The billion-dollar battle of outdoor B2B platforms
As the world gets used to doing more business online, B2B e-commerce providers are sparring for market leadership in the outdoor industry. Dozens of brands have yet to adopt a technology. Welcome to open season.
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In Cody, Wyoming, there’s a little gear shop called Sunlight Sports that sits right at the center of town—loved and frequented by locals since 1971. It houses about 8,000 square feet of retail space but feels even cozier than that, a neighborhood shop by any definition.
It’s the kind of place where, browsing the aisles and picking through the gear, you might find yourself thinking, “Hell, I could run an outdoor store. How hard could it be?”
Air that thought to owner Wes Allen and he may chuckle as he walks you to the shop computer. There on the desktop, he keeps an Excel document that has gained almost mythic status among some members of the outdoor retail community. He might even pat you sympathetically on the shoulder as he opens the file, watching your jaw drop.
The document is a list of passwords—111 of them—each corresponding to a different B2B wholesale portal Allen uses to place inventory orders with brands. Somehow, in the year 2021, it requires more than nine dozen B2Bs to run a single gear shop in the middle of Wyoming.
In our industry, the absurdity of that predicament isn’t an anomaly. It’s the standard.
“Wes’s list represents something fairly common,” says Rich Hill, executive director at Grassroots Outdoor Alliance, the nation’s largest association of independent outdoor retailers. “Obviously, something is very wrong here.”
If you don’t work in retail, it’s possible you’ve never interacted with a B2B, but it’s not hard to picture how they operate. You find the products you want to order for your store, key in some details, and click “buy.” The business model is equally simple. In general, brands pay to use these systems, while retailers access them for free. Much like the fantasy of running a gear shop, though, it’s a lot more complicated under the hood.
Right now, there’s a race going on in the outdoor industry. B2Bs are still in their infancy, but it’s obvious—as Allen’s 111 passwords prove—that they’re widely used and will factor critically into the future of outdoor retail. The market now is chaotic. You have small, boutique B2B companies serving a brand here and a brand there. You have massive platforms, funded by multimillion-dollar corporations, representing companies like Patagonia and The North Face. And you have some vendors with their own proprietary B2Bs, further muddying the waters. It’s a frustrating potpourri of overlapping technologies, nearly unmanageable for most shops, ripe for a good old-fashioned rollup.
Good news, retailers: We may be on the brink of one.
How B2Bs came to be
The history of B2Bs is long, full of mergers, and probably too wonky for the tastes of most. But it’s critical to understanding where we are today. In the outdoor industry, the B2B market started in 2000, when a firm called CenterStone Technologies got off the ground in Denver. CenterStone’s product catered mainly to apparel and footwear companies, and it enjoyed plenty of early success. The tech was sensible, eliminating much of the headache of faxing paper order sheets, which was business as usual at the time; outdoor brands and retailers were quick to adopt it.
Over the next 20 years, CenterStone inspired competitors in the space. In 2003, another player cropped up, PlumRiver Technologies, which started to nab market share quickly. CenterStone responded by expanding in 2005, launching a new platform called iVendix. In 2009, another challenger entered the scene, Elastic Suite. Then the acquisitions started.
PlumRiver jumped first. The company bought Elastic in 2016 and CenterStone in 2018, increasing its market share exponentially. In 2020, sensing the need for consolidation, PlumRiver went all in on Elastic, elevating it as the business’s flagship product. Less than a year later, in January 2021, Emerald—the public parent company of Outdoor Retailer—bought PlumRiver for $34 million, throwing the weight of its roughly $400 million market cap behind Elastic’s technology. Twenty-one years after CenterStone kicked the whole thing off, a behemoth was born.
But not the only behemoth. Over in the fashion and big-box retail world, another company called NuORDER was founded in 2011. The software exploded in that sector, onboarding some 3,000 brands and more than 100,000 retailers—including icons like Nordstrom and Saks Fifth Avenue—in 10 years. This June, the Canadian software firm Lightspeed POS bought NuORDER for $425 million.
