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Magic Quadrant for Retail Assortment Management Applications

Published: 28 September 2017 ID: G00316142

Analyst(s):

Summary

Unified retail commerce requires increased support from physical stores for fulfillment and returns, making the management of assortments by store and channel a major challenge. This research helps retail CIOs transition to unified retail commerce through use of advanced assortment applications.

Strategic Planning Assumption

By 2021, 70% of Tier 1 multichannel retailers will have implemented advanced retail assortment management applications.

Market Definition/Description

With a track record of erratic sales results and some notable acquisitions and collaborative partnerships by Alibaba Group (Alibaba), Amazon, Walmart and others, it's clear that the hypercompetitive retail landscape has not slowed. Physical retailing is far from dead as companies like Aldi, Costco, Dollar General, Dollar Tree, H&M, Lidl, Sephora, The TJX Companies, and Ulta Beauty plan to add approximately 3,000 stores collectively. Amazon and Alibaba are expanding physical footprints, as are new online brands like Casper and Warby Parker. Customers' expectations of a unified retail commerce experience continue to challenge multichannel retailers as they pursue digital business transformation. Digital business transformation in the retail industry includes the usage of cloud, mobility, social engagement, algorithms and the Internet of Things (IoT). Taking advantage of the store base is critical for a digitalized retail experience that delights customers, but this requires a significant refinement of the assortments offered by channels and quality execution. Big data, combined with advanced analytics and algorithmic approaches, is required to create store-specific assortments that are aligned to specific customer behavior segments. As a result, this research places increased focus on advanced analytics capabilities, including:

  • Complex-event processing

  • Data/text mining

  • Forecasting

  • Graph analysis

  • Machine learning

  • Multivariate statistics

  • Network and cluster analysis

  • Neural networks

  • Pattern matching

  • Semantic analysis

  • Sentiment analysis

  • Simulation

  • Visualization

Each vendor in this research was asked to identify the types of advanced analytics used and how they are applied in the context of the assortment planning applications.

The volume of inquiries from Gartner clients indicates that the market for retail assortment management applications (RAMAs) continues to be strong, with demand from Tier 1 and 2 retailers in all segments of North America, Western Europe and Asia/Pacific. This is in response to the need to improve inventory productivity by ensuring that the assorted products are stocked in the most appropriate locations to serve customers, whether their product will be selected in store, picked up in store or shipped from the store.

Accordingly, the global RAMA market covered in this Magic Quadrant is composed of multichannel retail companies (that is, retailers with stores as well as online and mobile channels) seeking assortment management applications that address business-critical merchandising business processes. Specifically included are Tier 1 general retailers (those with annual retail revenue greater than $3 billion) as well as apparel and specialty top-tier retailers (those with greater than $1 to $3 billion annual retail revenue). There are more than 250 global retailers operating in this market. RAMA products support activities and business processes that are critical to the fulfillment of customers' needs.

The RAMA functional "footprint" primarily covers the high-level operational functions of advanced assortment planning:

  • Types of products to be purchased

  • Quantities of products to be stocked

  • Stores and channels where products will be stocked

  • When products will be ordered, shipped and distributed

  • Reconciliation with merchandise financial plans

  • Purchase order creation and management

Magic Quadrant

Figure 1. Magic Quadrant for Retail Assortment Management Applications
Research image courtesy of Gartner, Inc.

Source: Gartner (September 2017)

Vendor Strengths and Cautions

7thonline

7thonline was founded in 1999 and is headquartered in New York, New York, with global offices in mainland China. It continues to expand its presence in Asia while targeting Europe, India and the Middle East. With a focus on the apparel, footwear and accessories (AFA) industry, and industry expertise and tailored solutions designed to meet the unique planning needs of AFA retailers and branded manufacturers, 7thonline facilitates cross-channel planning and allocation for wholesale and direct retail operations. This year, it has moved to the top of the Challengers quadrant with a strong executional showing.

Strengths
  • Customer Experience: After falling to the middle range of evaluated vendors in 2016, it regained its leadership status in 2017. With an overall positive track record for service, 7thonline clearly demonstrates a commitment to serving its customers through quality technical support and comprehensive user documentation and training. 7thonline garnered significantly high reference responses, indicating a strong value perception and a well-developed contractual sales and implementation process.

  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. 7thonline is one of only five vendors in this research that supports Amazon Web Services (AWS), Google and Microsoft cloud implementations.

