Stitch_eBook_ScalabilityGuide_v3-061616

The Ultimate Guide to
ScalingYour
Retail Business

stitchlabs.com 2The Ultimate Guide to Scaling Your Retail Business | Stitch Labs
Scalable Technologies
Finding the Right Technology to Scale Your Retail Business
Managing Inventory & Operations Through Automation
Optimizing Warehouse Management
Simplifying Shipping & Fulfillment
Reporting & Finances
Managing Your Business Finances
Making Better Business Decisions with Real-Time Reporting
I.
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Retail Growth Strategies
Fueling Growth Through Multichannel Selling
Creating a Seamless Customer Experience
Developing Scalable Marketing Strategies
Expanding Your Business Through Product Development
Contents
II.
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44
III.
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61
Contents & Introduction Retail Growth Strategies Scalable Technologies Reporting & Finances

3The Ultimate Guide to Scaling Your Retail Business | Stitch Labsstitchlabs.com
Introduction
Growth is something every business continually strives toward. No matter the
magnitude of your business’ growth goals, in order to achieve them you’ll need
financial prowess, agile operational processes, winning marketing strategies,
and comprehensive data analytics.
From marketing growth strategies to scalable retail technologies and reporting,
this eBook provides modern retailers with guidance on how to implement the
right mix of proven processes, strategies, and technologies to accelerate sales,
improve profitability, and support sustainable growth.

Overview
Multichannel selling is an important growth strategy in today’s evolving retail
landscape. Since there are more channels to sell on and ways to reach
shoppers than ever before, smart retailers are taking advantage of online
selling platforms and marketplaces to acquire new customers and increase
revenue. Yet, added channels also means added complexity. To maintain
profitability and promote sustainable growth you need to strategically evaluate
and implement new sales channels.
Fueling Growth Through
Multichannel Selling
Share this chapter’s content:
On-Demand Webinar:
How To Strategically Expand into New Sales Channels

Why to Expand Into New
eCommerce Sales Channels
Multichannel selling (also known as omnichannel or cross-channel selling) is a
business strategy of utilizing more than one sales channel or method to offer
your goods or services to customers. But more sales channels means more
work and added operational complexity. So why is multichannel selling the
growth strategy of choice for most modern retailers?
Lower Barrier To Entry Than Physical Expansion
Instead of bearing the cost to open brick-and-mortar stores, today’s
eCommerce platforms leverage the speed and convenience of the Internet to
allow retailers a faster, lower risk investment path into new markets. Retailers
that are looking to expand their operations and penetrate new markets now
have access to numerous sales channels from which they can more quickly
and easily enter, test, and optimize.
Acquire New Customers
Your current and potential customers expect brands to not only offer a
seamless shopping experience, but also provide multiple paths to purchase.
Not to mention, these constantly connected customers typically have favorite
marketplaces or channels they regularly frequent for their online shopping
purposes. Leveraging customers’ built-in brand loyalty to marketplaces, like
Amazon, can be particularly beneficial. What better way to grow your business
than to actively reach these potential new customers where they’re already
shopping?
Establish New Permanent Revenue Streams
When it comes to multichannel selling, the proof is in the numbers. Stitch’s
data shows that small to medium-sized retailers who sold through a branded
eCommerce site (like Shopify, Magento, WooCommerce, or Bigcommerce)
made 38% more revenue by having a presence on a single marketplace (like
Amazon, eBay, or Etsy). And by simply adding a second marketplace, online
retailers grew their revenue by an estimated 120%.
Online Channels Revenue Gains:
Marketplaces & Branded Websites
Branded Website
Only
Branded Website
+ 1 Marketplace
% = Overall Revenue Increase
Branded Website
+ 2 Marketplace

Even without utilizing branded eCommerce sites, retailers that sold on two
marketplaces saw 190% more in revenue than those that only sold on one
marketplace. Not to mention that on average, retailers that sold on two channels
had double the revenue of retailers that sold on only a single channel.
Exploring Different Types
of Retail Sales Channels
Let’s explore some of the top online and offline commerce channels available
for businesses to sell through today.
Marketplaces
Marketplaces are eCommerce sites where retailers or third parties can post
information about their products and services, allowing the marketplace
operator to process their sales and online transactions. Since the marketplace
operator hosts, aggregates, and organizes the product information from a wide
range of sellers, they attract large numbers of online shoppers to their sites.
The top online marketplaces are:
Amazon: The largest online marketplace in the world, averaging over 188 million
user visitors per month and $88.99 billion in 2014 net sales. Amazon also offers
warehousing and fulfillment services through their popular FBA (Fulfillment By
Amazon) program, delivering over 1 billion items worldwide in 2015.
Ebay: An auction-based marketplace for C2C and B2C sellers. With an
estimated 159 million active users and 25 million sellers, eBay is a top
eCommerce marketplace.
Etsy: A marketplace for unique, hand-crafted products with 22.6 active
shoppers, 1.5 million active sellers, and $1.93 billion in 2014 annual gross
sales. Makers, craftsmen, and antique sellers tend to gravitate towards
selling on Etsy.
Alibaba: The dominant online marketplace in China, offering C2C, B2C, and
B2B eCommerce services. With 8.5 million annual active sellers, an estimated
Revenue Gains in Relation
to Number of Marketplaces
1 Marketplace 2 Marketplaces
% = Overall Revenue Increase

279 million active buyers, and 12.7 billion annual orders, Alibaba is the leading
global trade platform.
Sears Marketplace: A marketplace that allows merchants to advertise and/or
sell their products on the Sears Holdings Corporation family of websites. They
also offer warehousing and fulfillment services that are similar to Amazon FBA.
Rakuten.com: Buy.com became Rakuten.com in 2010, and now offers over 90
million products from 38,500 merchants around the world. Rakuten Ichiba’s
site follows a B2B2C (business-to-business-to-consumer) business model and
is the largest eCommerce site in Japan.
Jet.com: The newest online marketplace is Jet.com. Jet’s business model
relies on membership fees from customers, as opposed to the seller fee
model under which most marketplaces operate. Jet is currently partnered with
over 700 brands.
Branded eCommerce Platforms
Branded eCommerce platforms, also referred to as shopping carts, are
online platforms that enable retailers to create their own online stores. These
eCommerce platforms are favored by businesses since they allow retailers to
create stores that have their own branding, design, and customer lists. There
are generally two types of eCommerce shopping cart platforms: hosted and
non-hosted.
Hosted eCommerce platforms: Solutions that host and support web servers
for other companies’ sites. Meaning, your company can use a hosted platform
to build your branded website, paying them hosting fees to keep your website
up and running. The good thing about hosted platforms is they provide
technical web support in case you run into difficulties with your site. The
downside is you typically won’t have full access to your site’s source code and
might be slightly limited in the customizations you can implement.
The top hosted eCommerce platforms are:
Shopify: As the fastest growing eCommerce platform, Shopify hosts 200,000
active stores, earning about $12 billion in sales. There are a number of free
and paid site templates available to help you quickly get your store up and
running. They also offer close to 900 apps to provide additional features,
services, and plugins for your Shopify store.
Bigcommerce: Similar to Shopify, Bigcommerce has helped close to 500,000
business process $8 billion in sales. They also offer a mix of free and paid web
themes and app store integrations.
Self-hosted eCommerce platforms: Provide software solutions for businesses
to run on their own hosted systems. Meaning, your business would have to
procure and manage your own web server (or pay another company to host a
server for you), but you would be able to use the self-hosted platform’s software
to develop your website. The upside is you have more control over your

website’s code, allowing for further customization. The downside is you’ll likely
have to rely on your own technical resources in the event of technical issues.
The top self-hosted eCommerce platforms are:
Magento: The leading open source eCommerce platform, helping
approximately 26% of eCommerce businesses manage over $50 billion in
gross annual transactions. Because Magento is open source, businesses have
full control over their site’s codebase, providing for ultimate back-end and
front-end customization.
WooCommerce: With 11.9 million downloads, WooCommerce powers over
30% of all online stores. WooCommerce is part of the Automattic family and is
an extension of the most popular online publishing platform, Wordpress. The
open and self-hosted nature of this platform allows for increased development
control and customization.
Brick-and-Mortar Stores
While many brick-and-mortar businesses are taking advantage of the
economies of scale offered by online sales channels, many online businesses
are expanding into physical locations. Although eCommerce business growth
continues to out pace the growth of in-stores sales, nearly 90% of today’s total
retail sales are still generated in brick-and-mortar locations. This has led online
brands to experiment with pop-up shops and establish flagship retail locations.
Choosing the Best Sales
Channels for Your Business
When looking for new, sustainable growth channels, today’s retailers have
an overwhelming number of options. Rather than trying to be everywhere at
once, you need to establish some method to the multichannel madness. The
following steps will help you effectively assess which channels you should
consider for your business:
1. Define Your Business Growth Needs
To effectively establish what your business needs from a new channel, you’ll
need to possess a strong understanding of your products, target customers,
and business operations. How much time and how many resources are you
willing to invest in properly building out a new channel? What percentage
increase in order volume can your current operations support? How much
brand control do you require from new channels? Answering these questions
upfront will help expedite your research process.
2. Evaluate What Each Channel Has To Offer
To find the best channel(s) for your product and business goals, you’ll need to
evaluate associated costs and fees, amount of branding freedom, required time
investment, and consumers shopping habits on each. It’s also important to know
who your target customers are, what they value, and how they prefer to shop.