A Timeline of Major B2B Developments in the Outdoor Industry
|CenterStone Technologies founded||2000|
|PlumRiver Technologies founded||2003|
|CenterStone launches iVendix||2005|
|Elastic Suite founded||2009|
|PlumRiver acquires Elastic||2016|
|PlumRiver acquires CenterStone and iVendix||2018|
|PlumRiver makes Elastic its flagship platform||2020|
|Emerald acquires PlumRiver; Lightspeed POS acquires NuORDER||2021|
Here’s where things get interesting. Last year, NuORDER formed a partnership with Grassroots Outdoor Alliance, working directly with the group to become the B2B of choice for some of the most influential indie outdoor shops in the country. Executive Director Hill says the reason for choosing NuORDER was simple: “Elastic is much harder for buyers. It’s infuriating. NuORDER is the exact opposite—they built a system for retailers.”
Early this year, Outdoor Retailer rolled out a proprietary buying tool called Digital Market built on Elastic’s technology. Because Elastic has been present in one form or another in the outdoor space for two decades, it has some of the industry’s biggest brands already on board: Patagonia, The North Face, CamelBak, Fjällräven, Icebreaker, KÜHL, Mountain Hardwear, Outdoor Research, Smartwool, Timberland, and Rab are all users.
In the outdoor industry’s battle of the B2Bs, two heavyweight contenders have emerged.
More than one way to sell a coat
Elastic and NuORDER aren’t the only players in the space, of course, but they’re the titans poised for direct competition in the coming years. Each business is now flush with cash, and each has a major partner in the industry: Emerald/Outdoor Retailer behind Elastic, Grassroots behind NuORDER.
So what’s the difference between these products, really? The platforms diverge in several key ways, but the biggest is probably this: Elastic siloes its B2B by brand, while NuORDER doesn’t. Elastic is too cumbersome for retailers, NuORDER argues, because you can’t place orders from multiple vendors at the same time, or see your multibrand assortment on one screen. If you want to order from Rab and Smith Optics, say, you have to open two browser tabs, navigate to rab.elasticsuite.com and smithoptics.elasticsuite.com, log into each B2B separately, and complete two discrete order-writing processes. (A large chunk of Wes Allen’s 111 passwords are logins for different Elastic portals.) NuORDER functions more like a walled garden, with all brands and retailers logging into the same central platform.
NuORDER CEO Heath Wells sees Elastic’s segmentation as a cardinal sin. “You can’t have disparate experiences,” he says. “You need to have one central platform and network if you’re going to think about the retailer in general.”
It’s a view widely shared by retailers themselves, for obvious reasons. “In a perfect world, retailers would have one login for all the vendors we do business with and see everything in one place,” says Todd Frank, owner of The Trail Head, a shop with two locations in Missoula, Montana. “We’d be able to ask questions like, ‘What was our down jacket buy across all vendors this season? How many pairs of size-32 black pants do we have coming from all our brands?’ Being able to step back from your buy and look at everything you’ve ordered in one place—that’s the biggest advantage for us.”
Elastic, on the other hand, argues that siloing allows for a more powerful product on the brand side. According to CEO Josh Reddin, Elastic’s product is designed to integrate deeply into brands’ enterprise resource planning systems—the software companies use to manage core business functions like accounting, manufacturing, and marketing. “With our enterprise business, we’re heavily integrated into these massive, multibillion-dollar manufacturers’ daily processes,” says Reddin. This provides Elastic with data to better understand its clients’ supply chains, operations, warehousing logistics, and more, Reddin says, which—at least in theory—makes for a better product.
NuORDER’s response, amplified through its partners at Grassroots, is to reiterate that Elastic’s customization hurts retailers. As Allen of Sunlight Sports puts it, “Elastic’s pitch to brands is that you can customize your B2B. But when brands do that, you end up with a bunch of different layouts that are just dissimilar enough to cause problems. You have to spend a few minutes relearning each system every time you log in.”
Elastic, meanwhile, maintains that NuORDER’s vision of uniformity—the “everything in one place” approach—isn’t just unrealistic, it’s impossible to realize fully. “This open-marketplace concept that NuORDER tries to execute falls apart when you start talking about the biggest brands in the industry,” says Reddin. “Patagonia and The North Face will never share a cart in a B2B system, ever. These larger companies have tight product segmentation. If you think about a brand like The North Face, sold in places as disparate as Macy’s, REI, and specialty shops, they want to make sure their retailers are carrying unique product mixes. That means they need to control what products different retailers see, what pricing terms and discounts are offered—that kind of thing. That’s why, with certain manufacturers, we have to create that gated experience.”
