Retalix’s systems enable retailers to serve in excess of 30 million customers a day, a number that is growing continually.The next time you zip through the grocery checkout line at your supermarket, you can thank Israeli technology. The cashier behind the counter at major US retail chains like Costco, Albertson’s and 7-11 is scanning your purchases using technology powered by the Israeli software company Retalix.
Every year, around the world the numbers of grocery stores, convenience stores, and gas stations depending on Retalix technology is growing, as the company evolves into one of the dominant forces in the industry.
Retalix products are currently in operation in 25,000 stores and quick service restaurants in 44 countries around the world, from the US and Europe to Australia and Asia.
The company’s systems enable retailers to serve in excess of 30 million customers a day, a number that is growing continually. Recent strategic acquisitions in North America have positioned the company to become the leading supply chain solution provider for the grocery, convenience store and food service industries.
Retalix’s successful business strategy has been focusing on a very specific niche and filling it as best as it can.
“We concentrate completely on two areas – grocery and fuel – including the convenience stores associated with gas stations,” Danny Moshaioff, the company’s executive vice president and CFO, told ISRAEL21c. “Our main knowledge in these two areas is greater than anyone else, and this is a big advantage we have.”
Before Retalix came on the scene, he notes, all cash register computer software systems – known as ‘points of sale’ in the retail industry – were sold to stores together with the cash registers and computers themselves ? the software and the hardware were a package deal.
“The main players were IBM, NCR, Fujitsu, and they developed their own software. But of course, the software they sold only worked on their hardware. Our application, by contrast is richer and superior, and most importantly, it is hardware independent – it works on any computer,” he said.
“So once we came on the scene, the stores could buy our software, and then line up all the hardware manufacturers and make them compete for sales. We were one of the first companies to do this – and the only global company,” says Moshaioff.
Retalix, based in Ra’anana, was founded 20 years ago by two Israelis who had immigrated early in their lives from South Africa. One of them, CEO Barry Shaked, still heads the company today. Their vision was to build a competitive position by offering superior technology and greater flexibility for their customers.
Today, what was once a small and struggling pioneer is now a true market force, gaining particular strength over the past five years. In 1999, the company had $24.9 million in sales – projected 2005 sales are $185 million – a growth rate that far outstrips the rest of the industry.
The company has 1,000 employees worldwide and invests more than 20 percent of its profits back into research and development, growing by staying ahead of the technological curve.
Retalix software is designed to be modular in order to handle both small and large transaction volumes, to handle rapid scanning at the checkout line with extreme reliability and to integrate multiple store formats and hardware systems.
At the same time, the company is committed to helping stores and chains integrate e-commerce into their activities, and integrate and coordinate the systems of operations that are increasingly multinational. By designing software to be flexible across any language, culture, or currency, Retalix lowers the barriers of entry for its clients as it expands its operations into new geographic regions.
The company’s focus, Moshaioff says, is constantly on the concept of “total integration.”
“Over the last few years, we decided to develop and enrich our offering by focusing on sales of software for the headquarters of various retail chains. Until recently, each store had its own system and the systems for the headquarters with the buyers, managers, marketing people were separate and had to be coordinated. Today, when Retalix sells a headquarters solution it is integrated with the store solution at the same time.”
Retalix also prides itself on helping small and medium-sized retailers to access and take advantage of the same high level of software used by the major chains at a fraction of the cost.
In its early years, the company began with Israeli clients. The first big breakthrough was when it started selling systems in Europe through a third party company. Initially, it sold through a third party in the United States, but quickly changed strategy and set up its own US operation.
Today, with its US base well established, Retalix work closely with its American customers, giving them the necessary tools to compete effectively in the demanding modern retail environment, and a commitment to helping large chains manage and coordinate between their many branches.
Retalix managers say that they continually try to broaden and deepen relationships with their best customers, not only for the benefit of the clients, but also to gain insight into the future needs of market-leading retailers.
As they have become established in North America, they have made some recent strategic acquisitions. In January, 2004, they acquired OMI International, Inc., a leading provider of supply chain execution and warehouse management systems for the US grocery sector.
Most recently, on April 1, it was announced that Retalix would buy two American software companies for a total investment of $78 million. The two companies are Integrated Distribution Solutions, in Nebraska which Retalix purchased for $44.4 million, and TCI, based in Irvine, California, bought for $34.35m.
“IDS’s suite of enterprise solutions for distributors serving the food retail sector is a natural extension of our suite of synchronized solutions, which span the food retail enterprise from warehouse to checkout,” said Shaked regarding the acquisition. “We foresee significant synergies from combining the IDS solutions with our supply chain management applications. We believe this combination positions Retalix to become the leading supply chain solution provider for the grocery, convenience store and food service industries.”
The second acquisition, TCI, is based in Irvine, California, and offers software solutions to supermarket operators, facilitating their strategic pricing, promotion, order/vendor management and analysis capabilities.
“The combined customer base of Retalix and TCI represents many of the leading grocers in the U.S., and testifies to the strength of our respective product offerings,” Shaked said of the second acquisition.
Despite a strong and growing North American presence, “everyone knows we are an Israeli company. After all, we come in with our funny accents,” Moshaioff says with a laugh. “But really, our origins are simply no longer an issue. I think we have established ourselves to the extent that we are truly viewed as leaders in our industry and judged strictly on our merits.”
And those merits are what the shopper standing in the checkout line cares about.