For example, if you have very aggressive revenue growth goals and a mass
appeal product line, you might want to be on a marketplace like Amazon as
opposed to the unique, handcrafted marketplace offered on Etsy.
3. Prioritize and Plan
Once you have a solid understanding of the available channels and have
assessed which options would fit best with your products and business goals,
it’s time to start prioritizing these channels and developing implementation
plans. While it’s important to prioritize channels based on potential revenue
impact as well as implementation time and resources, it’s also important to
consider diversification.
Just like a financial advisor would counsel you to diversify your stock portfolios
in order to minimize risk and maximize return on investment, you should build
an eCommerce portfolio of differing but complementary sales channels to
broaden your reach and maximize sales.
Implementing a Multichannel
Selling Strategy
The business methods that may have worked for your single (or even
dual) channel operation may not be sustainable as your business starts
to scale. There are three important steps you’ll have to take to make this
implementation process as easy as possible:
1. Organize Product Listings
Consistency is key when it comes to multichannel selling. The more clear and
uniform your product information is, the easier it will be to not only publish
those listings across multiple new channels but also efficiently track them
throughout each individual sales process. Make sure all the product names,
variants, SKUs, and/or barcode IDs are consistently represented in your
systems. And don’t forget to ensure you have accurate inventory counts for
each stock item (more on that later).
2. Automate and Integrate Your Operations
The logistical burden of managing multiple sales channels and business
processes can quickly lead to operational failures and unhappy customers.
These types of headaches can be avoided by automating and integrating
your operational systems. Leveraging technology to sync your inventory, sales
channels, payment systems, shipping and fulfillment, and business analytics
will give you more supply chain visibility, save employees time, and eliminate

the potential for human-error and miscalculation.
3. Adopt a Multichannel Inventory Management Software Solution
One of the most critical processes to automate and integrate across all
your sales channels is inventory control. Adopting an affordable, effective
inventory management solution can help multichannel sellers sync and
track all of their stock quantities and sales orders in one central location.
For example, Stitch Labs helps thousands of retailers transition from manual
and disparate processes to automated, real-time tracking everything
from accounting, purchase orders, and inventory counts to sales orders,
fulfillment, and reporting.

Overview
Many companies struggle to keep up with today’s complex mix of online and
offline platforms. To cut through the clutter and gain loyal customers, you must
create a seamless experience across all your sales and marketing channels.
Since your customer experience can strongly impact your bottom line, it’s
imperative to assess what’s working, where improvements should be made,
and which processes must be in place to ensure customers have a positive
experience from the time they discover your brand to the moment they
receive an order.
Creating a Seamless
Customer Experience
On-Demand Webinar:
How FabFitFun is Scaling Their Business

Signs Your Customer Experience
Needs Improvement
It’s impossible for 100% of your customers to be happy 100% of the time. While
mistakes will certainly happen, your customer feedback should overall reflect a
consistent experience. When the same mistakes occur frequently, it’s probably
time to consider making changes.
Here are a few signs your customer experience needs improvement:
• Customers repeatedly express frustration regarding the time frame
in which their questions or concerns are addressed
• Delivery dates are frequently delayed
• The wrong products are consistently being shipped
• Inaccurate inventory tracking and management regularly cause
out-of-stocks or overselling
• You have high online shopping cart abandonment rates
Building A Foundation for
Exceptional Customer Service
A positive customer experience should be at the heart of all your business
decisions. From the navigability of your site to the logistics behind your
fulfillment and shipping, there should be very minimal effort required on the
customer’s side to select and receive an item. Once you’ve established a
customer experience worth raving about, you can focus on highlighting it
through marketing efforts. But first, focus on the intricacies and systems that
work together to create a fluid, exceptional customer experience.
Navigating Your eCommerce Site
From the time a customer adds a product to their cart on your website, to the
time they receive an order, their experience with your company should be as
simple and predictable as possible.
Here are a few factors to consider when designing your brand’s website to
ensure it is as easy as possible for customers to navigate:
Shopping on your site: Global eCommerce sales are projected to exceed $1
trillion in 2016. To get a portion of those sales, shoppers need to be able to
find your site. It is imperative to invest in optimizing your website for search.
Search engine optimization (SEO) and search engine marketing (SEM) are
essential ways to drive people who are looking for products like yours to your

site. And don’t forget that website optimization extends to mobile search and
site performance as well. Today, 30% of online retail purchases take place on
mobile phones. Bottom line: If you’re not web and mobile-first, you’re behind.
Understanding buying habits: Make it as easy as possible for return customers
to make purchases. Save customers time by preserving billing and delivery
addresses as well as order history at checkout. Knowing what people want to
buy and when can help you increase email click through rates and improve
on-site conversions.
Checking out: When choosing a payment system, it’s best to go with
something reputable. You wouldn’t want to lose a customer at the very end of
their buying process because they didn’t feel comfortable entering their credit
card information on your site. Also be sure to include all costs upfront - when
shoppers abandon a cart, 56% of the time it’s because they are presented with
unexpected costs.
Shipping options: Once a customer places an order, a lot happens on your
back-end, but all they should know is when and how the correct item(s) will
arrive. Shipping options have become the norm, and customers expect to
get what they want, when they want it. Whether they want an item shipped
free (93% of customers will take action for free shipping), fast, gift wrapped or
personalized, a lot of work needs to happen behind the scenes to keep your
customers satisfied. Not all options are realistic for all companies, but test out
what works for you and implement any and all options you can accommodate.
Customer Support
U.S. businesses lose $83 billion each year due to defections and abandoned
purchases credited to poor customer experiences. To ensure your profits don’t
contribute to this statistic, your customers must feel supported, especially
when something has gone wrong.
Communicate quickly and thoughtfully: Should a customer need to
communicate an issue, make sure they can do so easily and through the
means of their choice. Whether by phone, email, or social media, customers
expect you to see their concerns and respond in a timely manner. A social
media management solution, like Hootsuite or Sprout Social, might be an
effective tool to give you visibility into what’s being said about your company
across all social channels. It can be tempting to skip the negative comments
and respond only to glowing reviews, but it’s how you respond to a customer’s
poor experience that truly impacts how they see your brand. Tactfully and
thoughtfully responding to a customer’s negative feedback shows customers
that you take service - and your brand - seriously.
Hire the right people: It should go without saying that the way you
communicate is an extension of your brand. Proveen Kapelle, a marketing
professor at Dartmouth who analyzes companies with top rated customer
service, said, “Customers get their service by interacting with the employees,
and so for the employees to provide better service, they have to take
ownership of what they are selling. If you have employees who are motivated,
who take ownership, who take pride in what they do, that translates to

customer satisfaction right away.” Hire for support and service roles with this
in mind, and make sure employees who regularly speak with customers share
your mission and can communicate it effectively.
Listen to feedback: Customers want to be heard, and incorporating their
feedback as you iterate on your products and scale your business is a way to
create a culture of loyalty. Amazon Kindle is a famous example of doing this
successfully; they went through thousands of customer reviews and continue
to create new versions of their e-reader with this feedback incorporated. Not
only do you create a product you know your customers want, but you show
them you are listening.
Set clear expectations: When you fail to meet expectations, the customer
experience crumbles. And these expectations are high. A recent Aberdeen
survey shows that elevated customer expectations are the highest source of
external pressure faced by mid-market retailers. Decide from the beginning
whether your product is intended to serve a luxury or budget purpose. From
there, be very clear and intentional with how you position your brand.
How a Positive Customer Experience
Impacts Your Bottom Line
If you don’t have customers evangelizing your brand, your customer
experience has fallen behind. Once you’ve created an experience customers
can’t get enough of, it’s time to turn that positive feedback into a way to attract
new customers.
Word of Mouth
Even in the age of connected customers, there is no marketing tactic more
effective than word of mouth. According to Nielsen, 84% of customers say they
either completely or somewhat trust recommendations from family, colleagues,
and friends about products. Unsurprisingly, these recommendations are
the highest ranking source for trustworthiness. Each experience has the
opportunity to impact many more future customers.
Social Media
Social media is imperative to how customers view and interact with your
brand. A recent Salesforce survey reported that 70% of marketers plan to
increase their spend on social and content marketing. If you’re not already
there, your competitors are. Understand what social platforms your customers
are on by using social sharing tools on your website and in emails to gain
visibility into what, when, and where customers share. Once you know where
your customers are most engaged, create and maintain a strong presence

on these platforms. “Like,” post, share, and experiment with paid ads to get in
front of your target demographic.
Content Marketing
Know who your customer is and speak to them in their language. Chubbies
Shorts, a San Francisco-based apparel brand, quickly identified their target
audience as young men seeking a fun-loving, laid-back lifestyle. Their language
never deviates from their attempt to connect with that audience, addressing
customers on their website as “Hombre, Friend, Chubstomer, Amigo,” and
writing product descriptions that start with, “Don’t even bother filling out that
PTO form.” Chubbies’ voice is unwavering in who they are targeting, which has
enabled them to grow an immensely loyal customer following and maintain a
98% customer satisfaction rate.
Create Customer Advocates
Consumer behavior is most influenced by the recommendations that come
from a person’s network. An App Data Room survey found that advocates
tell twice as many people about their purchases and are five times more
valuable than average customers. You can directly influence your bottom line
by leveraging customer advocates, and you’ll fall behind when your customer
experience isn’t worth sharing.