Cautions
  • Innovation: Although 7thonline is performing at an acceptable level, this research places a heavy emphasis on an organization's use of patents and advanced analytics. 7thonline is investing heavily in its product offering including allocation and replenishment, and leveraging advanced analytic capabilities to drive its product roadmap. We expect to see this reflected in next year's research.

  • Offering (Product) Strategy: Advanced analytics is playing a critical role in enabling advanced assortment planning. Although 7thonline is providing all the advanced analytics that are considered a must-have for this research, six of the 13 types of advanced analytics surveyed (pattern matching, semantic analysis, sentiment analysis, graph analysis, complex-event processing and neural networks) are not presently utilized within the solution.

Analyse2

Analyse 2 was founded in 2004 and is based in Espoo, Finland, with additional offices in Sweden, Denmark, the U.S., Mexico and Brazil. It has a heavy emphasis on the fast-moving consumer goods (FMCG) market, but is expanding capabilities and deals in general merchandising. It offers analytics solutions for assortments and various customer understanding and analytic applications. Analyse 2 crossed over into the Challengers quadrant in its second year of inclusion, driven primarily by improvements in Ability to Execute measures.

Strengths
  • Customer Experience: Analyse 2 led the research with many perfect scores from references on numerous service-oriented measures, including training and documentation, technical support, and meeting the customer's needs through the application. It exemplifies an exceptional customer experience that sets a high standard for competitors.

  • Sales Execution/Pricing: Analyse 2 earned top reference responses, indicating a strong value perception and a well-developed contractual sales and implementation process. This value perception is critical as retailers must achieve results from every dollar spent for business applications.

Cautions
  • Offering (Product) Strategy: Although Analyse 2 is making progress from last year's research, it still fails to provide four must-have capabilities (down from 10 last year). Missing capabilities include import optimizations from external applications, providing both online and offline planning updates, purchase order editing and upload, and sending completed purchase orders to the purchase order management system for future tracking. Vendors that enter the market from an analytics perspective frequently struggle with some required executional elements and should be investigated by retailers seeking RAMA solutions (especially fashion retailers).

  • Innovation: Analyse 2 achieved the lowest combined innovation score of the 17 vendors evaluated in this research. This was driven largely by the lack of four advanced analytics capabilities in the application (semantic analysis, sentiment analysis, graph analysis and complex-event processing), as well as the lack of recorded patents.

Board International

Board International (Board) is a software vendor headquartered in Switzerland and founded in 1994. It has multiple worldwide offices in EMEA, the Americas, Asia/Pacific and Australia. Board provides a programming-free toolkit for the development of corporate performance management, business intelligence and operational planning applications. It offers Board a solution for the support, control and management of various processes, such as reporting and analyses, budgeting planning, forecasting, profitability modeling and optimization, simulation and what-if analysis, scorecarding, financial consolidation, statutory and financial reporting, and monitoring and auditing together with all core retail planning processes such as merchandise and assortment planning, allocation, replenishment and open to buy (OTB). For retail, Board is focused entirely on the fashion industry, with many branded manufacturers and retailers as clients. Board is a solution platform that allows for analysis, simulation and planning with an all-in-one solution. Board enters the Magic Quadrant in the Niche Players quadrant and is one of four new participants.

Strengths
  • Marketing Strategy: Board has a very clear and well-articulated message of differentiation in the market, including an all-in-one platform approach that is resonating with retailers. It also has a large number of global clients.

  • Sales Execution/Pricing: Board had a very strong showing across the many factors, including pricing and contract flexibility, sales execution and value.

Cautions
  • Offering (Product) Strategy: This measure is particularly challenging for new entrants as they are confronted with nearly 60 specific capabilities, of which 33 are considered "must have." Board responded negatively for the provision of two must-have capabilities: creation and management of product flow, and support item analytics. The former should concern fashion retailers because most require flow planning as part of the assortment process. The latter is of particular concern to an all-inclusive analytics provider. However, it is of less concern to fashion retailers.

  • Market Responsiveness/Record: As a new entrant in the market, the number of large implementations of this solution is quite small. The reference feedback is positive, but large retailers should explore the available solution implementation data to ensure that the track record is sufficient.

