Retailing giant Nordstrom has bought a minority stake in supply chain software outfit Dsco.
The latter is a cloud-based tech firm that helps suppliers ship orders direct to consumers in tandem with retail partners, The Wall Street Journal reported. The system works in this manner: A customer places an order, the order is routed to a manufacturer and then the manufacturer would ship that item directly to the consumer. The financial terms of the deal were not disclosed.
For Nordstrom, the strategy is one where drop shipping can help streamline costs, with the key coming as it requires holding fewer units of inventory.
Dsco in effect acts as a middleman, said WSJ, at the intersection between the retailers and suppliers, tracking inventory and orders. The middleman, so to speak, communicates with the supplier and the retailer. The key is to share data, said WSJ, with the end result being better tracking of inventory and making sure that demand is satisfied and in real time. In an interview with WSJ, Dsco Cofounder Jeremy Hanks stated that the funding from Nordstrom will be used to boost its data analytics capabilities to project when inventory may run low and also track optimal inventory levels to match demand, based in part on historical patterns.
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