Q&A: Microsoft Partnering with ISVs to Meet Needs of Small and Midsized Retailers

Dale Sleppy, Microsoft retail industry marketing manager. Click image for high-res version.

Bob Derr, Microsoft U.S. director of industry marketing.

NEW YORK, Jan. 12, 2004 — Retailers flocking to the National Retail Federation’s annual conference in New York Jan. 11-14 will find a number of Microsoft solutions designed specifically for small and midsized retailers.

Microsoft’s Small and Midmarket Solutions & Partner (SMS & P) group has been actively focusing on the small and midsized retailer business as part of a broader effort to help ensure these companies are getting the specific technology tools they need to grow their businesses.

To learn more about the SMS & P group’s advances in the retail space, PressPass spoke with two members of Microsoft’s SMS & P group: Bob Derr , director of industry marketing for the United States, and Dale Sleppy , retail industry marketing manager.

PressPass: Why does Microsoft consider it important to focus on specific industry needs in the small and midsized business space?

Derr: Our small and midsized customers and partners have told us that they have challenges unique to the size of their business as well as their industry. We know it’s important to take a closer look at our customers’ needs unique to their respective industries and communicate the value Microsoft solutions can deliver to help them resolve their challenges and continue to realize their full potential. One way we are doing this is by working with Independent Software Vendors (ISVs) in specific industries who build tailored solutions on top of the Microsoft platform, which includes Microsoft servers, productivity solutions, enterprise resource planning (ERP) systems and customer relationship management (CRM) systems.

We have heard in the past that we were not doing as good a job as we could have been understanding our customers’ business needs. To help resolve this, we brought together a team of people in the SMS & P organization that are focused on the needs of our small and midsized business customers as they pertain to their unique business, size and industry. All of us on this team are focused on ensuring our customers are aware of the tools and support resources Microsoft provides to help them get their jobs done faster and more effectively. Microsoft is focusing on several industries in the small and medium business market including retail, manufacturing, distribution and professional services.

PressPass: Looking at retail specifically, what

are the particular technology need for small and midsized retailers?

Sleppy: Small and midsized retailers definitely have unique business needs that demand solutions tailored to their industry. Retail is the largest industry in the U.S. in terms of number of establishments, according to the U.S. Census Bureau, which means there is a lot of potential to help small and midsized retailers grow and compete in the global economy.

We have heard from small and midsized retailers that they are looking for an integrated solution set that will enable them to manage all aspects of their business while staying connected to their customers and suppliers. We see this need as an opportunity to provide a complete stack of solutions for those retailers, all the way from the operating system to the back-office accounting to the point-of-sale solution.

PressPass: What history does Microsoft have in serving the small and midsized retail industry and how will Microsoft continue to improve on the delivery of solutions to this market segment?

Sleppy : We’ve been selling classic Microsoft products — servers, operating systems, office applications — to small and midsized retailers for years Microsoft is now selling business applications to small and midsized retailers, including back-office ERP solutions and CRM solutions.

One example of Microsoft’s efforts in the small and midsized retail space is the acquisition of a point-of-sale product in 2002, now known as Microsoft Business Solutions Retail Management System. Since then, the Microsoft Retail Management System has been developed with the needs of small and midsized retailers in mind into the comprehensive solution it is today.

With this acquisition, Microsoft took a step deeper in focusing on the needs of small and midsized retailer and on the integration with back-office ERP products. Microsoft will continue to serve the needs of the small and midsized retail space by extending its offerings with ISV partnerships, delivering cost effective, dependable solutions for customers.

PressPass: What are the needs of small and midsized retailers?

Sleppy: In talking with our customers and partners, we’ve found that small and midsized retail owners are primarily concerned with keeping costs down and providing superior customer service. They want affordable, dependable and complete technology solutions that give them greater visibility into their inventory and customer buying patterns.

These store owners are also often transitioning from a very hands-on position to a more managerial position as their businesses grow. So instead of always being on the floor working directly with merchandise and customers, they’re busy trying to manage employees and operations. Now more than ever, they need to have access to the sales, inventory and customer data so they can make better decisions.

Our customers in the small and midsized retail sector also tell us that one of their big competitive advantages over larger competitors is personalized customer service. Having data about their customer buying histories is important because they can use that data to make recommendations based on past purchases, make up-sell suggestions and reward their top customers. Having customer data on hand is very empowering to the retailer; it can give them an advantage over a larger retailer who is selling on volume.