Celect

Celect was incorporated in 2013 and is based in Boston. It provides a predictive retail analytics software as a service (SaaS)-based platform for merchandise planning and product assortment optimization. Its solutions are delivered through the Celect Predictive Analytics Platform, a SaaS-based solution that optimizes buying, merchandising and merchandise financial planning by extracting operational insight from big data. Celect was named a Gartner Cool Vendor in retail merchandising and marketing in 2017. It enters the Visionaries quadrant of this Magic Quadrant.

Strengths
  • Innovation: Celect achieved the top rating for innovation among the 17 vendors included in this research. This includes a significant number of patents and a focused approach to making the critical decisions that drive retail inventory. It was founded by and continues to be driven by Massachusetts Institute of Technology (MIT) scientists who have brought a significant level of sophistication to these retail dilemmas.

  • Operations: Celect performed well in several subcriteria, including the number of annual releases, customer-reported implementation times and the staff's years of experience.

Cautions
  • Offering (Product) Strategy: Celect operates more as an assortment optimization provider than a fully operational RAMA solution provider. As with most new entrants, Celect was challenged by some of the required executional capabilities. It achieved the lowest total rating for provision of the functional requirements as outlined in this research. This includes lacking six must-have capabilities.

  • Market Responsiveness/Track Record: As a new entrant to the market, Celect lacks a long track record and has a smaller installed base.

IBM

IBM was founded in 1911 and is headquartered in Armonk, New York. It provides IT products and services worldwide. IBM is one of the eight vendors that composed the first Magic Quadrant for Merchandise Assortment Management Applications, and it has moved further into the Leaders quadrant, reflecting improvements in the Ability to Execute axis driven by its customer experience results. IBM's customer experience performance improved for the second year in a row, earning it a spot in the top 25% of vendors analyzed herein.

Strengths
  • Offering (Product) Strategy: IBM now provides all the requirements identified for a RAMA solution, which is an improvement on its analysis from last year, and enables it to take its place among the Leaders for the provision of a complete solution.

  • Innovation: IBM remains among the top tier of vendors reviewed, and it is one of only five to utilize all advanced analytics capabilities in its RAMA solutions. In last year's Magic Quadrant, Gartner observed that "there is an opportunity for more advancements in this area, including adding cognitive capabilities with Watson." IBM has developed Watson Commerce Insights as a separate but complementary product, allowing for the incorporation of weather, social and other unstructured data into the analysis process.

Cautions
  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. At present, IBM supports on-premises and IBM cloud across all of its applications, while other public cloud options are available for some specific applications.

  • Product or Service: IBM does not offer a comprehensive set of merchandising core solutions, which is uncommon among the Leaders in the Magic Quadrant. It does, however, provide a good solution for clients that are content with their core merchandising solutions, but still want value-added capability to sit on top.

Infor Retail

Infor Retail was founded in 2002 and is headquartered in New York, New York. It provides a SaaS suite for commerce, supply chain networking and merchandising decisions to retailers, wholesalers and brands. A portion of the merchandising suite also provides solutions for retail planning, pricing, demand forecasting, and replenishment to retailers and wholesalers. Geographic reach has expanded over the past 18 months with robust in-country support. Infor Retail remains strongly positioned in the Leaders quadrant by providing all required capabilities and a strong vision.

Strengths
  • Innovation: Infor Retail is one of five vendors we researched that uses all targeted advanced analytics capabilities in RAMA processes. Through its ongoing investments in machine learning algorithms, a single machine learning demand forecasting engine serves all applications. Real-time collaborative planning across suppliers and retailers, as well as channels, is enabled cleanly in this solution.

  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. Infor Retail is one of only five vendors in this research that supports AWS, Google and Microsoft cloud implementations.

Cautions
  • Market Responsiveness/Record: Compared with the other RAMA leaders, Infor Retail does not have a long track record. However, its market responsiveness is good based on references and other subcriteria.

  • Customer Experience: Infor Retail's overall customer experience score was satisfactory. However, reference surveys indicated weakness in vendor-provided end-user training quality as well as execution based on sales expectations. Retailers should investigate these areas with Infor Retail during the RFP and contractual process to ensure adequate understanding and commitment.

JDA

JDA Software Group (JDA) was founded in 1985 and is based in Scottsdale, Arizona. Together with its subsidiaries, JDA provides enterprise software solutions worldwide. These solutions enable planning, optimization and execution of supply chain, merchandising and pricing processes for manufacturers, wholesalers, distributors, retailers, and government and aerospace defense contractors, as well as for travel, transportation, hospitality, and media organizations. JDA's position has remained largely unchanged in the Leaders quadrant, but it is farther to the right on the Completeness of Vision scale.

