THE RETAIL MARKET BY THE NUMBERS
2004 2005
U.S. Retail Sales (total) $3.47 trillion $3.71 trillion
More than 95% of all retailers had only one outlet.
Close to 90% of retail companies registered sales of less than $2.5 million.
More than 98% of all retailers employed fewer than 100 workers.
Growth
7%
SOURCE: NATIONAL RETAIL FEDERATION; BULLETED FIGURES ARE FROM 2002, THE MOST RECENT DATA AVAILABLE
tire technical infrastructure to a service
provider, says Kilcourse. Channel partners
have the opportunity to craft software-as-a-service (SaaS) offerings to suit the smaller retailer’s particular needs. Being able to “rent”
software functionality such as financials,
POS, and merchandising on a monthly basis
rather than paying to implement the software
in-house can be a very attractive option.
Retail management, e-commerce, and
business intelligence are some of the hottest
technologies selling to small retailers today.
ActivePoint is a provider of e-catalog software. The Catalog Consultancy, an ActivePoint partner, builds e-commerce Web sites
for smaller retailers that feature richer product information and illustration than a typical smaller e-tailer Web site.
The recently launched MensHats.com, for
example, enables visitors to access product
data however they prefer, such as by product
name, bestseller, hat types, and new arrivals.
The site also features an e-catalog, powered
by ActivePoint, that visitors can flip through
as they would a paper model. The ability to
access rich product information in an online
catalog format makes the small company
stand out, according to Sidney Kerber, president of the Catalog Consultancy of Boca Raton, Fla., which built and maintains the site
for the retailer.
“This gives companies a new way to reach
customers rather than spending lots of money
to send catalogs to people who won’t buy,”
says Kerber. If the retailer already has a catalog, it is a trivial matter to put it online using the ActivePoint solution. If not, with the
assistance of Kerber and his team, the retailer could create a catalog with PDFs of
product photos and information and publish
it to the Web site, rather than going through
the expense and time needed to print and
mail the catalog.
Electronic catalogs are a more engaging
way to sell to online shoppers than Web sites,
according to Kerber. “Browsing a Web site is
like shopping at a flea market. You walk
through and have to try to find the products
you want. Web designers are not merchants,”
he says. “Their job is to get as much merchandise on the Web site as they can. They
don’t necessarily feature things or show the
product in lifestyle situations.”
ActivePoint data for MensHats.com indicates that shoppers engage with the e-catalog in much the same way they would shop
with a print catalog. “We’re getting multi-unit
orders vs. single-unit orders,” says Kerber.
“When [online shoppers] have the whole
thing in front of them, they shop differently
and spend more.”
So-called “clicks-and-bricks” retailers (i.e.,
those that have some retail stores along with
a Web site) are keenly interested in multichannel integration solutions, according to
Kilcourse. “They need one view of their customer across all channels,” he says, so that
customer-facing employees can view all of
the customer’s transactions in one screen and
provide holistic service.
With this “360-degree view of the customer” in place, the next step is for the retailer to differentiate its service level according to the customer’s profitability. While
many retailers start off distinguishing only between the best customers and everyone else,
the goal is to be ever more fine-grained,
catering to multiple levels at the same time.
need to be able to speak the language. That
might seem simple, but it’s not.”
This can make start-up difficult. Before
jumping into this space, spend time at retail
conferences and consider partnering with another firm that has already served retailers.
At the very least, do not play up your expertise in other industries and expect that to
carry the day. As with many verticals, insiders have an easier time of it.
This is an exciting time to be a small retailer, and by extension, to sell to them, says
Kilcourse. Though margins will likely remain
tight, smaller stores now have access to technology that used to be the sole province of
the Wal-Marts of the world.
“The price-performance improvements in
technology have made it possible for smaller
retailers to get the full advantage of the
things used by the biggest retailers,” says Kilcourse. “Smaller retailers are not carrying
around the burden of their success. The
biggest retailers hate to change. Midtier retailers don’t have that prejudice. They are
more flexible and freer to innovate, and now
they have the technology tools that will help
them do that.”
LAUREN GIBBONS PAUL has more than 15
years of experience as a writer and editor
for a variety of leading business and technology publications.
FOR MORE INFORMATION
DOMAIN KNOWLEDGE IS KEY
The single most important success factor in
selling technology to retailers is that you
have experience in that vertical. “They need
to know retail—period, end of story,” says
AMR Research’s Garf. “Retailers feel like
they’re different, and [channel partners]
?
cpeditor@ehpub.com
