THE BUSINESS OF OMNI-CHANNEL RETAIL

SPS Commerce (NASDAQ: SPSC)• Headquartered in Minneapolis, MN

• 100% retail enterprise cloud services

• 50 consecutive quarters of growth

• Profitable, strong balance sheet

• Retail industry’s largest network

– 2,000 Retailers, 50,000 Suppliers, 1,000’s of 3PLs, Carriers, Factories

SPS COMMERCE CONFIDENTIAL INFORMATION

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$83,000,000,000

29%13,000,000,000

68%

OMNI-CHANNEL FUNDAMENTALS• Item Management Adaptability

• Sell-Thru Velocity

• Item Sourcing

• Frictionless Scale

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AGENDA - MORNING9:00-9:50 am Omni-Channel Retail: A view from the front

Paula Rosenblum, RSR Research

10:00-10:50 am Leaving the Catalog BehindBill Gratke, Lamps PlusSanjay Parthasarathy, IndixMike Lapchick, Shotfarm

11:00-11:50 am Where is the customer and what are they buying?Michelle Landis, UnderArmor

AGENDA - AFTERNOON1:00-1:50pm The Key to Infinite Aisle Success

Justin Stevens, QuirkyJim Sustar, Trademark Global

 2:00-2:50pm Why Drop-Ship Changes Everything, and Nothing

Tanya Tremoulet, SOG KnivesMark Hopkins, SkullcandyChad Collins, Accellos

PAULA ROSENBLUMRSR RESEARCHOmni-Channel Retail: A view from the front

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AGENDA - MORNING9;00-9:50 am Omni-Channel Retail: A view from the front

Paula Rosenblum, RSR Research

10:00-10:50 am Leaving the Catalog BehindBill Gratke, Lamps PlusSanjay Parthasarathy, IndixMike Lapchick, Shotfarm

11:00-11:50 am Where is the customer and what are they buying?Michelle Landis, UnderArmor

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AGENDA - AFTERNOON1:00-1:50pm The Key to Infinite Aisle Success

Justin Stevens, QuirkyJim Sustar, Trademark Global

 2:00-2:50pm Why Drop-Ship Changes Everything, and Nothing

Tanya Tremoulet, SOG KnivesMark Hopkins, SkullcandyChad Collins, Accellos

THE BUSINESS OF OMNI-CHANNEL RETAIL

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APPENDIX

KEY CHALLENGE(S)

“(In 2012) Amazon posted Web sales of $61 billion, compared to an estimated $7.7 billion for WalMart”

-WSJ, June 18, 2013

TODAY’S MARKET

• Change is the new normal

• Small becomes big, fast

• Pace is quickening

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DIRECTIONAL INDICATORS• MOBILE CONSUMERS

• FRICTION REDUCTION, EVERYWHERE

• SOCIAL…EVERYTHING

OMNI-CHANNEL FUNDAMENTALS• Item Management Adaptability

• Item Sell-Thru Velocity

• Item Sourcing

• Frictionless Scale

ONE CONNECTION

ERP

COMPLETE CLOUD-BASED INTEGRATION TO 10,000’S OF TRADING PARTNERS

RSX = RETAIL STANDARD XMLTHE STANDARD FOR TRADING PARTNER INTEGRATION

RetailersSUPPLIERS, VENDORS,

MANUFACTURERS, DISTRIBUTORS

ITEM MANAGEMENT• Hundreds of attributes

– Retail, ordering, logistics, pricing & more

• E-commerce readiness

– Marketing content

– Image, digital asset management

• Inventory information

– Current & future quantity

– Location

Quality item

information

Strong e-

commerce presence

Increased consumer

sales

ITEM SELL-THROUGH• Enable responsive sell-through performance, by location

• Collaboration between retailers and suppliers

• Visibility enables successful customer experiences

ITEM SOURCING• Endless-aisle retail = exponential item growth

– Annual SKU growth of 60 - 100%

• Customers “expect” two day delivery– Reliance on drop ship due to capex limitations

• Traditional retailer sourcing & merchandising practices do not scale