Strengths
  • Innovation: Innovative approaches to retail merchandising continue to be a strong area for JDA. It takes advantage of all advanced analytics capabilities in its RAMA solution except for one (sentiment analysis). Its Retail.me solution is in the process of implementation, and although it is lacking a referential track record at this point, it is an enticing view into the future.

  • Market Understanding: JDA achieved top marks for this measure, reflecting its long tenure in the retail planning and supply chain solution community. This is tied to the innovation success because it does a good job of identifying and fulfilling retailers' needs.

Cautions
  • Sales Execution/Pricing: Although JDA did not fall below an acceptable level, when ranked among the 17 vendors in this research, it was 16th. References indicated that its pricing and contract flexibility (pricing and terms) were problematic.

  • Customer Experience: This continues to be an area that challenges JDA. It only bested one vendor in this very important criterion out of the 17 evaluated. As reported in last year's Magic Quadrant, JDA made extensive changes to training materials. However, its references continue to give it low marks for them, as well as for ease of integration using standard APIs and tools. Retailers should carefully examine these prior to contractual commitment.

JustEnough

JustEnough Software (JustEnough) was founded in 1994 and is headquartered in Irvine, California. It provides demand management solutions for retail, wholesale and direct-to-consumer businesses. It also offers solutions for merchandise financial planning, assortment and space planning, clustering, profiling, allocation, demand forecasting, inventory planning, order planning and replenishment, promotion management, deal management, price management, markdown planning, and customer insights. As anticipated in last year's report, in its second year of participation in the Magic Quadrant, it has crossed into the lower left of the Leaders quadrant, but declined slightly on the Ability to Execute axis.

Strengths
  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. JustEnough is one of only five vendors in this research that supports AWS, Google and Microsoft cloud implementations.

  • Geographic Strategy: JustEnough has a robust international support footprint and a variety of customers around the globe.

Cautions
  • Sales Execution/Pricing: JustEnough trailed the other 16 vendors in this research because the specific references used for this research rated its sales and deployment support, as well as pricing and contract flexibility (pricing and terms), as being well-below average. This criterion was not a strength for JustEnough last year, and these facts may indicate a trend. Retailers should explore this during the RFP and contract process.

  • Customer Experience: Similarly, the reference set indicated that JustEnough has an opportunity to improve on several customer experience criteria, again trailing all vendors researched. Areas of opportunity included the provision of strong sales and deployment support, technical support, and training and documentation.

Logility

Logility was founded in 1996 and is headquartered in Atlanta. It provides supply chain and retail solutions to streamline and optimize the market planning, management, production and distribution of products for manufacturers, suppliers, distributors and retailers. Logility also provides an integrated suite of retail merchandise planning, assortment and allocation applications, and a suite of supply chain planning applications. First appearing in the Magic Quadrant in 2016 as a Challenger, it has moved into the Leaders quadrant after progressing along the Completeness of Vision axis.

Strengths
  • Offering (Product) Strategy: Logility is one of five vendors that fully provides all RAMA capabilities. Logility leverages 12 of the 13 advanced analytics types extensively throughout its application suite.

  • Market Responsiveness/Record: Logility has an extensive implementation footprint, and its references indicated the highest propensity to select and use it again.

Cautions
  • Sales Execution/Pricing: Logility registered some weakness around deployment and technical support, as well as integration through standard APIs, causing it to land in the bottom three vendors. Logility states that its acquisition of AdapChain in August 2016 is having an impact and it expects improvement in this area. Although it is not reaching unacceptable levels, retailers should investigate during the RFP and contract negotiation process.

  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. At present, Logility is active on AWS for cloud implementations. It has recently been certified for Azure and is in the process of readying for deployment.

o9 Solutions

o9 Solutions (o9) was founded in 2009 and is based in Dallas. It offers demand forecasting, merchandise planning and promotion planning solutions for consumer goods, apparel and retail companies. It is one of four vendors added this year, entering the Magic Quadrant as a Challenger, bordering the Leader's quadrant.

Strengths
  • Operations: o9 achieved the top rating for this measure driven by a shorter-than-average implementation time, as reported by references, as well as by strong performance across measures such as vendor-provided quality end-user training, ease of integration using standard APIs and tools, and overall customer satisfaction with the value that the product or service provides for the money spent.

  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. o9 supports AWS and Microsoft cloud implementations. It also provides an n-tier architecture.