Overview
The Internet, social media, software innovations, and mobile devices have
changed the face of marketing. Constantly emerging new customer acquisition
channels and marketing platforms are increasingly available for retailers to
leverage for business growth. While it can be challenging to craft integrated
marketing strategies within this progressively complex environment, retailers
must develop a scalable and effective mix of marketing tools and techniques
to reach today’s connected customers.
Developing Scalable
Marketing Strategies
On-Demand Webinar:
How Chubbies Built a Winning Customer Loyalty Program

Building an
Omnichannel Brand
The lines between shopping online versus in-store are becoming increasingly
blurred, with 68% of adults checking the Internet on a smartphone while
shopping and 55% of shoppers saying they use a retailer’s mobile app while in
the store. Whether customers are checking reviews or making sure the price
listed in-store is the same as the one listed online, this purchasing experience
is the new normal. To streamline your branding efforts, you must pay attention
to each aspect of a customer’s on and offline shopping experience, ensuring
cross-channel consistency.
Building a branded website, optimizing for mobile, nurturing customers via
value-adding emails, and engaging on social media are all ways to enhance a
customer’s online experience with your business.
Branded Website
A strong brand is consistent, thoughtful, and memorable (think Apple or
Coca-Cola). A shopper on your eCommerce site or in your brick-and-mortar
store should instantly recognize an email or social media account by your
brand. Use integrated messaging to help customers move seamlessly from
search and social, through mobile or desktop versions of your site, all the way
through to purchase.
Challenges of Marketing
to the Connected Customer
• The connected customer is constantly inundated with marketing emails
and advertisements, which makes it difficult for companies or products
to stand out.
• With smartphones enabling instant research, connected customers can
easily find a similar version of your product if it’s overpriced, you don’t
have the correct size in stock, your shipping takes too long, etc.
• It can be difficult to create and maintain loyalty when you aren’t meeting
customers face-to-face.
• Customers have never had higher expectations for the experiences they
have with retail businesses.
While there are added challenges in marketing to the connected customer,
it is possible not only to cut through the noise and grab potential customers’
attention, but also to foster loyalty and gain repeat revenue. To overcome
potential barriers to growth, one of the first things you should focus on is
creating a consistent experience for your customers.

Mobile apps can help keep your company top of mind and make it easy for
a customer to place an order or communicate with your brand. A glitchy or
slow mobile app, however, might quickly get deleted, so be sure you have the
proper resources to build if you decide to go this route.
Mobile ads aren’t going anywhere - so test some paid advertising on mobile
platforms to experiment with this channel.
Email
Forty one percent of consumers in a recent survey said they would buy more
from retailers that send them personalized emails. While adding a customer’s
name is a great place to start, determining where they found you, which
product(s) they have researched, and knowing their previous order histories
are all ways to help you make an email worth reading.
Personalized emails are 6 times more effective than bulk emails at lifting
transaction rates and revenue-per-email. When customers are segmented for
more personalized offers, email open rates increased by 39%, emails were
seen as more relevant by 34% of email recipients, and unsubscribe rates
reduced by 28%.
Consider win-back emails for lapsed customers or clever abandoned
shopping cart emails to remind shoppers of the items they may have forgotten
about in their online carts.
Before you spend thousands of dollars committing to a website design, test
several iterations. A/B testing is a great way to experiment with different
designs and use data to make your final decision. While certain details may
seem insignificant, sometimes the tiniest changes have huge impacts. For
example, one mobile phone retailer increased sales by 27% after A/B testing.
Since 75% of users never scroll past the first page of search results, it is
imperative to invest in optimizing your website for search. Search engine
optimization (SEO) and search engine marketing (SEM) are important ways to
drive people who are looking for products like yours to your website. You’ve
invested in great products and a great website, so take the extra step to make
sure anyone who’s looking for what you offer will make their way to your site.
Mobile
According to a recent Chief Marketing Officer Council survey, by 2017, mobile
devices will make up 87% of the total sales of Internet-enabled technology.
Mobile purchasing is only going to become more popular, so it’s important to
lay the right foundation now.
Thirty percent of mobile shoppers abandon a transaction if the shopping
experience is not optimized for mobile; so pay attention. Things that work just
fine on a desktop might not be as successful on a customer’s mobile device.
Test and optimize your site for mobile with tools like Google’s PageSpeed
Insights, and preview and perfect responsive mobile email designs with tools
like Litmus.

Identify peak shopping hours and build staff schedules accordingly. Not planning
properly for your busiest hours creates long wait times and low bandwidth to
address customers questions or concerns.
Foot traffic means impulse purchasing. Forty-seven percent of consumers
buy on impulse in a brick-and-mortar compared with 25% of online shoppers.
Whether it’s allowing returns of digital purchases in-store or hosting events or
special promotions, try to get shoppers into your store.
Retail Growth
Strategies
Loyalty Programs
Seventy-five percent of U.S. companies with loyalty programs generate a
return on that investment. This should come as no surprise, particularly since
Forrester Research has reported one loyalty program member spends up to
13% more than two non-members.
While developing and maintaining a customer loyalty program may seem like
a daunting task, there are many different approaches to take. The following
loyalty program strategies have proven to increase engagement and drive
repeat purchases:
Social
According to Shopify, discovering products through social media and ad
targeting has increased 202% in recent years. With more platforms embracing
the ‘buy button,’ it’s easier than ever for shoppers to purchase a product
directly from their favorite social media channels.
While the social landscape is ever-changing, Pinterest is the fastest growing
social network right now, and is arguably the best place for product marketing.
With the ability to add “buy-it” buttons to your product listings, shopping (and
selling) via social has never been easier.
Online reviews matter. Positive reviews can bump up a product’s price by
9.5%, while negative reviews have an 11% chance of changing a person’s intent
to purchase.
Before you over-zealously create accounts on every social media channel
you can think of, keep in mind that effectively managing social media takes a
great amount of time and effort. If you don’t have the bandwidth to respond
to customer comments or questions on Facebook, Twitter, and Instagram,
then you probably shouldn’t create accounts for all three. It’s better to be fully
present on one social channel than sparingly post and engage on five.
In-Store (Brick-And-Mortar)
While a strong social presence is critical to attracting and maintaining customers,
your brick-and-mortar store(s) should also reflect brand consistency.

Influencer Marketing
Leveraging industry influencers to promote your brand is one of the least
expensive, most effective marketing methods. A McKinsey study found that,
“marketing-induced consumer-to-consumer word of mouth generates more
than twice the sales of paid advertising.”
To begin bolstering an influencer marketing program, retailers will typically
send free products to influencers within their industry or target audience to get
them to love their products enough to promote and recommend them to their
networks.
Influencer marketing is:
Authentic: A consumer would much rather read about your product in an
article by their favorite blogger than see it featured in a paid ad. Influencers
create buzz organically by reaching consumers when and how they want to be
reached.
Cost-effective: Not all brands are taking advantage of influencer marketing,
leaving competition (and cost) relatively low. Depending on the influencer’s
scope, they may be highly selective or simply excited for a free product. While
some influencers will charge fees on top of receiving your product for free,
in many industries, such as apparel, all it costs you is the price of sending the
product you want to promote.
Rewards points with purchase: The most common customer loyalty strategy
offers customers rewards points with every purchase or dollar spent with a
brand. The more customers spend with your company, the more rewards
points they get to put towards their next purchase, ensuring customers need
to keep coming back to your company.
Make sure your rewards points are easy to use and valuable enough that
customers will want to use them. To motivate customers to spend more in
order to receive more rewards points, retailers like Sephora have tiered
their loyalty programs, setting spending milestones to reach more exclusive
rewards.
Exclusive members-only offers and events: Everyone wants to feel like a V.I.P.,
so start giving your customers this treatment. Instead of offering rewards
points with every purchase, some retailers opt to provide loyalty members
with exclusive discounts, early access to promotional sales and items, and/or
invites to brand events. Understand what your customers value and do what
you can to provide it through your loyalty program.
Gamified customer engagement activities: Gamification is a great way to
engage customers in a way that is mutually beneficial. The most effective
consumer advocacy-building campaigns are engaging, interactive, and inspire
people to get behind your brand enough to share it with their networks. For
example, ask customers via social media to post a picture of themselves with
your product and offer gift cards, rewards points, or prizes for select winners.

