Background
Retalix is a supply chain software and solutions provider headquartered in Dallas, Texas (US) and Ra'anana, Israel with a truly focused vertical orientation in the retail food industry, worldwide. Retalix's growth strategy over the past several years has been to expand its enterprise and supply chain management applications while maintaining close integration with their widely installed, in-store solutions. It has grown both organically and through acquisition. Retalix acquired OMI International in early 2004, a warehouse management system (WMS) and supply chain execution (SCE) vendor that is also focused on the retail food sector in early 2004. It continued with its growth strategy through acquisitions of IDS and TCI Solutions in April of 2005. The planned integration of OMI's best-of-breed supply chain execution solutions into the current application suite, as well as the new combination of technology and expertise that will ensue will enable Retalix to offer broader wholesale distributor appeal. The IDS acquisition gives Retalix a stronger install base (along with more enterprise resource planning-like applications) to farm as a growth opportunity for the future. TCI Solutions, also retail food centric, brings to the table a set of merchandising, price management, promotions, and inventory management products to round out the product portfolio suite.
Vendor Strategy and Trajectory
Retalix' vision, from the day the company was founded in 1982, has been to build its competitive position by offering superior retail food sector technology. The software is designed to be modular, scalable to large transaction volumes, capable of handling rapid scanning with extreme reliability, and able to integrate multiple store formats and hardware systems, which are all key requirements of the retail food segment.
What is most compelling about Retalix is its absolute dedication to the food related segment of retail. Best described by Barry Shacked, Retalix' chief executive officer since 1982, the company's focus is on "the grocery, convenience store, fuel, and food service retailers and wholesale distributors world wide". Retalix only has one target sector, which is really a sub-segment of "retail" and it has its entire product, and human and intellectual resources solely aiming at this same target.
This is a unique quality in today's retail software market landscape. Many software vendors pursue growth via merger and acquisition, coupled with product verticalization into sectors that are not necessarily their domain. At the high end, SAP's ventures into twenty-six verticals are overwhelming, especially given that it's actually targeted all of these verticals over the years. Oracle's recent acquisition of Retek is a clear move to shore up its retail expertise, install base, and product footprint. But neither of these mega-enterprise resource planning (ERP) vendors has significant traction in food-related retail, in relative terms, compared to their other varied segments. For mid-market vendors, far too often solution providers espouse vertical initiatives or capabilities driven by opportunistic means. In other words, they signed up a client or two that happen to fall into a market segment that they didn't necessarily target. Many retail software solution providers today are heavily steeped into retail apparel segments with its vast array of complex and unique requirements.
Yet, we are not likely to see Retalix announcing any initiatives into apparel any time in the near future, because it is not a part of Retalix' "genetic makeup". Retalix is of the sound opinion that its targeted market segment holds significant growth opportunity for the future, and if its stays squarely focused on this one segment, it can win the "lion's share" of the market over time, driving healthy organic growth.
When selecting a supply chain software provider, prospective buyers need to look for these characteristics, and have an exhaustive and fully executed due diligence plan for functional compatability which uses an RFI and response-selection process. Anything less will result in heightened the risk in your endeavors to select and implement the best software and services solutions possible. Adding the vertical elements to this process are key for retail food segment buyers of technology.