eBay Enterprise and Innotrac form combined firm called Radial

E-commerce fulfillment firms eBay Enterprise and Innotrac said today they have joined forces under the new name of "Radial" and have hired a Microsoft Corp. executive to develop logistics technologies to support the sale of e-commerce fulfillment services to retailers.

Radial will be headquartered in eBay Enterprise's headquarters in King of Prussia, Pa., and will provide order management, payment processing, order routing, fulfillment, and analytics services, the companies said. The new entity operates 27 distribution centers and six call centers in the U.S., Canada, and Europe, employing more than 7,000 people.

The announcement comes less than a year after the companies were acquired by a team of private equity groups led by Chicago-based Sterling Partners. Radial has a built-in customer base of online retailers like DSW Inc., GameStop Corp., Shoe Carnival Inc., and Destination XL Group Inc.

Stefan Weitz, who Radial hired as chief product and strategy officer, performed the same task at Microsoft's Bing.com search engine, as well as for other products, during his 18 years at the Redmond, Wash.-based software colossus.

Retailers face enormous pressure to meet profit goals while responding to consumer expectations for a personalized shopping experience, visibility into the shipping process, and buy-from-anywhere/deliver-to-anywhere services, Weitz said in a phone interview Monday.

"There's too much complexity and too little infrastructure for retailers to expect that what has worked for the last 15 years in e-commerce will work for the next 20 years," Weitz said.

That pressure will continue to rise as online commerce grows in comparison to in-store sales and millennial shoppers buy through cross-channel platforms such as the Facebook Messenger app or quick response scans (QR codes), he said.

"Surviving in that world requires logistical operations that are frankly not the core competency of all the retailers out there," he said.

To meet the needs of retailers struggling to fulfill those demands, Radial will sell a menu of modular logistics services, filling any gaps in a company's plan. One of Radial's key tools for allowing a company to perform profitable omnichannel operations is a sourcing algorithm that can apply rules to a client's inventory management system.

"Shipping alone can tank your whole margin if you're not careful about it," Weitz said. "Even if a store in Hawaii has a particular shirt and could get it to the customer fastest, you should never ship from Hawaii to Delaware because that would use up your whole margin."

Radial can help companies avoid those inefficient practices by selling them services such as software tools, warehouse space, customer service call centers, and other logistics services, he said.