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ChannelAdvisor CEO: World's shift to online retail boosts bottom line

E-Commerce

Aug, 4 2017, 7:57 AM

Since taking over as CEO of ecommerce service provider ChannelAdvisor two years ago, David Spitz has focused more of the company's attention on bigger customers - including the granddaddy of all in online, Amazon. The results continue to pay off as the world moves to embrace the Internet for even more buying.

"Working with Amazon is inevitable," Spitz says. And ChannelAdvisor benefits from offering its customers ways to benefit. he says.

In a conference call to discuss ChannelAdvisor's most recent earnings on Thursday, Spitz spoke at length about how working with Amazon as well as Wal-Mart is helping drive revenue. While ChannelAdvisor reported a loss, its revenues were up 11 percent year-over-year.

"[Amazon and Jet] continue to be growth channels for us. It is good differentiator for us because we're really I think seen as the cream of the crop in terms of integrating with marketplaces in general and obviously Wal-Mart and Jet are really interesting ones for a variety of customers," Spitz explained/

"Interestingly we do see a little bit of a diversification or maybe bifurcation is a better word. For example, brands tend to be attracted to the Jet platform from a marketplace perspective and Wal-Mart is more traditional resellers. So but they continue to be attraction points for us as a platform. I didn't provide any numbers on the call, but they do continue to perform strongly for us."

But Amazon is the big driver.

"Well, I would say Amazon continues to be a dominant force out there in the market," Spitz said in response to a question.

"I think that's pretty well publicized. And at the scale and sampling of the customers that we have, I think our results tend to reflect that as well, so I would say that Amazon continues to grow pretty, pretty nicely."

Overall, the shift to ecommerce continues, Spitz said.

Shifting online

"Given some of the well documented weaknesses in the overall retail sector, our strategy of offering solutions to brands seeking to establish and optimize their ecommerce strategies have seen success as the market shifts. I personally traveled extensively this year speaking with a number of brands from fashion brands to tire manufacturers and three trends stand out. [Retailers] all recognize that working with Amazon is inevitable and are seeking a holistic Amazon strategy," Spitz explained.

"Second, they are reallocating ad spend towards Amazon and in some cases aggressively. And third, they need help with fulfillment as the on demand nature of e-commerce forces everyone to evolve from shipping pallets by the truckload to shipping individual orders to consumers and I'm thrilled because ChannelAdvisor is the only platform on the market that can address those needs globally."

Spitz noted that ChannelAdvisor's ecommerce platform helps retailers from advertising to fulfillment. And the Triangle-based company does so globally through its ever-growing footprint. ChannelAdvisor recently decided to open a new R&D office in Spain, and in China Spitz pointed out that growth is exceeding expectations.

"From first party to dropped shipment, third party selling, the advertising and fulfillment and from the U.S. to Europe and China to Latin America, if you are a brand, ChannelAdvisor can be your full stack solution for Amazon worldwide," he said, practically giving a sales pitch to Wall Street analysts.

"This is why customers choose us, because they know we are a comprehensive global solution that can be their strategy growth partner for years to come."

Logistics, logistics

Spitz pointed out as well that ChannelAdvisor strengthened its increasingly important logistics offerings through the recent acquisition of HubLogix.

"HubLogix does for fulfillment what ChannelAdvisor does for demand," he explained. "They make it easy to connect to multiple fulfillment partners and intelligently route orders in real time to optimize cost, speed and efficiency and have built a network of over 150 fulfillment partners."

Asked about benefits of the HubLogix deal by an analyst, Spitz stressed: "[W]e continue to invest in building up the retail network. We do support a number of retailers today and I think HubLogix plays nicely into that strategy as well by allowing us to attach to a number of third party settlement providers to help our customers who need drop shipping solutions."

Read the full text of the conference call at:

https://seekingalpha.com/article/4094624-channeladvisors-ecom-ceo-david-spitz-q2-2017-results-earnings-call-transcript?part=single





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