2. Set up a proper tracking code methodology
Your marketing strategy is only as strong as the system you use to track it.
If you are not sure how to track the data, where to find it, or if the data is even
trustworthy, you have a problem. Find a way to create consistency among all
of your tracking links that tie back to your campaign.
3. Implement post-mortems for every campaign
It’s important that everyone on your team understands the “why” behind
your successes and failures. After a campaign is complete, gather your team
members to discuss what went well, what didn’t go well, and what needs to be
changed for the future. This is also a great time to reiterate the unit economics
of your business and help people understand the financial impact of the
marketing campaigns you run.
4. Constantly iterate
There is a reason so many technology companies have jumped onto the agile
marketing model - quick iteration means failing fast. This “fail fast” mentality
is not only applicable to the tech world. If you’re looking to improve on your
marketing efforts but don’t want to take on a big campaign, leverage tools
like Optimizely and free tool Google Analytics Content Experiments (GACE) to
quickly test if your hypothesis is correct.
Highly trackable: Provide influencers with a special promo code to use when
they talk about your product, and you’ll instantly see the effectiveness of a
social campaign. If you don’t want to discount your product, simply provide the
influencer with a trackable link to the product featured on your site.
How to Ensure
Success
The intersection of data and marketing is where the real impact happens.
Whether the goal is market expansion, testing new products, or improving
customer loyalty, developing a clear plan of how you will measure success
is critical. Here are four ways to increase the impact of every marketing
campaign you launch.
1. Hire a data operations lead or data analyst
It’s a big investment, but worth it in the long run. As you scale your business,
it’s important to recognize when your team needs to move from “generalists”
to “specialists”. If you’re at the point where your marketing coordinator is
stretching across customer service and analyzing the unit economics of your
business, (s)he is doing too much. Hire a data analyst to align clear objectives
across departments and assess them properly.

Overview
Expansion is an essential part of any solid growth strategy. While it’s important
to expand into new sales channels and scale your operations, you also need
to expand your product line to truly achieve sustainable growth. Still, many
factors can influence the decision to expand your product offerings. Timing,
customer demand, competitive landscape, and manufacturing costs are just
some of the things to consider when you’re thinking about developing new
products. With the right processes in place, however, product development is
a highly effective way to scale your business.
Expanding Your Business
Through Product Development
On-Demand Webinar:
How Powder City Drives Growth Through New Product Development

Product Expansion
Challenges
Creating new products can be exciting and rewarding, but attempting to expand
your product line before you’re ready can negatively impact your business.
Here are some challenges to consider before you start dreaming up your
newest product:
Cost of time and resources: Creating and launching a new product takes a lot
of time away from running the rest of your business. While this can definitely
be time well spent, it’s important to ensure your readiness and need for new
products before making the decision to allocate time and resources toward
product development.
Potential for cannibalization: With the excitement of new products can come a
decline in sales for older products. Keep in mind that when you launch a new
product, you’ll most likely see this decline, so prepare accordingly.
Added inventory to manage: The more you add - whether in sheer quantity of
products or in variations - the more difficult it is to manage inventory. Be sure
to have a system in place so you don’t lose loyal customers due to out-of-
stocks or overselling.
Why You Should Expand
Your Product Line
When you have the time and budget, developing new products is a great way
to increase your profits and grow your brand. Here are some key benefits of
expanding your product lines:
Reach new customers and break into new markets: Offering more products
gives your business the potential to appeal to a broader audience. When you
appeal to more prospective customers, you have the ability to sell on more
channels or in more stores.
Diversify your offerings: It’s easy for one SKU to get lost on a shelf in a sea
of similar products. A diversified product offering creates a recognizable
brand as opposed to appearing as a seller of a one-off product. Creating new
products also enables you to fill in any existing gaps in your current offerings.
Respond to customer demands: Whether you’re selling t-shirts or electronics,
novelty is what keeps customers interested. Especially if you’re seeing
multiple requests for a particular product or variant, you already have
validation it will sell.

for. While you need to consider competitive pricing and your ROI, make sure
you thoroughly assess your options before making a decision solely based
on price. Trade shows and industry recommendations are great places to start
your research. Many of Stitch’s customers recommend physically visiting any
factory or warehouse before deciding to partner with them.
Return on investment (ROI) analysis: When you think about your return
on investment, make sure you’re thinking of pricing holistically - including
overhead costs. Consider everything from shipping to employee wages to the
cost of warehouse storage and marketing the product. Only when you have
a detailed look into what the product will actually cost to make, store, and
deliver, can you get an accurate picture of your ROI.
Prototyping: Before you invest in manufacturing, packaging, and marketing
hundreds or thousands of items, consider testing several iterations on a
sample of your target audience.
Positioning Your Product
When thinking about effectively positioning your product, it’s important to know
your customer. Do they care more about brand or price? If it’s more important
to establish your brand than sell a ton of products quickly, you’ll want to start by
making fewer items and invest more heavily in your marketing strategy.
Also, think about where you want to sell your product and how it fits into the
marketplace. Where do your customers shop? If the answer is a channel or
How to Navigate the Product
Development Cycle
Once you decide it’s the right time to expand your business through
product development, there are many factors to consider. Here are some
recommendations for successfully navigating the product development cycle.
Ideation
The best place to start the new product development process is by mining
customer needs. Solicit feedback on what your customers love about your
product(s) and what they would like to see moving forward. There’s no need
to spend time and money on extra buttons or a different color pattern if
customers are perfectly satisfied with the original design. Once you have a
clear direction that is based on customer demand, identify whether or not
there are viable market opportunities for your new product. You can do this by
tracking industry trends and assessing the competitive landscape for similar
products that already exist.
Research & Development
Once you decide to move forward with your idea for a new product, it’s time to
think about the logistics that go into creating it.
Sourcing material and choosing vendors: It’s tempting to base decisions
regarding materials and vendors on price, but it’s true you get what you pay

slightly raise your prices or reduce shipping and storing costs.
Launching a Product
The best information you can get on product development comes from the
data you’ll get after you launched a new product. Although industry trends
from experts like Stitch Labs can be helpful, each business is unique and you’ll
learn best from iterating on your own process.
Customer feedback: The goal of creating a new product should be to meet
your customer’s needs based on something that was lacking from your original
product offerings. Hearing directly from the customer whether or not you
achieved this goal is invaluable. Using prototypes for customer tests and focus
groups gives you the opportunity to receive feedback in time to make changes
before you’ve invested heavily in your new product development and launch.
Promoting your product: Now that you’ve created a new product, don’t
underestimate the time and effort required to make sure it is seen by your
target audience. If you want to sell in brick-and-mortars, you might need to do
product demos or pay for promotional materials to be featured in the store.
Selling online requires different types of marketing strategies, from buying ads
or banners to sending free products to influencers. With all the time and effort
you put into developing your product, the end result is hopefully satisfied
customers and increased profitability.
store that’s new to you, evaluate what goes into selling there and make sure it
makes sense for your business.
Pricing Strategies
While assessing competitors’ pricing is a great place to start, there is a lot
more to the economics behind choosing the best price for your product. You
can always iterate on pricing, so try a few strategies out and decide what
works best for your products and business.
Focus on bestsellers: You can play a bit more with the margins on your top
sellers knowing that an extra dollar or two of profit has more potential here
than potentially making pricing changes across your entire catalog. Typically,
80% of your revenue is driven by 20% of your products. Stitch’s Product Drill-
Down report can help find which products make up your 20%.
Bundling: An especially effective pricing strategy when you’re launching a
new product. Create a special deal in which you pair your new product with a
bestseller. This introduces customers to your new product while giving them
the safety of something they already know and love.
Price adjustments: Rather than spending time price optimizing everything
you sell, focus on what’s really moving the needle. Make price adjustments to
highest selling items, as these changes will have the greatest impact. There
can be a tendency to zero in on how many products sold, even though in
some cases you can make more money by selling fewer products when you