Consider the retailer
So, to recap: two big products, two approaches to the technology, and a fragmented market. Who’s going to win this thing? Will one company eventually gobble up enough market share to become the industry’s de facto standard, or will the battle—and retailers’ technological headache—continue indefinitely?
The short answer is, it’s too soon to tell. The battle of the B2Bs, at this point, is anyone’s game.
Right now, Elastic is clearly ahead in user adoption. Because its business is built on legacy systems dating back 20 years—all of which targeted the outdoor industry from the get-go—it’s had a massive head start onboarding the big players. It’s hard to overstate the importance of that advantage. Once a few big brands have selected a platform, they’re unlikely to switch without good reason. A crowded market is primarily the retailer’s problem, after all. As Allen at Sunlight Sports says, “When a brand chooses a platform, we, as retailers, are forced to follow.” (Neither platform agreed to share its total number of brand partners for this article.)
It’s a point of assurance and pride for Elastic. “We have who we have,” says Reddin. “[These brands] are never going to leave—knock on wood. And so the retailer will always be using our tool, no matter what. When you have that leg up from an adoption and standardization standpoint, that’s a big win.”
On the other side of the equation, NuORDER has more money behind it and invests heavily in product development. And plenty of brands are still up for grabs. Alex Kutches, vice president of sales and marketing at Mystery Ranch, says his company recently signed on with NuORDER because it found the platform’s front-end functionality and user experience a better fit. “We felt good about the integration process,” he says. “This is the first season we’ve had a B2B solution, and honestly it came down to the wire between NuORDER and Elastic.”
Which Brands Use Which Platform: A Partial List
|Black Crows||Outdoor Research|
|Lowe Alpine||The North Face|
|Mountain Hardwear||686 Technical Apparel|
|Big Agnes||Klean Kanteen|
|Black Diamond||Mystery Ranch|
Perhaps all this is beside the point. The plight of giant corporations duking it out to dominate a crowded market isn’t all that compelling when you get right down to it. It’s the stories on the ground that matter: the small-business owners logging onto their shop computers and trembling at the sight of 111 browser tabs open simultaneously.
The B2B companies know this, too. Both Elastic and NuORDER insist that they care deeply about retailers. They work for both sides, they say. “Someone’s got to solve the retailer’s side,” says Wells. “That’s what we’re on a mission to do. We see this as a two-sided equation. Both need to win.” Reddin echoes the sentiment. “If we want to communicate with our retailers digitally, we can’t have them using 15 different platforms,” he says.
Given this general outlook at Elastic and NuORDER, there’s another question at play here—more cynical, but worth asking. Both companies are built on the premise that one platform, if it’s constructed well and reaches a critical mass of users, can solve the needs of brands and retailers simultaneously. It’s certainly an elegant idea. But is it realistic?
The user-experience philosophy of most B2Bs (including these two) ignores the reality that brands and retailers don’t have equivalent pull in platform selection. Yes, these products profess to serve both sides equally, but the fact remains that even hundreds of retailers collectively campaigning for the standardization of one platform may not be enough to convince the big brands to use it, too. On the other hand, as soon as a company like Patagonia or The North Face digs in its heels and says “We’re using this one”—even with no explanation as to why—retailers are forced to follow. (Both Patagonia and The North Face declined to comment on their reasons for choosing Elastic. Arc’teryx, one of NuORDER’s biggest brands in the outdoor space, also declined a request for comment.)
If it turns out, then, that no single platform ever succeeds in monopolizing the industry (a very real possibility), retailers may always be at a disadvantage without some kind of third-party solution to fix the problem—a software, say, to organize and manage data from disparate B2Bs in a uniform way.
Up in Michigan, another company called Envoy B2B is working on just such a product.
Jon Faber, the CEO of Envoy, has directed his team to build a “retailer-centric” platform under the umbrella of a new company called BrandKeep. After interviewing more than 250 retailers across the U.S., Faber and his team have concluded that, right now, retailers’ biggest pain point isn’t the labor associated with placing orders through multiple B2Bs. “The primary challenge is organization,” Faber says. The only way to manage all the B2B systems productively is with another system designed to keep everything in one place.