PressPass: How is Microsoft helping to address these needs?

Sleppy: Our vision for providing technology to small and midsized retailers includes solutions that enable smarter inventory management, better customer service, easier collaboration with suppliers, marketing automation, mobile form factors and customer payment flexibility and efficiency, to name a few. We are delivering on this vision today with integration between Microsoft Retail Management System and our back-office ERP products. This integration helps to solve the inventory management issue for small businesses, allowing retail owners to gain greater visibility into this area of their business.

In addition, the product has elements of CRM, reporting, analysis, marketing automation and other functionality that is important to retailers, making Microsoft Retail Management System a comprehensive solution designed specifically for the small and midsized retailer. Some of our other classic products help solve the inventory management and reporting and analysis pain as well. For example, Microsoft SQL Server allows the retailer to consolidate much of their data into one central location and manage inventory from a central database.

Small and midsized retailers are also looking for technology that is user friendly and easy to learn, given the amount of employee turnover in the retail industry. Extended training time translates into productivity downtime and therefore diminishing profitability. Our solutions offer a familiar user interface, which can decrease the learning curve and training time.

PressPass: Can you give specific examples of customers that have benefited from Microsoft’s focus on small and midsized retail ?

Sleppy: Action Performance is a licensed motorsports merchandise retailer that has 33 trailers that go to auto races across the country to sell products representing different drivers. Action Performance was challenged by a lack of visibility into their inventory and slow purchase transaction times, which kept customers in line for too long. They turned to Microsoft’s point-of-sale solution (Microsoft Retail Management System) which has increased their sales by enabling them to get customers through the lines before the races start and the customers’ attention moves to the action on the track. It also enabled them to centrally track merchandise so they know what products are selling well for individual trailers, and can better anticipate when a trailer is about to go out of stock.

Another example is the Philadelphia Eagles, of the U.S. National Football League. They’re running our Microsoft Business Solutions Great Plains accounting system and recently installed a point-of-sales system provided by a Microsoft ISV. The point-of-sales system integrates with the Microsoft Great Plains back-office system, and has made it possible to go from selling nearly US$10,000 worth of merchandise at four separate retail stands in the stadium to selling about $160,000 worth of merchandise per game in 20 stores throughout the stadium. For the Philadelphia Eagles, speed of transaction and inventory tracking are important. With an integrated solution, the Philadelphia Eagles are now able to track inventory at a near real-time basis. At any point during the game they can tell how much merchandise has sold and what items are running low so they can replenish.

PressPass: What is the opportunity for ISVs as a result of Microsoft’s focus on the retail industry?

Sleppy: There’s a great opportunity for ISVs to develop custom solutions on top of the Microsoft Retail Management System that are designed with a specific retail sub-segment in mind. . For example, there are more than 80,000 convenience stores in the US. While the Microsoft Retail Management System is an excellent solution for many of these stores, there’s an opportunity for ISVs to provide a solution that integrates the fuel pumps with the point-of-sale system. Microsoft’s retail focus will also open up opportunities in the midmarket segment where retailers are in need of ISV solutions such as merchandise planning, forecasting and price optimization that can integrate with Microsoft’s accounting and analytics products to form a complete, integrated system.

PressPass: What opportunities does the industry focus present for Microsoft partners?

Derr: Microsoft provides partners with a robust set of solutions running on an integrated Microsoft platform designed to meet the specific needs of small and midsized customers. Couple that with our ISV Partner offerings to address the special needs of certain industry segments and we offer a compelling opportunity for our partners. We’ve found that industry partners can be more effective if they gain a deep knowledge of and focus on a particular industry. That’s why we’ve developed tools, programs and industry insight training to give our partners a competitive edge over other organizations that may just be dabbling in a certain industry. The combination of strong solutions and deep industry insight and programs is a winning combination for Partners.

Sleppy : Partners are the critical
“last mile”
for delivery of our solutions. Given our focus on retail and the massive size of the small and midsized retail market, the need for industry partners to market and sell our solutions in this space will grow. We’ve seen a number of our partners focused on core Microsoft financial packages move into this space. And, we’ve been very successful attracting new partners for the Microsoft Retail Management System. I see this trend continuing given our strong product offerings backed by growing awareness and credibility that we are driving in the retail space.

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