Overview
Although great businesses are built on great products, technology is
increasingly the underlying driver of a company’s success, regardless of the
industry or marketplace. From accounting and point-of-sale (POS) systems to
inventory and fulfillment technologies, the efficacy of the solutions you invest
in has the potential to make or break your business.
Finding the Right Technology
to Scale Your Retail Business
On-Demand Webinar:
How Nomad Found the Right Tools To Automate and Scale Their Retail Business

Challenges & Benefits of Adopting
New Technology Solutions
While business owners and executives typically understand the value
technology tools can provide, the sheer number of available solutions can
quickly become overwhelming. Today’s rapid pace of innovation means that not
only are new technologies continually becoming available, but existing solutions
are also constantly improving in order to stay competitive. This growing plethora
of business technologies naturally leads to a lot of confusion around what the
best technology investments are for your business. In fact, a study by Brother
International Corporation reported that 63% of small business owners frequently
feel overwhelmed by the number of technologies available to run their business.
Signs You Need to Implement
New Business Technologies
If any of the following statements apply to your business, it’s probably time
for you to begin researching new technologies:
•• There are inconsistencies and/or inaccuracies in your accounting,
inventory, or order processing
•• You are unable to keep up with or properly track growing sales orders
•• Manual or disparate tracking processes are killing your productivity
•• You are experiencing failures and/or limitations with your current systems
•• There is a lack of interoperability between dependent systems
and processes
63%
of small business owners feel
overwhelmed with the number
of technologies available to
run their business.

Long-term Benefits of New Technology Systems
Increased efficiencies and productivity: In a business, time is money. As such,
the fundamental value new business technologies provide is saving time.
Technology solutions help to automate and simplify processes, allowing for
the same (or, ideally, a lower) level of effort to produce a much greater output.
The best technologies will continue to improve productivity and increase
efficiencies over time.
Improved ability to scale: Since the main driver of technology acquisition is the
need to accommodate or facilitate growth, newly adopted solutions enable
your business functions and processes to scale.
Gain a deeper understanding of your business: Knowledge is power. New
technologies are helping to put greater insights and more comprehensive
data at retailers’ fingertips. With a deeper understanding of your company’s
operations, you can make better informed business decisions.
Still, most small business owners (28%) are confident that implementing
new technologies is a better investment than hiring more employees. The
Brother study also revealed that 72% of small business owners indicated new
technologies would offer a bigger return on their investment than
new employees.
Biggest Barriers to Technology Adoption
Budget/financial restrictions: It goes without saying that at the end of the
day, business decisions are dollar decisions. Small and mid-sized businesses
(SMBs) typically have limited resources to work with, so your business must
be able to afford any new solutions it acquires - including implementation,
support, and maintenance costs.
Lack of technical support: It’s no small undertaking to implement new tech
systems into your critical business processes. Some systems require a tech-
savvy workforce to implement and manage not only the new systems, but also
any legacy systems that may already be in place.
Employee disruption: Many business owners and managers hesitate to seek
out new technology out of fear that its implementation will disrupt their current
processes: employees might have a hard time learning and using the new
system, current processes and integrations might breakdown, deployment
may take longer or be more complicated than originally anticipated.

Another strategic approach is to leverage the app marketplaces of the core
technologies you are currently utilizing. Since you’ll want any new technologies
to integrate with your existing platforms, this will help you create a short list
of tools that already plug into your current infrastructure. For example, if your
eCommerce site is hosted on Shopify, search through Shopify’s app store to find
top integrated technologies and partner solutions.
3. Assess the Scalability of Available Solutions
While it’s important to ensure any new technology your business adopts
checks off the majority of your requirements, no solution will be a magic bullet.
Consult your prioritized list of must-haves and nice-to-haves, making sure any
system you choose is able to automate manual processes and scale with your
business. Acquiring new technology is a significant financial investment for
your business. Do your due diligence to achieve the best return on investment
with whatever solution(s) you choose.
Your team should seek answers to the following questions to assess the
scalability of the technology options you’re evaluating:
• Are the solutions you are considering innovating at the same pace as your
company’s planned growth?
• Do these solutions integrate or plug into any of your other existing or
planned technologies?
Four Steps to Choosing
the Best Retail Solutions
1. Determine Your Business Needs
It’s not enough to know you want to improve and expand your business; you
have to know what is needed to do so. Before you begin your technology
search, compile a list of all the business needs a new solution must be able
to provide. Consult with key managers and employees to make sure all
departments’ needs are being considered. It’s important to understand that
you likely won’t be able to find a single solution that covers every requirement
on your list. However, if you’ve prioritized your requirements by necessity
and potential business impact, it will make your search and decision making
process much easier.
2. Research Available Technologies
Identify the key manager(s) and user(s) of the technology you’re looking to
adopt; this is the team that should lead your research and evaluation efforts.
They will be the most impacted by any new system that’s implemented and
stand to benefit the most by picking an effective solution. This team will
also likely have the most relevant professional networks to reach out to for
software and tooling suggestions. Beyond online searches and network
suggestions, analyst reports and trade associations are great resources for
solutions research.

• Are these systems cloud-based for increased agility, flexibility, and scalability?
• Will these systems be user friendly enough for you and your employees?
• How quickly will you be able to get this new system up and running?
4. Get Quality Technical Support
Technical support services should be a top consideration when choosing a
new software solution. Depending on the size and maturity of your business,
chances are you aren’t planning to hire a dedicated staff to support your newly
acquired systems. However, you’ll want to make sure the implementation
process goes smoothly and your existing staff knows how to effectively
operate your newest technology. Ensure the business solutions you choose
offer top-notch support including implementation, training, security, upgrades,
and troubleshooting services.
Choosing the right technology for your business can be difficult, especially
for rapidly growing companies. Not only do you not want to waste your
limited time and money adopting ineffective solutions, but implementing the
wrong solutions has the potential to actually introduce new problems into
your system. Following the steps laid out above should help to make this
overwhelming process much more approachable.

Overview
For retail businesses, one of the most critical and challenging operational
processes is inventory management. It’s no wonder poor inventory
management is one of the top ten reasons SMBs fail.
Your inventory is the heart of your business, and your operational processes
are the arteries that facilitate the flow of inventory into and out of your company,
essentially keeping your business running. Without proper management of your
inventory and operations, your company could not survive.
You may already have systems and processes in place that you believe are
working, but how manageable will those same processes be when you begin
to scale the quantity, size, and frequency of your sales and purchase orders?
How much time and how many resources could you save by automating and
upgrading your systems right now?
Managing Inventory & Operations
Through Automation
On-Demand Webinar:
Automation and Centralization:
Calming the Complexities of Inventory Management

Inventory control solutions are needed to reduce errors, guarantee accuracy,
and boost efficiencies.
Top Benefits of Centralized
Inventory Solutions
Inventory management is a constant struggle for a lot of companies, particularly
those who sell through multiple channels. It’s a difficult balancing act of always
having in-demand products on hand while also avoiding having unsold items
draining your capital and taking up space in your warehouse(s). In fact, REL has
reported top public U.S. companies have $1.1 trillion in working capital tied up in
inventory. And these are larger retailers that typically use expensive enterprise
resource planning (ERP) tools. Gartner has reported businesses pay an average
cost of 1.2% of their annual revenue for ERP solutions.
Signs You Need to Upgrade
Your Inventory System
Don’t waste valuable time and resources on under-optimized systems and
processes. If any of the following inventory inefficiencies have occurred
(or worse, are regularly occurring) with your current processes, it is time to
improve your systems.
•• Constantly running out of stock or overstocked
•• Inaccurate or unknown stock and order quantities
•• No access to real-time stock counts
•• Difficulty tracking inventory across multiple sales channels and/or warehouses
•• Inability to accurately forecast inventory needs
If your business is using manual processes to manage and track stock
quantities, you’ve likely run into most of these issues. Wasp Barcoding
has reported that 46% of SMBs either don’t track inventory or use manual
processes. While manual tracking methods may work when businesses are
just starting out, they are notoriously time consuming and prone to errors -
not to mention their fallibility rates grow exponentially as businesses scale.
$1.1 Trillion
in working
capital is tied
up in inventory

