VARs Targeting Retail Must Get Creative

By Jessica Davis  |  Print this article Print


Desktop-as-a-Service Designed for Any Cloud ? Nutanix Frame

While the retail market is expected to recover eventually, again spurring significant IT sales, don’t expect that recovery to be around the corner. With more tough times in store, VARs who target the retail market should look beyond tier one retailers to other possible markets.

Solution providers who specialize in the retail vertical market would be wise to lay some contingency plans going forward because the top players in their marketplace are not likely to increase their technology spending anytime soon.

That’s according to a new report from Gartner which suggests solution providers shift attention to more resilient retailers such as grocery stores or to tier two or tier three retailers.

"Double-digit growth in new projects should return within two years, and the 12- to 24- month future holds opportunities for cost optimization applications," says Jeff Roster, research vice president at Gartner, in a prepared statement. A study conducted at the beginning of 2009 by Gartner with 83 senior retail executives showed that North American retailers were severely pulling back IT spending in 2009.

"Cost removal is a key strategy in 2009 in retail, and this is particularly evident in the supply chain where uncertainty and caution are causing a market slowdown in new projects launched," Roster says. "While many survey respondents are hoping for a return to rigorous IT spending within two years, a high degree of uncertainty prevails."

A weak Christmas 2009, expected by many, could further delay any return to spending by these retailers. Roster warns that retailers may even make their cost containment strategies more aggressive and push back IT spending until stability returns.

Gartner suggests that solution providers looking to appeal to tier two and tier three retailers may consider software as a service offerings (SAAS), something that could help them get into the supply chain applications that may be too expensive for them on a license basis.

The Gartner survey also showed that retailers will pull back on new supply chain product launches with the exception of vendor managed inventory ( VMI) projects. Warehouse management systems and transportation management systems have been shelved for the duration of the recession.
Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

Submit a Comment

Loading Comments...