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.

1. Retail Software Industry
US Market & The World
By: Asutosh Gupta

2. Agenda
1. Retail Software Classification
2. Need for IT in Retail
3. Retail Software Industry
4. Retail Industry Trends
5. Global Retail Software Industry
6. Global - Retail Software Market Forecast
7. US Retail Software Markets
8. Major Retail Software Players
9. Competitive Positioning
10. Competitive Landscape
11. Global - Market Share Analysis
12. US Retail Software Trends
13. US Market - Opportunities
14. US Markets – Challenges
15. US Market Restraints
16. Future Focus & Goals

3. Retail Software Classification

4. Need for IT in Retail

5. Retail Software Industry

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. 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. Retail Software Market Forecast

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. 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. Competitive Positioning

12. Competitive Landscape
1. 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. Market Share Analysis
Despite 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. Retail Software Trends
1. 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 model
2. Replacement Wave Leading to the Increased Adoption of
new age enterprise and open-source solutions
– Retailers increasingly upgrading the solutions within stores
3. Increased Focus on Retail Business Integration and
Optimization in Order to Make More Informed Decisions
4. Increased Investment in Customer-centric and Cross-channel
Solutions to Enhance Customers' Shopping Experience
5. Faster Response to Market Changes and Customer's
Demands Increase Demand for Analytics Solutions

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. Challenges
1. Legacy Systems and High CAPEX curtail the SME from
Adopting New Generation End-to-end Solutions
2. 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 profile
4. Integration Issues among Software Modules pose a Challenge
for several Retailers and Vendors
– Presence of several touch points makes integration a great challenge

17. Market Restraints
1. Economic Slowdown Defers IT Investments across the World
– Several retailers are deferring their IT investments
2. 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 slow
3. 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 constraints
4. 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 Revenues
5. Software Piracy in Regional Markets Curbs Market Growth

18. GTP - Future Focus in Retail
Companies need to focus their efforts in Retail Domain more
towards 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. Thank You
Asutosh Gupta
Phone: 415-694-9796 | E-mail: asutoshgupta@global.t-bird.edu | Skype: asutoshus