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Retail Software Industry Us & Global (Asutosh Gupta)


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The retail software market is broadly divided into four key application segments.
In-store solutions – This segment includes point of sale, kiosks and self checkout solutions, back office, audit management, cross channel order management, work force management, e-commerce solutions, real estate management, store level inventory solutions and so on.
Customer centric solutions – This includes marketing management, promotions, customer loyalty, customer relationship management, merchandise management and space management solutions.
Headquarter solutions – This segment includes business intelligence, performance management, enterprise level pricing, enterprise level inventory management, corporate financials, HR and data warehousing solutions.
Supply chain solutions – This includes order management, warehouse management, procurement, product life cycle management and transportation management.

Retail Software Industry Us & Global (Asutosh Gupta)

  1. 1. Retail Software Industry US Market & The World By: Asutosh Gupta
  2. 2. Agenda1. Retail Software Classification2. Need for IT in Retail3. Retail Software Industry4. Retail Industry Trends5. Global Retail Software Industry6. Global - Retail Software Market Forecast7. US Retail Software Markets8. Major Retail Software Players9. Competitive Positioning10. Competitive Landscape11. Global - Market Share Analysis12. US Retail Software Trends13. US Market - Opportunities14. US Markets – Challenges15. US Market Restraints16. Future Focus & Goals
  3. 3. Retail Software Classification
  4. 4. Need for IT in Retail
  5. 5. Retail Software Industry
  6. 6. Retail Industry Trends• Retailers are increasingly focusing on integrated solutions – Profitably manage their customers demands – Gain a competitive edge• Added pressure on retailers to enhance the customer’s shopping experience through solutions, enhancing – Product availability, Effective pricing and Promotion strategies, Improved service, etc.• Global Retail Markets still witnessing good growth, despite the unfavorable macro economic conditions in mature markets such as United States, Japan, etc. – Retailers announce new store openings and expansion plans – Growth in Asia Pacific and Central and Eastern European Markets
  7. 7. Global Retail Software Industry• Movement towards enterprise level and business integration solutions – Avoids lack of coordination, solution can talk to each other• Business Optimization Solutions demand increases – Customized Solutions prime in North America & Europe – Packaged Solutions prime in Asia Pacific and Latin America• In 2008-09, Retail software market earned $3.08 billion through software licensing revenues, globally – Retail Market Pundits speculate continued growth for next 5 yrs. – In-store Point of Sale (POS) Solutions • Mature phase - North American region • Growth phase - Across other geographic regions – Headquarter and customer-centric solutions • Growth phase - North America, Europe, Middle East, & Africa(EMEA) • Early stages of adoption – Across Asia Pacific & Latin America• Customer-centric and business intelligence (BI) solutions gain momentum in North America & Europe
  8. 8. Retail Software Market Forecast
  9. 9. US Retail Software Markets• Largest Retail Software Solutions Market– 52 %• Market is in Replacement phase for in-store solutions – Increased adoption of open-source solutions – Retailers realize high costs associated with legacy systems• BI & customer-centric solutions move to replace in-store solutions as prime revenue drivers• Retailers plan invest in new IT solutions to gain competitive edge and future growth during recession era• US market more inclined towards headquarter solutions such as BI and performance management• Top software vendors in this market are SAP, Oracle, NCR, Microsoft, Activant, Retalix, JDA, Epicor, and others.
  10. 10. Major Retail Software Players• Retail application Vendors can be classified into 3 categories: – Top 4 Players: SAP, Oracle, NCR, and Microsoft dominate the top end of the market – Growing Players: Companies such as JDA, Retalix, Activant, Aldata, etc. offer significant competition to market leaders – Specialty Players: Companies like Micros, Epicor, Celerant Retail, etc.• Market is currently undergoing consolidation, the overall market is still expected to remain fragmented – Epicor acquired NSB, IBM acquired Cognos, and SAP acquired Business Objects in the beginning of 2008 – JDA acquired i2 technologies, to improve its stake in the Supply chain management (SCM) industry• Competition expected to intensify, as more vendors focus on M&As to expand product portfolio and increase foothold
