CHIU/LABJ
Shelf Life: CEO John Tomich at Onestop Internet’s warehouse in Rancho Dominguez.
Taking Stock
a convenient shopping experience. They also
want to know what customers are buying,
whether in stores or online, so they can better
target their marketing efforts and ultimately
get customers to buy more items.
Tom Julian, director of strategic business
development for consulting firm Doneger
Group in New York, said it’s almost mandatory
for retailers to look at the online and brick-and-
mortar businesses as one. After all, customers
no longer differentiate between the two.
“Whatever online store I’m shopping at or
whatever brick-and-mortar I’m shopping at,
they should somehow be aligned and con-
nected for me,” Julian said. “Most marketing
executives today have put a mandate forward
that in order to grow the business, the brick-
and-mortar and online should live together.”
One bill
Onestop, was co-founded in downtown Los
Angeles in 2004 by Tomich; Steve Tandberg,
the company’s chief culture officer; and for-
mer Chief Innovation Officer Brett Morrison.
The 250-employee company moved to its new
headquarters, a Rancho Dominguez ware-
house, about six months ago and has addi-
tional offices in Santa Monica and New York.
When the company started out, many fash-
ion brands in particular were focused on whole-
saling their products to major retailers and had
little interest in selling online themselves.
Tomich said he had to convince brands it would
be worth it to sell products themselves.
“Manufacturers were worried that if they
sold direct to a consumer it was going to by-
pass or conflict with the stores that were buy-
ing wholesale,” he said.
The firm’s first client was Corona brand
Von Dutch, famous for its trucker hats.
Initially, Onestop would help clients with
every facet of running an e-commerce busi-
ness, from designing a brand’s online store to
photographing products.
When a customer placed an order through
Von Dutch’s website, it would be received di-
rectly by Onestop. Workers would pull the
merchandise from Onestop’s warehouse, pack-
age it in Von Dutch-branded packaging, then
ship the merchandise off to the customer –
who had every reason to believe it was coming
straight from Von Dutch. When customers
called the Von Dutch customer service number
for help with an order, they would actually be
speaking to a Onestop employee.
But as retailers got more comfortable with
selling online, they started wanting to manage
more of their e-commerce business them-
selves.
Onestop initially offered its services on an
all-or-nothing basis, Tomich said, requiring
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2. customers to hand over all of their e-com-
merce operations and pay for the entire suite
of its services. A few years ago, though, the
company started offering services a la carte,
and now most of the firm’s 40 clients get
about half of its services, such as order fulfill-
ment and customer service.
Despite that, Onestop has grown. The com-
pany brought in $51 million in revenue last
year, up from $37 million the year before,
Tomich said.
À la carte
But as clients started using fewer services,
Onestop shifted some of its focus to develop-
ing omnichannel software, something clients
had been requesting. In late 2013, Onestop re-
leased a program to help clients track inven-
tory across multiple locations.
Additions to the program now allow retail-
ers to offer in-store pickup for online orders
and for retail stores to fulfill online orders if an
item is out of stock at the e-commerce ware-
house.
The next step, which Onestop’s Santa
Monica technology team is working on, is de-
veloping a system to let retailers track and
store customer purchase information, includ-
ing purchases made online and in stores.
Many national retailers such as Seattle’s
Nordstrom Inc. already have systems that do
all of this, but it’s new territory for the smaller
brands and retailers that Onestop works with.
Many clients have just a handful of stores.
But just like big retailers, these small
brands see lots of value in not only tracking
their inventory, but figuring out what a repeat
customer is buying – and perhaps predicting
what they might want to buy next.
Take the example of Tomich and his torn
suit jacket: “The sales clerk should not only be
able to identify the exact size and style of the
suit I bought online so I could purchase a re-
placement, but also recommend additional
items that would go with my suit based on my
purchase history and current trends,” Tomich
said.
Doneger’s Julian said that’s one goal of
omnichannel systems.
He cited luxury retailer Burberry’s flag-
ship store on Rodeo Drive, which opened last
year, as an example. Associates at the store
carry iPads that are used to offer personalized
recommendations based on customers’ previ-
ous purchases – regardless of whether they
were made online or at a store – and to place
online orders for items not stocked in stores.
“It’s a seamless, all-knowing sensibility,”
Julian said.
Retail: Firm Keeps Track of Virtual, Real Racks
Boxed Up: Onestop Internet Chief Executive John Tomich at the e-commerce company’s warehouse in Rancho Dominguez.
RINGO H.W. CHIU/LABJ
‘Most marketing executives today have put a mandate forward that in order to grow the
business, the brick-and-mortar and online should live together.’
tom julian, Doneger Group
2 LOS ANGELES BUSINESS JOURNAL MARCH 23, 2015
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