When accessories maker Thread developed its first product in 2014 - an elastic wallet aimed at adventurous types like surfers, skiers and snowboarders – its target audience was a farmer's market in Hawaii. Eight years later, the business has expanded from direct-to-consumer sales at a small market to incorporate wholesale distribution, branded mall kiosks, and adding other accessories like bags and lanyards to the original range of wallets.
Going from a $30,000 Kickstarter startup to a $15m+ revenue organization, the firm realized it needed a more advanced platform to run its business and turned to Oracle NetSuite for its ERP and analytics. This was crucial for advancing plans to expand Thread’s wholesale business and brick and mortar stores, while still continuing to grow its direct to consumer business, which has been the largest revenue earner.
While many retailers are choosing this moment to reduce their physical stores or move out of the high street completely, Thread is taking a different approach by increasing its mall kiosks. Mitch Sanders, Chief Operating Officer at Thread Wallets, explains:
At the beginning of 2020 and through Covid, everybody was predicting the demise of brick and mortar. But when we launched our own brick and mortar stores, we started to see that in person was doing well for us. I think the demise of brick-and-mortar has been largely exaggerated and I think it's going to come back to a lot of people's surprise.
Instead, it is the digital side of the retail business that is starting to prove more difficult. Over the last year or two, some of the new iOS updates and digital advertising have made online selling a little harder for Thread.
Prior to the switch to NetSuite, Thread was using Stitch Labs and then moved onto Finale Inventory. However, as the firm started managing more transactions it realized it was outgrowing Finale Inventory, as the billing was done per transaction and was getting too expensive. Sanders says:
We were going into wholesale so we needed a better system that could function as a CRM. At that point we had been using Shopify as a poorly put together wholesale platform. We needed NetSuite to be able to support that growth. With our kiosks, we needed it so we can manage multiple locations of inventory easily.
Thread went live on NetSuite in April 2021, after around a year and a half of sales and onboarding. The firm didn't consider many other vendors before closing the deal, recalls Sanders:
We knew NetSuite was top of the class and we'd had NetSuite salespeople reaching out to us throughout the years. I’d looked at tons of videos and tutorials about it and when the time came, I was certain it was going to be NetSuite.
However, when Thread finally started the implementation process, it felt a little premature. Sanders likens the transition period to jumping from an old banger to a top-of-the-range car:
It felt like we were driving a Honda Civic with 300,000 miles on it. We needed something new and we knew in the future we were going to need a BMW. So we decided that instead of implementing a solution midway between the Civic and the BMW, we would go all the way.
Initially, Sanders admits Thread was a bit out of its league, with uncertainty over how the firm would handle an advanced system like NetSuite and whether they would need such a comprehensive suite. But after 18 months of being live, the firm has grown into the technology well, and is pleased its business growth won’t be hampered by the software in place:
It quickly became apparent that we did need it and that it was going to be a big part of our business and support our growth. We're utilizing a lot of features. There's a lot we don't use, but overall it's a good feeling knowing that we've got the top-end solution that'll support our growth.
It was uncomfortable at times as we adjusted to a new system that’s built for companies much larger than ourselves, and you can tell that when you use it. But it was also comforting knowing that we could grow to become a large business.
For Thread, which was transitioning from a small to medium-sized business at the time of selecting NetSuite, cost was an issue. Sanders had to work with his finance team to convince them of the value, which was tricky as the firm couldn’t be sure of how the system would work for them:
We could be told a million things by the sales teams but until we actually implemented and started using it with our own processes, it's hard to know what it's going to do for us. It was a little bit of a stretch for us as a small company, but the sales team was willing to work with us and they were able to discount fairly aggressively to get us through the door.
After the initial NetSuite ERP deployment, Thread has more recently added NetSuite Analytics Warehouse (NSAW). One of the key benefits of this is the machine learning aspect, which Thread is now using alongside the forecast it receives from its sales channel heads as a sanity check. If the direct-to-consumer sales channel head predicts a certain number of sales in December, for example, the firm can look at the historical figures for that period, run that through the machine-learning algorithms and see what comes back. Sanders explains:
It's a comparison tool. What's great is the inputs that are there for the machine learning, it's able to make sense of those a lot of times better than we can. But then we also have to augment it with the inputs that aren't necessarily reflected in our data. For example, we're going to be running a sale in December. We haven't run sales before, so we need to increase our forecast above the machine learning model by x amount.
Overall, the NetSuite implementation has met or exceeded all Thread’s original goals: improving demand planning via the NSAW addition, as well as supporting wholesale growth and retail expansion.
Once NetSuite was in place as a foundation for running the business, Thread was able to integrate NuORDER by Lightspeed, a B2B sales platform which enables the firm’s wholesale growth, says Sanders:
A large reason why we needed NetSuite to begin with was for the ability to integrate all these other softwares. We weren't able to do that with our previous solutions.
Regarding retail store expansion, Thread has been using the multi-location demand planning element, which the team uses to decide what to send to each kiosk in each location every week and what inventory needs to be there. Sanders is pleased with how that's gone:
That's been excellent. We've been able to connect with our Shopify point of sale system and pipe orders into NetSuite.
Looking back, the only thing Sanders wishes he had done differently is to involve more of the Thread staff in the NetSuite technology at an earlier stage. When the firm started out on the project, he was the only person that worked on the implementation:
The knowledge was very siloed with me. That was the wrong way to go about it. I wish I had involved more people in the implementation. It was almost - I know I'm going to do it right, we're just going to do it as fast as we can. But in hindsight, it would have been better to involve other people.
Once Thread had gone live with the product, Sanders did training sessions with the team, and took advantage of Learning Cloud Support to help get employees up to speed. A year and a half on, Thread has brought on another admin so there are now two admins to manage the product, and the business is in a pretty stable place where Sanders doesn't have to train people so much. Instead, he can step away and troubleshoot or look for other ways to utilize NetSuite.