53.2 F
Laguna Hills
Thursday, Mar 28, 2024
-Advertisement-

Epicor’s Push Into Retail Software Pays Off

Irvine’s Epicor Software Corp. likes the sound of a ringing cash register just as much as its big retail customers.

The company, which makes enterprise resource planning software that helps midsize companies manage accounting, customer contacts, inventory, sales and other tasks, is seeing growing sales to specialty retailers and department stores.

Last year, retail software sales accounted for more than a third of its $430 million in revenue.

It’s a fast-growing part of Epicor’s business, which overall has seen a bit of a drop of late as corporations closely watch their spending.

Epicor’s shares are down some 40% for the year on a recent market value of about $415 million.

Its retailer customers are still buying.

“One of the surprising things is that retailers are still spending money even though their businesses are under pressure now,” said Peter Goldmacher, analyst with Cowen & Co. in New York. “These guys have a nice chunk of their business that comes from retail.”

They also tend to be pretty loyal customers, according to analyst Richard Davis of Needham & Co. in New York.

“Retailers aren’t often on the front edge of the adopters, but the good news is that if you have an attractive and functional piece of software you can really run the tables,” he said.

Epicor’s retail software is used by department stores such as J.C. Penney Co. and Dillard’s Inc., and a slew of specialty retailers including Ann Taylor Stores Corp., Nike Inc., Giorgio Armani SPA, A & #233;ropostale Inc., American Eagle Outfitters Inc. and others.

“Everything we do is to drive a retailer’s top-line sales, minimize labor and reduce costs,” said Greg Donnelly, vice president of sales for Epicor’s retail division in Montreal. “We know that labor is the biggest cost to the retailer.”

The software falls into three main categories: the cash register, store planning and marketing.

The first revolves around the checkout,processing sales, scanning items, setting up layaway programs and handling returns.


Software Breakdown

The software helps workers locate an item if the store is out of stock and ship it to customers.

It keeps track of inventory, audits transactions to prevent fraud and theft by employees and synchs cash register data with the company’s accounting department.

The second big area is in merchandise planning,a biggie for clothing retailers.

The software analyzes sales data to pull out bits of information, such as popular colors, sizes and styles, to help buyers better predict what items will sell best at different locations.

“It’s important for the buyers at the company to be able to intelligently purchase the merchandise so they know what to order for the upcoming season,” Donnelly said.

It also handles some behind-the-scenes functions including purchase orders and making sure sold out products get sent from a company’s warehouses to the stores.

The last piece builds on Epicor’s long history of selling what industry insiders call customer relationship management software.

“It tracks transactions by customer and can allow a retailer to do more marketing campaigns based on their customer base,” Donnelly said. “It allows employees to pull up a customer’s history and see what styles they prefer or what size they wear. It also helps retailers cater to repeat customers on their birthdays and anniversaries and launch product marketing campaigns on the demographic level.”

Epicor made its first big push into retail in 2005, when it paid $121 million for Newburgh, N.Y.-based CRS Retail Systems Inc.

In February, the company closed a second acquisition to beef up its retail unit,its $314 million buy of Britain’s NSB Retail Systems PLC.

The company’s retail division counts some 800 workers split between Montreal and New York that report to the Irvine headquarters.


Software as Service

The newest push for Epicor is getting into what’s known as “software as a service,” which is essentially leasing a bundled package of software.

Stores pay Epicor a monthly or quarterly fee to license and run the software.

Unlike other sales to big customers, Epicor’s software as a service offering isn’t customized.

These customers “don’t have a large budget, but they do need the technology,” Donnelly said. “We’ve done quite well with it in the last few years.”

Epicor recently teamed up with IBM Corp. to sell Big Blue’s cash register computers loaded with a suite of Epicor’s retail software.

The move isn’t that big of a stretch for Epicor, which already was a big reseller of IBM’s PCs for stores.

“It’s very strategic for us,” Donnelly said. “Both companies we bought have relationships with IBM. We resell their hardware and they sell our software.”

The move gives Epicor a well-known backer.

“It put us in a very wonderful position to leverage that volume business and get closer to them,” Donnelly said.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-