Increase efficiency and productivity: By eliminating manual processes,
reducing redundancies, and removing human error, inventory management
solutions can automate and streamline your most crucial business processes.
As your company grows, it will continue to gain productivity from new and
existing integrations with not only your sales channels but other important
business functions like accounting, payments, shipping, and fulfillment.
Save time and money: A natural byproduct of improving efficiencies and
increasing productivity is a corresponding rise in time saved. With automated
integrations and the removal of time-intensive manual processes, you and
your team will have more bandwidth to focus on other important business
tasks. Additionally, higher accuracy in your inventory tracking will ensure your
business capital won’t be tied up in unsold inventory.
4 Best Practices to Gain Control
of Your Inventory & Operations
1. Organize Your Existing Processes
It has been said that for every minute spent organizing, an hour is earned.
Start to gain clarity through the chaos by doing a thorough, physical stocktake
to know exactly what you have on-hand and where it’s currently located.
Work to categorize your inventory in whatever way is most effective for your
operational, tracking, and reporting purposes. Having well organized and
If even top companies with expensive ERP solutions are unable to effectively
control their stock, how are growing businesses supposed to tackle this
complex and crucial business function?
The answer is to adopt a fully integrated and centralized inventory
management solution that will not only support your existing multichannel
eCommerce platforms, but also help you scale intelligently.
A streamlined inventory control system will enable your company to:
Improve inventory accuracy: An inventory control solution that syncs with all
of your online and in-store sales channels while tracking incoming purchase
orders will allow you to eliminate the potential for human error, letting you
know exactly how much inventory you have on-hand at any given time. Best-
in-breed solutions will not only give you real-time stock counts, but will also
centralize all your inventory and sales data to help provide insightful business
reports and sales forecasting.
“The cost of an inventory solution like Stitch Labs
paid for itself immediately by allowing us to avoid
being out-of-stock for even just one day a month.”
Brian Hahn | Co-Founder, Nomad

operations solution that can sync all these disparate systems for you.
3. Unify Your Inventory and Operations Data
While integrating your operational systems will improve efficiencies, it will also
help you start unifying the data around your inventory and operations. Each
of your individual systems and spreadsheets contains valuable data you rely
upon to make important business decisions but when these interconnected
systems operate in isolation, that data becomes siloed. Having your key
business data and reports disseminated across disparate systems makes it
difficult to get the full picture of what’s happening in your business.
You need comprehensive business intelligence to gain a deeper
understanding of what’s working and what’s not when it comes to your
operations. Where do you need to cut inventory and operational costs? What
sales channel is generating the most revenue? Which products are selling the
best across all your sales channels? Unifying your business data will give you
easy access to these answers and allow you to develop more actionable plans
and make smarter business decisions.
4. Implement an Inventory Management System
To have the utmost confidence in your stock quantities and integrated
operations, you need a centralized inventory management solution. All the
steps discussed above - organizing your processes, integrating disparate
systems, and unifying business data - can be enabled and simplified with a
comprehensive inventory management system.
defined product information is the first step to improving inefficiencies.
2. Integrate Your Disparate Systems
Running a retail business requires managing numerous complex and
interdependent systems and processes, which each present their own unique
challenges. These inherent challenges are compounded if you are selling
across multiple sales channels and/or operating multiple warehouses.
You’re likely using disparate systems to handle all your business-critical tasks
such as purchase orders, stock quantities, invoices, shipping, and fulfillment. The
amount of time and resources it takes to separately manage, maintain, assess, and
optimize all these systems is killing your team’s productivity and holding you back
from business growth. To begin increasing efficiencies and start driving greater
productivity, you must find ways to bring your disparate systems together.
Start by evaluating all the different software and manual systems you’re using,
mapping out the interdependencies among them. Once you’ve pinpointed
where all these systems need to connect, you can begin exploring different
ways to integrate them.
Most cloud-based software programs offer plugins and integration capabilities
with other widely-used technologies. With a little bit of research on relevant
software marketplaces and app stores, you should be able to identify which of
your systems offer integrations. If few or none of your systems have existing
integrations, you should consider adopting a centralized inventory and

If any or all of these capabilities were on your list of business needs,
Stitch Labs can help. Stitch’s inventory management solution helps modern
retailers automatically track inventory, purchase orders, sales, shipping, and
fulfillment across multiple channels and warehouses, providing unparalleled
visibility into your operations and a holistic understanding of your business. It’s
this kind of comprehensive control and transparency that improves accuracy
and productivity while driving operational efficiencies.
Wouldn’t you like automated alerts for low stock quantities to avoid
disappointing customers with “sold out” messages? Or a single system to track
everything from purchase orders to sales and fulfillment data? Top inventory
control systems automatically sync with all of your eCommerce platforms and
tools, creating a single business command center to manage and analyze all
your retail operations.
How to Find the Right Inventory
Control Solution for Your Business
To avoid costly out-of-stocks and overselling while improving efficiencies
and operational visibility, you need an inventory management solution that
connects to all your retail systems and sales channels, while also consolidating
your data for comprehensive tracking and superior business intelligence.
Finding the right technologies to scale along with your business can be
challenging. You must go through the process of determining your business
needs, researching available technologies, and assessing each option for
scalability and quality technical support before making a decision. As experts
in inventory management, we’ve complied a list of features growing retailers
need to effectively manage their inventory and operations (See Chart).
Automated Inventory Tracking Multi-Warehousing
Multichannel Integration & Order Tracking Barcoding
Low Stock Alerts Fulfillment by Amazon (FBA)
Publish Listing Functionality Third-Party Logistics (3PLs)
Sales Channel Reporting Product Bundling
Sales Forecasting Drop Shipping
Shipment Tracking Predictive Analysis
Historical Order Imports & Reports Wholesale Management
Advanced NeedsStandard Needs

Retailers achieve massive time-savings across all aspects of their businesses
with Stitch, making it easier than ever for them to expand into new sales
channels and marketplaces.
The less time you spend worrying about your inventory, the more time you
can spend focusing on the things you actually want to do - like growing and
scaling your business.
With a centralized and integrated inventory solution like Stitch, you can:
• Accurately track your inventory across all your sales channels
• Avoid out-of-stocks and overselling with low stock alerts
• Boost revenue by easing expansion into new channels
• Reduce costs with proximity-based order fulfillment from multiple warehouses
• Refine purchase order efficiency
• Effectively forecast sales during peak seasons
• Anticipate when to invest more in a hot selling product
Stitch Adds Efficiency Across All Operations
% = Average Efficiency Gain with Stitch
Purchasing AccountingInventory
Management
Order
Management
Reporting
Customer Story
“Stitch is totally the central hub of our business. We built the company
around Stitch’s ability to control inventory in different warehouses and
across various channels. We’ll continue to grow into more facilities
and channels and we know Stitch will grow with us.”
Brad Westerop | Co-Founder, Bedface
A Solution That Provides Real Results:
• 100% MoM revenue increase since implementing Stitch
• 400% revenue growth expected by the end of 2016
• 28 million possible product combinations managed by Stitch

Overview
The hustle and bustle of an active warehouse is music to every retailer’s ears.
But to make sure everything continues to hum along smoothly, particularly
as your sales orders grow and your operations become more complex, you
must continually work to strategically improve efficiencies, reduce costs, and
exceed customers’ expectations.
Optimizing Warehouse
Management
On-Demand Webinar:
Scaling Multichannel Fulfillment: How to Increase Inventory Accuracy
While Improving Warehouse Efficiencies

Key Elements of Effective
Warehouse Management
Warehouse operations are notoriously labor-intensive, cost drivers for
businesses. But instead of viewing them as a necessary evil, modern retailers
are seeing their potential to maximize the value they provide.
Take commerce powerhouse, Amazon, for example. They put warehousing
on the map by taking what’s typically considered to be a retail headache and
turning it into their competitive advantage. Amazon’s world-class operational
systems are the most well-known of any company, and their warehouses are
regularly toured and reported on by top industry journalists. They’ve even
parlayed their warehousing and fulfillment expertise into an a new line of
business services, called Amazon FBA (Fulfillment by Amazon).
So what does it really mean to effectively run your warehouse operations?
Effective warehouse management should:
Minimize errors, delays, and disruptions: With the proper processes and
technologies in place, you should be able to automate and streamline warehouse
operations to avoid costly delays and reduce human and system errors.
Maximize productivity: Establishing and maintaining an efficient flow of
inbound and outbound activity throughout your warehouse will increase the
The Importance of Effective
Warehouse Management
Inventory and warehousing facilities and technologies are a substantial
investment for most retailers. The productivity and management of these
processes have implications for every other part of your business and
significantly impact your customers’ experience with your brand.
Let’s say you’ve implemented a successful marketing growth strategy that has
doubled your customer base and sales order volume. Terrific! But before you
can start celebrating your well-earned success, your warehouse team notifies
you that this new flood of sales orders has overwhelmed your current systems,
slowing fulfillment productivity and causing shipments to be delayed. And if
you aren’t yet using a multichannel inventory management solution, you’ve
likely also oversold a number of items and will be forced to inform your new
customers that the items they’ve bought are actually out-of-stock, requiring
even longer delays. If you had that experience as a first time customer, how
likely would you be to make repeat purchases from that company?
And that’s just one common scenario. There are countless other potential
business risks a company can experience from disorganized warehouse
operations: everything from packaging errors and lost or damaged
merchandise to mismarked items or even employee injury. All of these can
slow your productivity, disrupt other processes in your supply chain, and
ultimately eat away at your company’s profits.

