In September 2012, a cloud-based customer, sales and inventory management tool for small retailers was launched in a public beta. Its creators, one of whom was once a small fashion retailer himself, had set their sights on developing a backend systems that would be cost-effective for small and medium enterprises (SMEs).
Built for SMEs that want to move off spreadsheets but can’t afford enterprise solutions, the Trade Gecko platform was spotted by investors at the JFDI-Innov8 2012 Bootcamp Asia four months earlier. By December of that year, investors include WaveMaker Labs, Golden Gate Ventures, and the Singapore National Research Foundation.
“Running my clothing label was exciting and I enjoyed it a lot. But we grew very fast and the amount of administration quickly overwhelmed us,” said Carl Thompson, who founded the company with brothers Cameron and Bradley Priest. “I couldn’t find a solution to pull it all together. Spreadsheets and manual data processing turned into an absolute nightmare.”
Taking this business lesson to heart, the trio built a system that aims to take away the pain points of business administration – from invoicing to inventory to sales management to customer analytics – and make it more user friendly in a social and engaging way.
"Today, because of the iPhone, people are used to having things that are fun to work. Software has made life easier," Cameron Priest, now CEO of the company, told a forum for SMEs organized by New Leaf Ventures in Manila.
The nightmare that Thompson experienced managing a fashion label has been put to good use to create a solution that has since helped many retailers in Singapore and New Zealand evade the same nightmare.
Naturally, Philippine retailers were drawn to the idea of eventually moving off from using spreadsheets to a more high-tech way of managing a business, minus the cost of a full-scale enterprise solution.
Pricing matters
Because it is being offered as a Software-as-a-Service (SaaS), the price for a basic subscription at USD39 per month (or PHP1,600 for Philippine retailers) is attractive enough to gain attention.
Priest explained that the basic package includes free setup and training for 3 users, 1,000 SKUs, unlimited orders and integration with Shopify and Xero Accounting. As the business grows, one can easily top up the package with many other tools for inventory management, sales orders, stock control, supply chain management and business intelligence and reports.
Even its business premium package of USD299 per month, which can serve up to 20 users, unlimited product SKUs, unlimited orders, integration with Shopify and Zero as well as online ordering add-on, multi-warehouse and multi-currency features, is still cost-effective enough.
One of Trade Gecko’s customers in New Zealand is children’s clothing retailer Mavis and Osborn. Founder and director Tamzin Hawkins said in a video on the Trade Gecko website, that managing the stock and inventory, invoices, customer relations while struggling to grow the business was a huge challenge.
“I have quite a few sales channels and so I was working off spreadsheets trying to deal with sales orders coming through my PayPal and my Facebook, not to mention from retailers who stock my products. I was having to go through everything manually and deal with the different sales channels individually, which was so time consuming,” she said in a testimonial in the Trade Gecko website. She says she now manages everything from TradeGecko and has all information in one place.
In the Philippines, Trade Gecko’s first customer is Coffee Bean and Tea Leaf, which has 57 stores nationwide and growing. While not exactly a small business anymore, the coffee chain is happy with the shift in its business processes from paper-based to cloud-based.
"Before Trade Gecko, a lot of our processes are paper based. If it goes to our different stores, there are chains it will get lost. It is really costly to make people run around to do all these things. One major advantage of the system is you get to free the time of your managers. Instead of making them sign papers and visit different stores, they can focus on their core competencies instead of doing all these manual things," said Jeffrey Dayrit, IT Manager, Coffee Bean and Tea Leaf.
The coffee chain started to integrate the system six months ago and is still in the process of integrating more features with its point of sale (POS), enterprise resource planning (ERP), and camera system.
Central view of the operations
"The fact that we get a central view of what is going in instead of calling our district managers and having to get all of these paper is a good thing. In the past, before we get to paint the story of what is going on it will take us hours to get the reports. Nowadays, we just look at the dashboard," Dayrit said.
Priest explained that real-time sales and inventory data enables retailers to purchase what they need when they need it, thereby reducing the cost of too much stock. It also provides actionable insights that are important in other areas such as mitigating retail fraud.
One of the concerns raised in the forum is the huge problem of pilferage. The Trade Gecko executive said goods need to be tracked, and one of the demands of retailers is a good system in place to know the movement of goods in the store shelves so they’ll know what to prioritize. Additionally, it can also be a good monitoring system.
"If you know what you should have in your shelves in real time, that would be a lot easier to manage – what’s there and what’s not. You need to be aware of what’s in your shelves all the time," he said.
Security concerns
Most retailers have concerns about security of data in the cloud. "When you talk about the cloud, that is always the buzzword," Dayrit affirmed. "As IT head I’d rather trust an enterprise grade service than my own. For an operation like Coffee Bean and Tea Leaf, you wouldn’t probably think that we maintain 12 servers. It is expensive, we need to provide cooling 24 x 7, we need to ensure there is power and Internet redundancy. Getting software as a service, I also get my core competency in order, which is to drive innovation," he explained.
Another concern raised in the forum is the possibility of outgrowing the system. As SMEs grow to become large enterprises, which everybody is hoping for, would they eventually need to migrate to a full-scale enterprise solution?
Priest said at Trade Gecko, they are striving to innovate and grow faster than their customers so when the time comes for them to need large enterprise solutions, they are ready to offer customers the solution that they need.
Dayrit himself attests that even if Coffee Bean and Tea Leaf achieves its growth target of growing to 100 to 150 stores, there wouldn’t be any difference. "We planned out that if we grow the business really big, it’s still going to work for us," he said.
Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.