Cautions
  • Market Understanding: o9 enjoys fairly broad market awareness. However, it did not perform well compared with its competitive set in areas such as methods to assess buyer's needs and user groups, and other ways of gathering input. Leaders in this Magic Quadrant leverage these tools extensively to formulate product strategy.

  • Marketing Strategy: o9 has limited strategic partnerships in place. Magic Quadrant Leaders are expanding their network of partnerships to better align with retailers' needs. o9 also has an opportunity to better articulate the differentiation story to the market.

Oracle

Oracle was founded in 1977 and is headquartered in Redwood City, California. It is the largest technology provider in the retail supply chain software market. Oracle's Retail Assortment Planning solution integrates with systems from other vendors and with other Oracle systems (such as Oracle Retail Allocation and Oracle Retail Item Planning). Oracle continues its relative placement in the Leaders quadrant.

Strengths
  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. Oracle provides its own public cloud options (infrastructure as a service [IaaS], platform as a service [PaaS] and data as a service [DaaS] options) and also supports AWS, Google and Microsoft cloud implementations

  • Offering (Product) Strategy: Oracle has been the leader in providing all RAMA capabilities for several years. Its leadership in the Magic Quadrant also includes the use of all 13 advanced analytics types within its RAMA application.

Cautions
  • Sales Execution/Pricing: References indicated no improvement in this measure year over year, rating Oracle below average for providing strong sales and deployment support as well as pricing and contract flexibility (pricing and terms). Gartner's extensive retail client interactions support this finding.

  • Customer Experience: Oracle is challenged in some customer experience indicators related to this research, dropping from last year's rating in this research. References rated it below average in key areas including strong technical support, meeting all expectations set during the sales process, providing quality end-user training, and ease of integration using standard APIs and tools. Oracle launched Retail Learning Subscription (RLS) as its go-forward strategy for all solution-related content in December and expects this to help correct this perception.

Periscope By McKinsey

Periscope was established in 2007 as a wholly owned subsidiary of McKinsey & Co. The Periscope Assortment Advisor and Customer Insights applications were the result of McKinsey's consulting industry experience converted into a productized application suite to enable assortment management. Periscope remains in the Challengers quadrant, but has progressed significantly year over year along both axes.

Strengths
  • Sales Execution/Pricing: Periscope achieved high marks across all subcriteria for sales and pricing execution. References stated that Periscope provided excellent sales and deployment support. This is a 19% improvement over last year's result.

  • Customer Experience: In another reversal from last year, Periscope's customer experience performance improved 28%, landing it among the top three vendors.

Cautions
  • Offering (Product) Strategy: Periscope provides most capabilities. However, it fails to provide one considered must-have (provide capability to create, modify, copy and delete purchase orders) and only partially provides some others. Presumably, some of this is related to Periscope's emphasis on consumer goods products. Retailers will need to carefully evaluate use cases to ensure there are no gaps.

  • Market Understanding: Although it is improving over last year's results, Periscope showed weakness among its competitive set in several subcriteria, including methods to assess buyers' needs, user groups and other ways of gathering input, and implementations based on user groups' and retailers' input.

Relex Solutions

On 7 June 2016, Relex Solutions (Relex) announced the acquisition of Galleria RTS. The combination of Relex's supply chain planning solution and Galleria's space and assortment planning solution created an integrated retail and supply chain planning system that includes demand forecasting, automated replenishment, and space and assortment planning. The Relex name replaces Galleria in this 2017 Magic Quadrant, and it remains a Challenger having moved farther to the right on the Completeness of Vision axis.

Strengths
  • Market Responsiveness/Record: Relex reached the top three for this measure because it registered strong results across all subcriteria. References indicated a strong willingness to use the vendor in the future. It has particular strengths in the grocery and fresh foods.

  • Sales Execution/Pricing: Relex rated consistently well across all subcriteria, including pricing and contract flexibility as well as sales and implementation support.

Cautions
  • Product or Service: Overall, its product or service score remains strong. However, Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. At present, Relex supports only AWS for cloud implementations.

  • Innovation: Usage of advanced analytics weighs heavily in the innovation results. Relex uses seven of the 13 advanced analytics types in its RAMA solutions, which is well below the average of the competitive set.

