Re-examining the Retailer and Tech Vendor Symbiotic Relationship

RIS News – Your business is what you do. Your reputation is what people think you do. This is a harsh reality and one that can be painful to retail tech companies built on the classic sales-organization model. Solution providers like these incent top executives to give A-level priority to hitting sales goals and B-level priority to meeting the needs of their customers. Clearly, customers can feel this disconnect and the result will have a negative impact on a solution provider’s reputation.

Another source of friction is produced by the unique nature of retailers themselves, who are probably the world’s leading experts in the art of customer satisfaction. Retailers know what customer satisfaction should be after a product is purchased, because this skill is essential to the successful operation of their businesses. When they don’t feel a tech vendor is delivering customer satisfaction after they have made a purchase (often costing millions of dollars) they can become harsh critics.

EXCERPTS FROM THE REPORT:

Page 4: Building the Retailer/Tech Vendor Partnership

The relationship between solution providers and retailers has evolved from a basic buyer and seller agreement into a true partnership. To meet continuously changing customer demand and behavior, both vendors and retailers must innovate at a breakneck pace or risk being lapped by the competition. That level of technological churn has forced retailers and vendors into a symbiotic relationship with co-innovation at the forefront.

While vendors have always been willing to adapt and modify their solutions to meet the needs of their retail clients, those modifications are happening much earlier in the process now and are becoming standard operating procedure. In fact, many of the ideas and requests retailers make of their solution providers are implemented and evolve into the vendor’s standard offering.

“Historically, vendors collaborate with retailers to design software features to address their specific needs, which results in custom modifications,” says Ken Morris, principal, BRP. “Vendors typically evaluate the custom modifications to determine which features have broad enough appeal to incorporate into their base code. Vendors and retailers have not generally been responsive to customer expectations – and that is what ultimately counts.”

Page 5: The Software as a Service Era

The move to the Software as a Service (SaaS) model, often referred to simply as the cloud, has toppled the traditional vendor/retailer relationship.

Traditionally, a retailer would pay an upfront fee to deploy an on-premise solution, locking them into that software for the long term. The retailer would have to endure any shortcomings of the solution, go into their pockets to purchase an upgrade, or pay for a new solution (a costly undertaking and one that would likely only be attempted toward the end of the technology’s lifecycle).

“For vendors, the money has always been in selling multiple licenses (one for each store) to maximize revenues,” says Morris. “That mentality will be the downfall of some vendors. The winners will be the ones that embrace the cloud software model.”

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