EXCLUSIVE: Upshop Scales Up to Solve Retailers’ Challenges Globally
On July 9, total store operations solution leader Upshop announced that it has combined with Invafresh. The combined company, Upshop, now features a platform that will be used by more than 400 retailers across 35 countries, operating in 50,000-plus stores. Progressive Grocer had an opportunity to speak to Upshop CEO Shamus Hines to get early details on how the merger came about, what retailers can expect, and what’s next when it comes to food retail technology.
Progressive Grocer: Shamus, how did this deal come about?
Shamus Hines: My history goes back about seven years, but prior to that, there's been engagement between Invafresh and Upshop. There's been this kind of natural desire over many years to see whether these businesses would really be best together.
Why is that? The combined visions for the business are relatively aligned. There is collective energy on leveling up retail operations … guaranteeing item freshness, optimizing inventory, with a surgical focus on reducing food waste.
Improving the experience from an in-store perspective has been unique for our companies and something we both really desire to do and continue to improve. We are looking to scale up to solve this together, and I think it's something that retail has consistently told us that they want.
The decision is 100% for our clients, having the level of support that they need to run their operations. This is as mission critical as it gets for retailers, and we need to be able to have the size and scale to support them.
PG: This is Upshop’s fourth acquisition?
SH: Yes, this would be our fourth acquisition that we've done through Upshop. Invafresh completed an acquisition in the last 12 months, so there's proven experience in bringing businesses together across the company. We're both blessed to have as much M&A experience as we do, that the muscles there have existed.
PG: What were the three previous acquisitions for Upshop?
SH: ShopperKit, Pinpoint and Itasca. We get to draw from that collective experience that we've had. Now, we also have an experienced partner in Level Equity that conducts a significant amount of ongoing M&A to support their platform, companies, and a very strong team of executives that assist with operational priorities. And we have hired a consulting firm as well, FTI Consulting.
PG: How do you see the two companies coming together culturally?
SH: The collective culture across the businesses is unbelievably similar. There's such a shared view on culture. It's been relatively straightforward from that perspective. There's so much respect. In our inaugural executive meeting, just talking about each other's businesses, you could immediately feel the deep amount of respect across the leadership teams for each other, which is impressive.
PG: What are the things that Upshop does really well, and what are the things that Invafresh does really well?
SH: Generally speaking, the big, big differences include Upshop having moved to the cloud early. Having a deeper experience with SaaS is certainly a big differentiator and a lever that we're going to continue to pull in the combined businesses as we all come together as one. I'd say that the other thing that really stands out is Upshop’s broader portfolio of capabilities, especially as it relates to e-commerce and connecting inventory into the e-commerce world. Upshop’s ability to support DSD receiving and ordering within retail stores presents another area of focus for the combined businesses. There's a fair number of capabilities that we would bring there that would be unique.
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From an Invafresh perspective, I think the number one thing that jumps out is this global perspective, and that's desirable for us. It's not just a North American presence, but it's really expanding globally in a deeper, more meaningful way. We will have an additional office coming in Gothenburg, Sweden, with Invafresh's recent acquisition of Whywaste. That is a launching point for global expansion. The other strength for Invafresh is the deeper focus on food waste solutions and food waste as an initiative. We will elevate our food waste solutions voice as we come together as a unified brand.
PG: You have some capabilities from Invafresh on the commissary side too?
SH: Yes, commissary is a capability that Invafresh has really developed and has a quite complete vision around that we would look to continue to support. And on the Upshop side, I would say this Made-to-Order capability, which is like a kitchen management solution, is something that we're going to continue to push forward. Food retailers are executing Fresh using different models – we are built to support those differences.
Alongside other providers, each business has been progressing a FSMA and traceability solution in the marketplace. We're going to bundle the best of both and launch into the marketplace shortly. With our new organization, we can provide a FSMA 204 solution that is built for the retail environment.
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The last two things I'll mention is our center store inventory management is supposed to be something that we've both really played in, but it has been a strength of Upshop's with a complete vision and capability set that we would look to bring forward as a unified organization. Really excited about the dynamic markdown capabilities that Invafresh has, and that's largely been focused in the European market.
PG: What would you say are the top challenges that your combined company will be solving for retailers?
SH: I’d say the challenges fall into three big buckets: taking Fresh digital, managing inventory across the store, and determining what your optimal e-commerce presence should be. Each retailer is dealing with at least one, if not all three of those challenges.
Executing against each of these challenges is exponentially difficult when you layer on need to engage your associates. Retailers are still solving for the silver bullet to skill up and retain their teams. That continues to be a big, big barrier which demands technology to solve. It's important to get technology in the hands of the store associates so they have the insights to take real-time action. And so that's something we definitely do. And the last thing, again, food waste continues to be a focus. It's not just about the profits, it's about the impact. There's a broader impact to food waste that has been a major focus in Europe, but it's taken off globally. This is everywhere. This is something that people want to make sure that they're managing, and it has a societal impact, beyond profit.
PG: Can you discuss any nuances in terms of retailer demand for solutions to manage fresh operations versus center store operations?
SH: I'd say it's robust in both departments, and this is the reason why these companies are coming together. We're here to optimize operations across both departments and bring the best insights from over 20 years of managing Fresh and 30-plus years of managing the center store.
In addition, there is this wave of beyond fresh, beyond center store as well. For instance, there's desire from retailers to take control of DSD. DSD is getting attention considering the role it plays in traffic and sales. We're not seeing one outweigh the other in terms of momentum, but I would say that there's continued demand in all three of those departments for technology.
PG: What’s next for Upshop?
SH: We need some time to really unpack all the things that we're going to bring to market. That effort is something that we're super excited about, and will continue to work towards, with the aim to unveil substantial innovation at our Altitude conference in March.