SAP

SAP was founded in 1972 and is headquartered in Walldorf, Germany. It operates worldwide as an enterprise application software and database company, with an increasing emphasis on software and SaaS applications, and is one of the market leaders in retail ERP. SAP offers many merchandising solutions, including financial planning, demand planning, allocation and replenishment. SAP released SAP Assortment Planning for Retail (APR) near the end of 2015, and as a result, it is one of the four new entrants in the 2017 Magic Quadrant, starting in the Challengers quadrant.

Strengths
  • Product or Service: The modular application structure that SAP is building out for retail merchandising is built on the foundation of SAP's Customer Activity Repository (CAR), and utilizes SAP Hana for in-memory computational capabilities. This allows for the use of vast data stores consistently across merchandising and marketing activities, thereby helping to build a more customer-centric approach for retail.

  • Customer Experience: SAP rated high across numerous reference inputs around customer experience, including training and documentation, technical support, integration support, and value. Note that this is reflective only of the application evaluated.

Cautions
  • Offering (Product) Strategy: SAP's RAMA solution is new to the market. Although it provides all must-have capabilities except for one (online and offline planning updates), it only partially supplies 4 others. As the solution evolves through additional implementations (with what appears to be a promising roadmap), this should improve. However, retailers must carefully evaluate the completeness to determine fitness for use.

  • Market Responsiveness and Track Record: SAP has a long history in supporting retail ERP and core merchandising functions. However, it does not yet have a significant, established track record for its APR product.

SAS

SAS was founded in 1976 and is based in Cary, North Carolina. It leverages business intelligence and analytics solutions as a foundation for its retail solutions, which make use of real-time analytics for SAS's merchandising assortment planning solution. SAS is well-placed in the Leaders quadrant, and has progressed further along the Ability to Execute axis.

Strengths
  • Product or Service: Gartner clients show a growing interest in public cloud options. This research places a heavy emphasis on the provision of multiple public cloud implementation partners. SAS supports AWS and Microsoft cloud implementations.

  • Offering (Product) Strategy: SAS provides all RAMA application capabilities, and as one of the Leaders from the inception of this Magic Quadrant, it is well-placed to provide a solution for retail. It leverages a long analytics history by utilizing all advanced analytics types as part of the solution. SAS incorporated the Viya platform to include analytics in its RAMA product to improve the cloud availability of analytics.

Cautions
  • Sales Execution/Pricing: Although it is still at an acceptable level, SAS saw an 11% decline in this measure because references rated it less than average for pricing and contract flexibility.

  • Operations: SAS references indicated an implementation time that is slightly longer than average. In addition, they rated ease of integration using standard APIs and tools as less than average.

Softvision

Softvision was established in 1994 and is headquartered in Oakland, California. In June 2016, Software Paradigms International (SPI, founded in 1994 and headquartered in Atlanta) announced a merger with Softvision. In merchandising, Softvision offers demand forecasting, assortment planning, allocation, inventory management and purchase order planning. For the purpose of this research, Softvision has replaced SPI in the 2017 Magic Quadrant. It continues as a Niche Player and has also moved up the Ability to Execute axis.

Strengths
  • Sales Execution/Pricing: Softvision performed very well across all subcriteria for sales execution and pricing, including reference responses regarding pricing and contract flexibility.

  • Operations: References reported a shorter-than-average implementation time of just eight months. Additionally, Softvision received high marks for vendor-provided quality end-user training, ease of integration using standard APIs and tools, and perceived value.

Cautions
  • Innovation: Softvision takes advantage of nine out of 13 types of advanced analytics in its RAMA solutions, which places it in the midrange across all vendors. There are many changes planned in a promising roadmap for innovation. However, at this time, there is no evidence of this within the RAMA solution.

  • Market Responsiveness/Record: Softvision has low Tier 1 penetration and may not be right for larger implementations.

TXT e-solutions (TXT Retail)

TXT e-solutions is headquartered in Milan, Italy, and through its TXT Retail business unit, it offers solutions that provide integrated and collaborative end-to-end retail planning, product life cycle management (PLM), and supply chain collaboration for the luxury, fashion and specialty retail sectors. On 24 July 2017, Aptos (headquartered in Atlanta) announced that it would acquire TXT Retail. As of this publication, no substantive changes have occurred, and TXT Retail continues to operate as a planning, PLM and supply chain specialist. TXT Retail remains relatively stable in the Leaders quadrant with incremental improvements in the Ability to Execute and Completeness of Vision axes.