To that end, BrandKeep, a cloud-based platform, won’t focus on order writing; instead, Faber and his team have dubbed their new tool a “vendor relationship management” system, which they’re calling the first of its kind. More like a digital filing cabinet, it will allow retailers to manually organize their B2B links, order deadlines, MAP policies, seasonal workbooks, price lists, and all the rest in one place. Brands will also be able to participate in the platform, providing verified information to retailers. Gabe Maier, former vice president at Grassroots, is leading the project. It will be available as soon as this year for some users, though the team at Envoy hasn’t released an official timeline.
“The retailer’s world has become more and more fragmented as brands continue to adopt digital solutions,” says Maier. “We believe [the problem] can only be solved by building a platform that puts the retailer in the driver’s seat from day one.”
Maybe, or maybe not. Frank at The Trail Head says that, in general, B2B management products strike him as “margin vampires”—so-called solutions, usually subscription-based, that eat away at retailers’ bottom lines. “Could I hire someone half-time, pay them to manage my B2Bs for me, and come out ahead?” he says. “More technology isn’t necessarily the solution to bad technology.”
For retailers who find themselves particularly affected by the hyper-fragmented state of the market and do want to manage the problem themselves, however, it might be just the lifeline they need.
The days ahead
It’s worth noting that not everyone is sold on the idea of B2Bs in the first place. As with any technology, there are bound to be skeptics. Some predict, pessimistically, that B2Bs will sound the death knell for trade shows and independent sales reps, but those fears are probably overblown. Though it’s tempting to read Emerald’s (i.e. Outdoor Retailer’s) investment in Elastic as a hedge against potential trade show declines, OR show director Marisa Nicholson is quick to emphasize her organization’s position on the new Digital Market buying tool. “I don’t see it as replacing the trade show,” she says. “I see it as the evolution of how we’re doing business. It doesn’t change the reason you’re coming to OR. Ultimately it just provides a more efficient sales tool.”
Ditto on the rep side. As Phil Flamand, a three-decade industry rep and owner of the agency Flamand Sports, which represents brands such as prAna and Thule, points out, it’s natural for folks in his position to worry about this kind of thing. “You start to think, if this becomes too good, they’re not going to need me anymore,” he says. “But the fact is, we now have a better pulse on retailers’ businesses because of these tools.”
In the coming years, the conversation is much more likely to pivot to issues like data privacy. “Any investor in a publicly traded company in our industry would be interested in getting their hands on preseason sales data,” Hill at Grassroots says. As B2Bs continue to add brands and retailers to their client lists, the opportunity to monetize data from those businesses will only grow.
It’s a concern that’s painfully present for many retailers. “There’s too much money at stake here not to think there’s a data play going on,” says Frank at The Trail Head. “The big fear every retailer has is that this data will be weaponized against us.” If B2Bs start selling sales data to brands (especially the ones with direct-to-consumer channels) as well as online marketplaces, he says, “it will destroy the secret sauce we have as individual store owners trying to compete.”
For now, Grassroots has a written agreement with NuORDER that the latter won’t sell preseason order data from any Grassroots retailers. Reddin, over at Elastic, makes a similar promise. “It never has been, and never will be, a short- or long-term objective to use our clients’ sell-in data for anything other than providing an intuitive interface that allows for informed and predictive buy recommendations,” he says. Elastic doesn’t currently include language in its contracts that binds the company to this promise, but Reddin says he’s in the process of writing it in.
Still, looking to the future, it’s a concern both brands and retailers would do well to keep an eye on. User agreements and company policies can change.
All of this to say: We’ll see what happens. The race is underway, and it’s not showing any signs of slowing. On the B2B side, spirits are high. Reddin says he believes 90 percent of outdoor brands will be using Elastic by the end of 2022. NuORDER, meanwhile, is currently investing millions in its partnership with Grassroots.
“We think the B2B market is just getting started,” says Wells, adding for the record that he doesn’t like the word “battle” to describe what’s going on. “It’s a big market,” he says. “We all keep each other honest.”
Back in Cody, Wyoming, though, Allen doesn’t anticipate his 111-password list shrinking anytime soon. “There’s reason to believe retailers will not be the downstream beneficiaries of these systems,” he says. “It’s the standard with any online service: If you don’t pay for it, you’re the product.”
This story first appeared in the Summer 2021 issue of our print magazine.