  11. 11. Competitive Positioning
  12. 12. Competitive Landscape1. Market Leaders – Tier 1 companies with a legacy in the software markets – Strong global presence & Large capital base – Companies included are SAP, Oracle, and Microsoft.2. Market Challengers – Pose huge threat to the market leaders – Gained considerable presence in the industry by M&As – Companies like NCR, IBM, SAS, Retalix, Activant, JDA, etc.3. Market Contenders or Niche Participants – Tier 2 companies, have strong presence in certain app. segments – Companies like Aldata Solutions, Micros, Kronos, Reflexis, Microstrategy, Soft Solutions, etc.4. Regional Participants – Vendors have regional concentration and provided cost-competitive solutions to the regional retailers – Companies like are Simext, UFIDA, etc.
  13. 13. Market Share AnalysisDespite some consolidation in the industry, this market is expected to remain highly fragmented as tier 3, tier 4, and tier 5 retailers continue to focus on regional vendors while purchasing software solutions
  14. 14. Retail Software Trends1. Transition towards the Software as a Service (SaaS), to avoid huge up-front CAPEX with growing retailers – Critical to current economic conditions – Retailers refrain form making huge IT investments – SME’s embrace this pricing model2. Replacement Wave Leading to the Increased Adoption of new age enterprise and open-source solutions – Retailers increasingly upgrading the solutions within stores3. Increased Focus on Retail Business Integration and Optimization in Order to Make More Informed Decisions4. Increased Investment in Customer-centric and Cross-channel Solutions to Enhance Customers Shopping Experience5. Faster Response to Market Changes and Customers Demands Increase Demand for Analytics Solutions
  15. 15. Opportunities• Headquarter Solutions – Business intelligence and analytics solutions such as performance management. – Anticipated Maximum growth by 2014• In-store & Supply Chain Solutions – Customization of Point of sale( POS), back office, and inventory management solutions – Development of open-source and Software as a Service (SaaS) solution, in demand by SMEs.• Customer-centric & Cross Channel – Customer loyalty, customized promotions, and CRM Solutions• Retail Business Integration and Optimization Solutions – Design and Development of Solutions with Vendors targeting Tier 2 & 3 retailers
  16. 16. Challenges1. Legacy Systems and High CAPEX curtail the SME from Adopting New Generation End-to-end Solutions2. Presence of Regulations and Compliances within the Industry Challenge Software Implementation – Need additional customization which is time-consuming – Several compliance issues , e.g. Payment Card Industry (PCI)3. Increased Consolidation within the Software Industry Poses a Threat to Market Growth – Not effective in integrating acquired solutions to existing profile4. Integration Issues among Software Modules pose a Challenge for several Retailers and Vendors – Presence of several touch points makes integration a great challenge
  17. 17. Market Restraints1. Economic Slowdown Defers IT Investments across the World – Several retailers are deferring their IT investments2. Long Sales Cycles Curb the Faster Growth for Vendors – Purchasing decisions are highly time-consuming – Retailers tend to hold back their decisions on investing – Rate of technology upgradation is slow3. Lack of Awareness among the Smaller Retailers Restrains the Overall Growth of Retail Software Market – Mostly SME’s that do not understand the impact of solutions – Many of these retailers also face budget constraints4. Increasing Focus on after-sales Services Cannibalizing Sales of New Solutions – Retailers focus on After Sales Services such as Software Maintenance – After Sales Services Continue to affect Software Licensing Revenues5. Software Piracy in Regional Markets Curbs Market Growth
  18. 18. GTP - Future Focus in RetailCompanies need to focus their efforts in Retail Domain moretowards the following kinds of engagements:• Business Intelligence & Analytics solutions for SME retailers monitoring performance and indentifying core issues• In-store solution replacements to existing POS, inventory management solutions, etc. using open source and SaaS licensing models• Utilize expertise and experience in Retail business integration and optimization solutions for Vendors having Tier 2&3 retailers as clients – Order Management and Warehousing Solutions – Supply Chain Solutions and Demand Forecasting Solution Integrations• Customer centric , Cross Channel, IMCR application enhancements and developments , that work towards increasing Customer Loyalty and enhance customer experience
  19. 19. Thank You Asutosh GuptaPhone: 415-694-9796 | E-mail: | Skype: asutoshus