Differences and similarities exist within retail revenue categories, but which ones are meaningful in an IT context?
To explore this concept, we polled retail technology executives and broke out results from retailers with revenue between $50 million and $1 billion. By comparing mid-sized retailers to the overall industry (a sample group we intentionally skew toward Tier 1 retailers), we sought to identify unique characteristics of SMB retailers. The study, SMB Tech Trends, was published in the August issue of RIS. If you would like a copy, you can download it at the RIS News Web site from within the research and studies section.
A few highlights that jumped out at me were:
Mid-sized retailers tend to favor initiatives with an immediate impact on store-level operations while larger retailers tend to favor enterprise systems that leverage previous investments.
Examples of this can be found in In-Store Tracking Analysis, which mid-sized retailers rank higher on their priority list than the rest of the industry, and Best Pricing, which mid-sized retailers rank lower. In-store tracking is a store-level, point-solution that produces immediate gains. This is right in the mid-sized retailer's sweet spot. Pricing technology, on the other hand, is a big, complex system that requires previous IT investments and significant internal change. Definitely not in the SMB sweet spot.
Another example is found in response to challenges identified over the next three years. Mid-sized retailers place major emphasis on Store Level IT Investment, and lower interest in Real-Time Visibility throughout the Organization. Again, one is in the sweet spot and one is not.
Despite advantages enjoyed by big retailers, many of the fastest growing companies in the industry come from the mid-sized segment, and RIS recognized several of these with Fast Growth Awards at an SMB retail conference in Denver in August. The winners included: Big M Inc. for Business Process Optimization; Build-a-Bear Workshop for Brand Building; Rentway for Real-Time Organization; Select Comfort for Innovation; Sport Chalet for Technology Impact; Sportsman's Warehouse for Managed Growth; and Teavana for Best New Concept.
Perhaps the biggest difference between SMB retailers and their larger brethren was noted by award winner Frank Zarrello of Big M. Mid-sized retailers are generally IT poor and business process rich. Fast-growth companies begin with outstanding business processes and then ultimately add IT systems to consolidate their growth.