importantly, how are they connected and reliant upon one another? Identifying
and understanding how each activity and individual task is currently working
throughout your warehouse will help you to see where inefficiencies are
occurring. Mapping out your entire warehouse value chain will serve as your
guide for optimization. This evaluation exercise should bring to light processes
that can be reworked, refined, or maybe even removed and replaced by new,
automated technologies.
2. Implement Automated and Integrated Technologies
No matter how your warehouse is set up, it’s quite stressful to manage and
process large quantities of goods. As you start to scale your business, it will
become increasingly difficult to support that growth without overworking your
warehouse team. Implementing integrated and automated technologies is the
best way to increase the overall accuracy and productivity of your warehouse
operations while improving your team’s efficiency and relieving them of
repetitive, monotonous tasks. Help unify and empower your team by giving
them the right tools to achieve success.
Since you’ve already documented all the existing tools and processes in
your warehouse operations, it should be easier to identify where integrations
and automation would be most beneficial to your business. From purchase
orders and inventory management to invoices and shipping labels, there
will be plenty of opportunities to adopt new technologies that will unburden
employees and drive efficiencies.
overall quantity of products your company can process and improve the speed
at which you can ship them to customers.
Ensure compliance and security: The phrase “safety first” is especially important
in warehouses, which require workers to operate heavy machinery. Beyond
Occupational Safety and Health Administration (OSHA) regulations, you need
to make sure you’re operating in compliance with your various supply chain
vendors and partners to prevent any unnecessary roadblocks. You’ll also want
to ensure the overall security of all your facilities to avoid things like theft.
Provide supply chain visibility: The more visibility you, your vendors, and your
logistics partners have into your receiving, packaging, labeling, and shipping
methods, the more smoothly your operations will run.
Steps to Optimize Your
Warehouse Operations
Whether you’re managing one or multiple warehouse(s), there are basic steps
you need to take and processes you must implement to ensure your facility is
always operating like a well-oiled machine.
1. Evaluate Your Operational Value Chain
What are all the steps in your current warehouse system, and, more

this process even more efficient.
In order to support your growing business, implement tools that will
help improve the productivity of your team. Inventory management and
multichannel selling software, like the Stitch Labs platform, enables retailers
and wholesalers to manage invoices, purchase orders, inventory quantities,
and sales order data in one application. This centralizes information and keeps
teams on the same page, which saves you time and money.
3. Analyze Warehouse Performance
You can’t manage what you can’t measure. Once you’ve defined and
implemented all these new processes and technologies, you’ll want to
measure and track their progress to make certain they’re actually improving
the productivity of your warehouse. While every business is going to value
metrics differently based on their industry and goals, there are a few key
warehouse performance metrics businesses should actively monitor:
Order fill rate: The number of items ordered versus the number of items
shipped. You want to make sure you’re fulfilling as many orders as quickly
and accurately as possible to help guarantee customer satisfaction. Top
businesses have a fill rate of 98% or higher.
Order picking accuracy: The percentage of orders picked without errors from
either choosing the wrong product or quantity. Best in class businesses have
98% order picking accuracy or higher.
Inventory management software: Since inventory is at the core of every
warehouse operation, the most critical technology needed is a comprehensive
inventory management software. Manual processes are error-prone and not
scalable. Fully integrated inventory control systems are required to not only
push the right stock quantities out to your sales channels, but to also integrate
all your other solutions and track your end-to-end retail processes.
Warehouse automation systems: Automated warehouse systems utilize
conveyor belts and sortation and retrieval technologies to streamline sorting,
routing, and packing processes throughout your facility. To aid in the efficiency
and interoperability of these systems, you must integrate them with your other
crucial warehouse technologies like inventory, barcoding, label printing, and
shipping solutions.
Barcoding solutions: You can make your warehouse employees more
productive while gaining greater visibility into your warehouse activity and
increasing the value and accuracy of your inventory systems by utilizing
barcoding technology. Barcode scanning can be used through every step
of your warehouse operations, helping to ensure the right products are
received, stored, picked, packed, and shipped to the right people in the most
timely fashion. Barcode scanning technology is also useful for performing
regular stock takes by allowing workers to quickly scan all the items in a box,
counting what should be in the box and identifying items that might have
been mistakenly placed in the wrong box. Top inventory management and
warehouse automation solutions will integrate with barcoding systems to make

How Stitch Helps Optimize Your Warehouse for Maximum Efficiency
These are just a few of the warehousing benefits retailers get with a
solution like Stitch:
Automatic overflow system: Stitch can anticipate when you’re running low on
specific items. If an order comes in and you need a backup warehouse to pull
from, we’ll reroute the order to a secondary warehouse automatically.
Transfer orders: Want to shift stock to a different warehouse? Stitch’s transfer
order feature allows you to move stock to another warehouse whenever
needed. And we’ll keep a record of this activity for your historical records.
3PL integrations: If you’re taking advantage of third party logistics (3PL)
providers like Amazon FBA, Shipwire, DCL, or AMS, we’ll directly integrate with
their solution so you can assign a warehouse in Stitch to keep track of your
3PL-specific inventory.
Drop shipping: Don’t let fulfillment of stock hold you back when expanding
your product line. Drop shipping is a great option for businesses looking to
grow inventory but are short on up-front cash or space to hold the products.
On-time shipment to customer: The percentage of orders that shipped by the
requested or defined date. If your customers are always getting late deliveries
from you, it will reduce the likelihood of them becoming repeat customers as
well as damage your reputation. Best in breed companies maintain 97% or
higher on-time shipment rates.
Warehouse capacity: You have to be aware of how much product your
warehouse can hold at any given time. This is particularly important during
peak seasons. Top businesses have over 95% of their storage space filled
with products during peak seasons and an average of 91% warehouse
capacity overall.
If your business has a solid understanding of these warehouse metrics, you’ll
be better able to judge your overall productivity. But performance metrics
aren’t as helpful if they’re spread across multiple systems and spreadsheets.
The most effective businesses integrate all their most important metrics into
a single, comprehensive dashboard. This allows them to get the full picture
of not only how their warehouse operations are functioning, but also how
other business processes, like purchasing and shipping, are affecting their
warehouse performance.
One way thousands of small and mid-sized retailers are tracking their
inventory, optimizing their warehouses, and unifying their data is by using
Stitch Labs’ powerful inventory management software solution.

Overview
While eCommerce customers enjoy the convenience of shopping from
anywhere at any time, they don’t have the instant gratification of in-store
purchases. To offset this trade off, online retailers must provide customers with
timely shipping and delivery.
Not only do your shipping and fulfillment processes have to be fast, accurate,
and efficient, but there also must be constant communication with the customer
from the point of purchase through delivery. While this is no small task, there are
various shipping and fulfillment options available to retailers of all sizes.
Simplifying Shipping
& Fulfillment
Case Study:
How Comfortable Club Streamlines Fulfillment With Stitch Labs

• As volume grows, it tends to magnify any operational issues. Inventory
discrepancies, damages, and out of stock items are typically the first
issues to pop up.
• The demand for permanent and temporary warehouse workers is at
an all time high.
Section Sponsored by Shipwire
Strategies for
Fulfillment Success
One key differentiator between best-in-class eCommerce players and those
that fall behind is their attention to detail with their fulfillment strategy.
A good way to benchmark where your business operations currently stand is
to ask yourself the following questions:
• Do you have a role in your organization focused solely on eCommerce
fulfillment, or a dedicated partner that handles it on your behalf?
• Do you ship from multiple locations - either fulfillment centers or retail stores?
Section Sponsored by Shipwire
The Importance of Effective
Shipping & Fulfillment
The fulfillment experience you provide as a retailer is one of the main reasons
a customer will or will not shop with you again. The best customer service, the
greatest web design, and the most optimized shopping cart flow will all be
quickly forgotten by a customer if the product they ordered takes longer than
expected to arrive, or even worse, is damaged or incorrect. Even the largest
eCommerce businesses must tackle major delivery and shipping challenges.
Customers have high expectations:
• Most expect to receive all their orders within two days - and for free.
That’s costly to setup and maintain.
• They believe both delivery and returns should be free.
• They want options for how, when, and where their products are shipped.
Scaling your fulfillment operations is difficult:
• It is difficult to build a fulfillment operation that is profitable during low sales
periods, but can scale to support the demands of peak seasons like holiday.

