Magazine Article | December 20, 2006

SMRs Need SEM

Source: Innovative Retail Technologies

Hosted solutions would make task management feasible for SMRs (small to medium retailers).

Integrated Solutions For Retailers, January 2007

SEM (store execution management) is essentially a blend of art and science with the intention of keeping store associates informed about and compliant with corporate directives. Software solutions that enable SEM have become popular with retailers seeking to tighten up the execution of promotions, store layout, training initiatives, and other corporate mandates. Equally important, SEM solutions offer an automated means of tracking and auditing store performance at a granular level.

A recent call with Prasanth Palakurthi, CEO of SEM solution provider Reflexis, confirmed that tier-one retailers are eating up store execution management solutions. The vendor is anticipating triple-digit growth in 2007 and recently signed up several big, nationally recognized retailers. Reflexis licenses its software to tier-one retailers in three- to five-month implementation cycles. Its chief competitor, StorePerform, targets like-sized big-budget retailers and is also doing quite well in terms of customer wins. Meanwhile, providers of SEM and task management solutions have underserved SMRs that are equally in need. The license expense and length of SEM development projects, which require on-site installation and support, have proven too much for many SMRs.

Will SMRs Buy Web-Based SEM?
I recently spoke with Ian Long, one of the founders of 2006 startup Opterus, a company that aims to serve up an SEM solution for SMRs. The key to Opterus' success, he predicts, will be the fact that its software is deployed as a Web-based service, all but eliminating the expense of on-site installation and maintenance. Its flagship product, Store Ops-Center, will be in pilot during Q1 '07.

While the software-as-a-service model is certainly not a new means of reducing expense from retail software implementation, it is somewhat dependent on the retailer's network connection. Long says the requirements for the deployment of Opterus are only an Internet connection and browser-enabled PCs at store locations. But while broadband network providers have staked a claim in the retail space, they certainly haven't saturated the midmarket with fat pipes. In fact, I'm still surprised by the number of billion-dollar retailers running dial-up WANs to stores. The reality is that broadband is necessary for the centralization of software deployment, especially in situations where a retailer is running multiple hosted applications. I suspect the absence of broadband proliferation among SMRs might be an early hurdle for Opterus (though Long tells me the software is dial-up network-friendly). But I also suspect that solutions like that which Opterus offers, coupled with de facto advantages of broadband (like transaction speed improvements and enterprise-wide inventory lookup), might help justify broadband adoption in the midmarket.