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Back to the Store New Opportunities for Retail ISVs

With the change in consumer palettes for healthier food options, smaller convenience stores and retail outlets are seeing a surge in demand for healthy, organic, hot and cold food, and grocery choices. During the 1990’s, multinational grocers took over the retail market and most believed that the small family-owned, mom & pop shops would die out. The presumption was that in spite of cultural differences, full line supermarkets and hypermarkets would flourish.

Fast forward to 2019, and globally, traditional trade has been resilient. One of the reasons for this lies in the purchasing behavior of customers: hypermarkets store groceries and daily requirements. But finding them, buying them and transporting them is a hassle in comparison to picking up stuff from a local grocery store.

According to Nielsen’s 2018 National Grocery Shoppers Survey conducted in partnership with the National Grocers Association (NGA), about 21% of grocery dollars go to independent grocery stores. While that may be a small percentage of the overall grocery market, among people who classify themselves as independent shoppers, Nielsen found that loyal, independent grocery shoppers spend more than 40% more on groceries than the average shopper.

The New York Times in its article `The Freshest Ideas are in small grocery stores’ says, `Most North Americans still buy their food at the classic supermarket, with its wide aisles and seemingly limitless choices. But stores like Kroger, the nation’s largest chain with more than $105 billion in sales in 2017, are being cannibalized by a host of discount competitors like Dollar General and Aldi on one side, and by the growing dominance of Amazon and online delivery on the other’.

While the hypermarkets are not perceived as an ideal choice for dailies, there is also a growing demand for all things natural, healthy, and fresh. Food-shopping habits are mostly localized, and people prefer to prepare their meals and cook more.

Small retailers can use this change in buyer behavior to their advantage. To differentiate themselves in the eyes of their customers, they need to think differently. Think differently not in terms of food or products but more in terms of understanding the way customers have changed and matching their expectations in terms of product options, turnaround time, and pricing. This would require retailers to revisit their existing applications and modernize them to match requirements. For example, how would a small supermarket promote his products during the holiday season? Could he use a mobile app for advertising to a target audience?

Similarly, there are several technology options available for retailers to maximize the growing surge in requirements:

Supply chain management – the supply chain is often seen in terms of large manufacturing chains. However, for retailers, a customized supply chain application will ensure that customers always get what they want, when they want and how they want it.

The supply chain also helps with maximizing the available space by stocking fast moving products and reducing stocks of slow moving products. Freed up space translates into new business opportunities for retailers.

Similar to the example of supply chain software, smart and highly customizable technology that captures SKUs and pricing at the POS is essential to success for retailers.

According to Deloitte, small retailers are holding back from digital adoption. However, the benefits of adoption are significant:

  • Earned two times as much revenue per employee
  • Experienced revenue growth over the previous year that was nearly four times as high
  • Were almost three times as likely to be creating jobs from a year earlier
  • Had an average employment growth rate that was more than six times as high

For ISVS, this is an opportunity as the reason for holding back is not as much about budget as about relevance. How will technology benefit us? How will it be useful for us? How about privacy and security?

Software Unification

Most retailers already have an application in place. Adding new features or integrating new functionalities is an area that needs to be explored. “Connecting software to work with other software is hard,” said Roy Mann, CEO, and co-founder for “There is going to be a breakthrough with integration platforms that will allow any software to connect well with any other software.”


Many small businesses believe that they are immune to cyber attacks. However, research indicates that over 60 percent of attacks occur at small businesses. Viewing security from an enterprise perspective is essential for retailers going forward.

Personalized marketing

Along with shopping, customers look for personalized services which only smaller supermarkets can give. By using technology, for marketing, customized services can be taken to the next level. Chatbots, for example, will be able to guide buyers on their online purchases.

Artificial Intelligence and SMBs

“While artificial intelligence may sound like something that only enterprise companies use, in 2019 we’ll see it make big inroads into small businesses,” said Meredith Schmidt, executive vice president, and general manager of small business and essentials at Salesforce. “AI will help small businesses offer more personalized experiences to their customers by maximizing their time and automating manual tasks.”

To summarize, for ISVs, size should not matter, and the challenges they face in their businesses are similar. However, while larger retailers display a technology dependency, for small companies, it is still early days. The point to be noted is, the opportunities are there!


Back to the Store – New Opportunities for Retail ISVs