Third Party Logistics (3PLs)
Over the years, 3PLs have played various roles with retailers, from a seasonal
relationship for help with peak volumes to a fully outsourced logistics operation
handling every order that flows through their business.
There are many ways emerging and established retailers can benefit from
a 3PL partnership:
• Provide additional capacity for peak holiday volume or seasonal
product staging.
• Reduce delivery times and costs by locating inventory strategically
across the country, getting it closer to your customers.
• Enable international expansion by testing products in new countries
and markets.
Besides complementing your existing logistics infrastructure, a good 3PL
should also be a competitive differentiator for your business, by offering
services like:
• Logistics industry expertise and advice in the way of strategic account
management, network optimization, and cost saving analysis.
• Do you know the average time it takes from order submission to delivery
confirmation?
• Do you know your order accuracy rates (were the correct items shipped)?
If you answered “no” to one or more of the questions above, you have a lot of
opportunity in front of you.
So, where do you start? While it’s common for companies to have two different
systems in place to handle order management and control inventory levels, it’s
important to have constant visibility into both processes. Integrating your order
and inventory management systems can help you form a single source of truth
for real-time status updates on purchase orders, stock quantities, sales orders,
shipping, and fulfillment.
You need to be able to create, track, cancel, or modify orders quickly and
easily. With solutions like Shipwire’s order fulfillment platform you can do just
that while providing real-time analytics and alerts for elements like delivery
tracking and order status updates.
Inventory needs to be accurate as well as synced across all the moving parts
in your multichannel ecosystem. Software solutions, like Stitch Labs, centralize
your inventory into a single location, allowing you to control how much stock is
available on each sales channel.

orders. Pick all your products, pack them, and add the shipping label.
Are you struggling to keep track of orders and shipments? The faster orders
come in, the more difficult it is to keep track of what needs to be picked and
packed, which sales channel the order came from, what needs priority vs
standard shipping, etc. Shipping software helps categorize orders by sales
channel, priority, and even by item. These solutions help you figure out the
best workflow for fulfilling and shipping.
Are you constantly rate hunting? Retail postage prices are very high. If you
use a shipping solution, not only can you quickly find the best rate for your
business, but you can also print labels and schedule carrier pick-ups to save
time and money.
What Features Matter in a Shipping Software Solution?
The main purpose behind shipping software, like ShipStation, is to simplify the
shipping process by streamlining tasks like order aggregation, file imports,
and customer notification. But which features are non-negotiable in a shipping
software?
Integrations: Wherever you sell, whether on your own site, an online
marketplace, or a brick-and-mortar store, organizing orders isn’t easy. A great
shipping software, however, will integrate with dozens of sales channels and
carriers, covering your current integrations while also providing flexibility when
the time comes to expand.
• A consolidated view of business intelligence across all sales channels
for data like shipping costs, tracking information, and fulfillment key
performance indicators (KPIs).
• Connections to suppliers and manufacturers that could serve as potential
drop ship vendors
Section Sponsored by ShipStation
Shipping Software
Solutions
When you consider the operational logistics of fulfillment - picking items,
building boxes, packing orders, and getting them shipped - online selling can
feel exhausting, time consuming, and frustrating. Shipping software solutions
alleviate some of the stress involved with actually fulfilling orders so you and
your team can focus on effectively running your business.
If you answer ‘yes’ to any of these questions, it’s time to find a software solution:
Are you handing orders one by one? Working on a single order from start to
finish and repeating that process until your orders are complete is working
harder, not smarter (it’s working longer, too). Take heed of the assembly line:
it’s easier and quicker to take one action and complete it en masse for all your

Drop Shipping
Another fulfillment option for growing retailers is drop shipping. With this
shipping method, drop shipping suppliers deliver your products directly from
the wholesaler to the customer and charge you for the item once it’s shipped.
You never have to keep the products you’re selling on-hand in your facilities.
The main advantages of using drop shipping are:
Low financial investment: You don’t need to purchase and hold your business’
inventory, which greatly reduces your upfront costs. By avoiding having your
company’s capital tied up in inventory, you can use those funds for other
important functions like marketing and advertising.
No warehouse costs: Since you won’t be storing your inventory, there is no
need to own or rent warehousing facilities - or staff workers to run them.
Broader product selection: Because you’re not purchasing your inventory in
advance to have it in stock, drop shipping enables you to offer a more diverse
selection of products to your customers.
Geographical freedom: Without the need for a physical warehouse location,
you’ll have the freedom to operate from anywhere across the globe.
Scalability: Drop shipping takes the heavy burden of owning, operating, and
managing a shipping and fulfillment center off your hands. Therefore, it will be
Customizable workflow: You work in a particular way and your shipping
software should, too. Your shipping solution ought to let you filter, search, and
customize views in a way that won’t disrupt your workflow. Settings that can be
saved and applied to multiple orders at once - or that apply on order import -
are valuable time-savers.
Batches and bulk: Batching enables you to process hundreds of orders and
print their accompanying labels with just a couple of clicks. Bulk actions will
drastically reduce the time you spend applying shipping services and weights,
etc., to orders. The more actions available en masse, the better.
Automated tracking: Look for a software solution that automatically sends
tracking information to both you and your customer. A customized, branded
shipping notification email is best - especially if the software delays sending
the message until the package actually hits the mail stream.
Opportunity for growth: Whichever shipping software you choose should be
able to grow with your business, and needs features that will help facilitate that
growth. The last thing you want to do is spend time getting to know a system
and build a workflow around it, only to outgrow it.
Before you commit to a shipping software, make sure it’s compatible with your
current workflow. Sign up for free trials, connect your stores, and ship some
orders. Getting hands-on experience with different softwares will allow you to
make an informed decision.

Choosing a
Shipping Strategy
Outside of product pricing, one of the most difficult tasks for retailers is
determining how to handle shipping rates. Charging customers too much can
make you less competitive in the market, but charging too little can eat into
your profits.
One major factor in an online shopper’s buying decision is the shipping
options they’re given and the fees they’re going to be charged. Forrester has
reported 44% of online customers abandon their shopping carts because of
high shipping costs - something every retailer wants to avoid.
With this in mind, the following are top eCommerce shipping options and the
pros and cons of each:
Free Shipping & Flat Rate
With free shipping, all orders are delivered free of charge to the customer
(we’ll dive into more details below). With flat rate shipping, all orders have the
same shipping rate regardless of the product or order size.
• Pro: No unexpected spikes in shipping costs for your customers - what
you see is what you’re charged.
• Con: You’ll need to calculate out your average shipping cost per order.
your drop shipping supplier’s job to manage any influx of orders your growing
business receives.
While this all sounds like music to many retailers’ ears, there are a few other
factors to consider:
Profit margins are dependent on the products you sell. Since drop shippers
typically bill businesses based on the products they ship, the larger, heavier,
and more expensive your products are, the thinner your profit margins will be.
Conversely, smaller and cheaper items will offer you higher profit margins.
Sourcing products from multiple warehouses complicates inventory tracking.
While it’s a plus that drop shipping allows you to easily source a wide-range of
products from various suppliers, fulfilling many different products from multiple
warehouses can quickly cause inventory tracking issues. To curb these
complications, you’ll need to sync your inventory management systems with
your drop shipping suppliers.
Potential for drop shipping supplier failures. Any time you outsource a
business function, you run the risk of that vendor or supplier’s errors costing
your business or harming your other processes and/or reputation. Any
mistakes your drop shipper make can create a negative customer experience
that will ultimately reflect poorly on your business.

Section Sponsored by ShipStation
Free Shipping
Strategies
Free is a price everybody loves. Offering - and advertising - free shipping can
increase your average order, build brand loyalty, and help differentiate you
from competitors that are still charging for shipping. Plus, offering free shipping
has been proven to reduce shopping cart abandonment rates and increase
revenue by up to 10%.
But there’s no such thing as a free shipping label, so how can you make free
shipping work for your business?
Free shipping promo: If you’re apprehensive about free shipping, or want to
see whether or not it makes a difference, offer it as a promotion. Maybe it’s for
a holiday or a weekend, or your business is celebrating an anniversary. Run it
for a limited time and analyze how well the promo period does compared to a
non-promo periods.
Free shipping with minimum spend: If running a promotion or offering free
shipping full time is too much of a strain, set a threshold. Don’t make the
mistake of setting the threshold too high, though. A good rule of thumb is to
figure out your average order size and make the minimum threshold 10 or 15
percent higher. That way, you encourage your customers to increase their
Weight-Based Shipping
Shipping fees are dependent on the weight of the products being delivered.
• Pros: You can set specific price ranges for weight tiers that make sense for
your products.
• Cons: If you sell heavier items, you’ll also be passing along hefty shipping
fees to customers that could cause a spike in shopping cart abandonment
rates. Therefore, this strategy is better suited to companies selling lighter
weight goods.
Calculated Shipping Rates
Most shipping carriers (like USPS, UPS, and FedEX) offer real-time rate
calculators that determine shipping costs based on multiple factors like order
size, weight, delivery location, and speed of delivery.
• Pros: You can curb your costs, particularly on heavy and/or international
shipments which are typically more expensive. Also, customers know they
are paying for exactly what they order, no more or less.
• Cons: Although the costs are customized per customer, you’re still passing
fees along to customers.

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