Memo: The Intuit of DTC

When Assembly, the eCommerce software and data platform, announced a strategic investment from Advent International and PSG last week, it made little noise in the news. Neither did its more than $1 billion valuation, five acquisitions, 30-plus product launches, or the $55 billion in gross merchandise value that the SaaS company helped its users earn since 2019.

Assembly set out to build a system of order among over 6,000 software solutions spanning 80 categories. It’s time that we consider that the toolmakers can be just as exciting as those who mine with them. Assembly is the Intuit of direct-to-consumer, and as more brands grow beyond the walls of Shopify, BigCommerce, Commerce Cloud and WooCommerce, they will eventually encounter Assembly’s considerable influence.

I had the opportunity to speak with co-founder and CEO of Assembly, Sandeep Kella and public relations lead Brynn Whitfield. I had to ask: “Does it seem as though people don’t care enough about what you’re building?” Sandeep responded to the like:

I don’t care about the notoriety, we’re here to build the tools for those who do.

This is a tale of the gold miner and the tool merchant. We can recall few failed miners during the Great Gold Rush of ’49 but several of the tool merchants remain household names to this day. Retail is shifting from offline to online and as opportunity continues to present itself for brands looking to grow in their reach and sophistication, they need tools before the head to the frontier. For Assembly, Kella, and Co-Founder Adam Crawshaw, they are building that company of tool merchants.

In March of 1848, 800 non-natives made the trip to California. By the end of 1848, that number ballooned to 20,000. And by 1849, that number reached 100,000. The gold rush was an example of the belief that the economic strength and vitality of America was tied to moving towards the frontier. Today’s frontier is digital, not physical.

Just like now, then. Out of the woodwork came investors, diggers, and tool merchants to the West. Samuel “Mark Twain” Clemens, the one failed miner that you may remember, learned first hand that the real business was in the selling of tools. After his time in Humboldt Range, he’d later write: “a mine is a hole in the ground with liars standing next to it.” You can mine for gold or you can supply the pickaxes. You know a few of the proverbial “pickaxe sellers” by name: Levi Strauss, Henry Wells, and Wells Fargo. Nearly two centuries later and digital commerce represents its own semblance of a gold rush.

At Assembly, Kella has focused on the tools and not the miners:

What aggregators have done for brands, we have been doing for software. We are singularly focused on helping eCommerce merchants grow better by bringing together software tools and combining them with valuable content. Our mission is to meet our customers’ needs at every stage of their growth.

Just because the company is making acquisitions doesn’t mean that it’s another roll-up factory. There are numerous companies looking to duplicate the value of Thrasio. Everywhere you look, holding companies are looking to acquire whatever the categorical preference is: brands, tiny businesses, even newsletters. There seems to be a market for every asset. To a lesser extent, WeCommerce is an example of a company building out a suite of creative tools. When I asked Kella about his acquisition approach and roll-up model, he was sure in his reply.

We may never acquire another company.

Notably, the recent fundraise press release cited the company’s plan to bolster the engineering team, signaling the leadership’s intent to build more of its product pipeline in-house and tie together the rest in ways that will improve cross-platform data-sharing and insights gained. Assembly is focused on making the brands that use its platforms more viable, longer-lasting, faster-growing, and more sophisticated at scale.  Every company seems to be zigging; Assembly’s path is the zag.

The more that we know, the more that we can do for our customers.

The average brand is managing 10 to 15 pieces of software to manage scale, inventory, and profitability. Kella’s theory is that this many separate software solutions can actually begin to hinder the progress of a retailer using them. The timing couldn’t be better for integrated, well-thought out marketing and inventory SaaS solutions.

A recent report by McKinsey & Company suggests that around 80 percent of CPG CEOs are looking for growth through their marketing channels. Associate partner Michelle Choi writes: “To do it, CPG companies need an AI engine, a 360-degree view of consumers, and a fit-for-purpose marketing technology stack to deliver the right message, to the right consumer, at the right moment — all the time.” The average brand owner cannot begin to manage this level of sophistication on its own. In my conversations with Kella, it is this maturing of the industry that led Assembly to build solutions that can provide these insights to customers. And if they don’t build it in-house, they acquire it. The company has acquired several companies across three performance sectors: marketplace performance, social performance, and performance analytics. They pair performance with insight via a reported 2 billion data points, content education, and a fellowship of partners made available to address the needs of merchants. Here is a selection of notable acquisitions by Assembly since its 2019 inception.

  • Led by Bojan Gajic, Helium 10 assists brands that look to improve processes around product research, sales trends, profitability estimation, customer insights, keyword optimization, inventory allotment protection, market tracking, and search term analytics.
  • Led by Ben Aldern, the Preztozone story begins with two former Amazon sellers who decided to turn their proven, internal tools for keyword bid optimization into its own company. They note that their platform was built from “the ground up for Amazon sellers by Amazon sellers.” The company boasts a best-in-class display for pay-per-click (PPC) data and a proprietary algorithm for bid optimization.
  • Led by Krystyn Harrison, OrderMetrics connects to a brand’s income and cost centers to help its leader understand existing and potential profitability. They do this by tying into programs like Shopify, Google Analytics, and Facebook. It’s a clear view  of a brand’s financial health.
  • Led by Alex Markov, Refersion manages the promotional networks of brands. What began as a beta product evolved into a platform that managed the affiliate and influencer marketing relationships for a reported 16,000+ brands and nearly 600,000 affiliates.

While the general media is typically focused on the brand side of the industry, history tells us that we are more likely to remember the tool makers than we are the gold miners. There’d be no Levi’s denim, Wells Fargo bank or writings of Mark Twain without the gold rush.

The eCommerce industry is in a period of gold rush-like intensity with new obstacles coming about each day. The number of merchants, marketplaces, and gross merchandising volume is rising by the week. The opportunity is there, so are the obstacles. One week it’s iOS 14.5’s damage to Facebook’s ad pixel, then it’s supply chain struggles, then it’s the costs of logistics or labor.

It may not seem exciting to the average industry observer, but for this audience, a cohort of builders is looking to identify opportunity and scale to meet them. Arbitrage opportunities can change the trajectory of a business’ fortune. To find them, you need the right tools and insights just like the gold miners did.

What Intuit is to finance, Assembly is looking to become for DTC. It will be exciting to see where Assembly goes next as omnichannel growth becomes the path forward for a growing class of modern brands.

By Web Smith | Editor: Hilary Milnes 

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