Strengths
  • Offering (Product) Strategy: TXT e-solutions was one of the eight vendors included in the first Magic Quadrant for merchandise assortment management applications, and it has progressed consistently since then, providing all capabilities for RAMA solutions. Its latest release added visual planning capabilities and in-memory computing.

  • Market Responsiveness/Record: TXT e-solutions has a growing installed base, and references indicate a very high willingness to use the vendor again. The pending Aptos acquisition of TXT Retail expands the potential reach of TXT Retail, but it is too early to be sure exactly how the combination will perform.

Cautions
  • Operations: References indicate only a slightly longer-than-average implementation time of 9.2 months. However, they also rated TXT Retail below average for ease of integration using standard APIs and tools and overall value.

  • Innovation: TXT Retail performed in the midtier of vendors researched for this innovation measure. However, Magic Quadrant Leaders need to be more aggressive in their use of innovation to drive differentiation in the market. TXT Retail would benefit from more focus on innovation to drive the future of RAMA forward.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant may change over time. A vendor's appearance in a Magic Quadrant one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

Board International, Celect, o9 Solutions and SAP were added.

Dropped

Island Pacific, previously a Challenger in the 2016 Magic Quadrant for Merchandise Assortment Management Applications, and Nielsen, a Niche Player, declined to participate in this research by not providing requested responses or references.

Other Vendors to Consider That Did Not Qualify for Inclusion

A number of interesting vendors participated in the Magic Quadrant process, but finally did not meet the criteria for inclusion in the Magic Quadrant:

  • Symphony Gold: ·Symphony Gold delivers a differentiated offering in relation to capabilities and approach market, including a retail cloud that supports supplier and retailer collaboration. It also has extended capabilities around space management, including virtual reality capabilities that many grocery and consumer goods industry retailers will find appealing. It covers all major geographic regions, through either direct or partner operations, and generates thought leadership in the area of category planning (including assortment optimization). The reason for exclusion is related to the Tier 1 customer criteria. However, it indicates implementations in progress that may allow inclusion in 2018.

Inclusion and Exclusion Criteria

To be included in this Magic Quadrant, vendors must cater to the majority of the functional requirements outlined by Gartner. Only those vendors that address the needs of the competitive retail market received consideration.

Worldwide, many vendors address retailers' needs for assortment planning through a variety of solutions. However, most of these implementations are too small in terms of company size or application scope, or have too small a geographic reach to be of interest to Gartner's retail clients. We evaluate only those applications that are completely implemented and in full production, and have at least two Tier 1 multichannel retailers, as follows:

  • Applications must support the majority of the functional requirements, including must-have capabilities that Gartner has identified for general merchandise retailers. Retail implementation criteria are:

    • Tier 1 retailers with revenue greater than $3 billion or specialty top-tier retailers (those with greater than $1 billion to $3 billion annual retail revenue)

    • Retailers from any geographic region

    • Multichannel retailers with stores, websites and mobile channels

Evaluation Criteria

Ability to Execute

This axis evaluates software application vendors on the quality and efficiency of the processes, systems, methods or procedures that enable their performance to be competitive, efficient and effective, and to positively affect revenue, retention and reputation. For retailers seeking RAMA software, a vendor's Ability to Execute is primarily a combination of factors driven by application functionality, architecture and performance, and the ability to meet customer expectations during delivery and operation. Software application providers are judged on their ability and success in capitalizing on their vision. Our evaluation of a vendor's Ability to Execute is based on the following criteria:

  • Product or Service: This is the breadth and availability of the vendor's products that compete in and serve the market.

  • Overall Viability: This is product quality and consistency, as well as the vendor's financial strength, including the likelihood of its continued investment in RAMA software for the Tier 1 retail market. In addition, this includes advancing the state of the art within the provider's portfolio of products.

  • Sales Execution/Pricing: This means the capabilities of presales structures and management activities, including pricing and negotiation, as well as the overall effectiveness of sales channels.

  • Market Responsiveness/Record: This is the vendor's ability and responsiveness in meeting changing market dynamics.

  • Marketing Execution: This is market share (and mind share) in the global RAMA market, including market traction, in the past 12 months.

  • Customer Experience: This is the ability to provide technical and relationship support and services that drive customer satisfaction.

  • Operations: This is the structure that is put in place to effectively meet organizational goals and commitments.

Table 1.   Ability to Execute Evaluation Criteria

Evaluation Criteria

Weighting

Product or Service

High

Overall Viability

High

Sales Execution/Pricing

Medium

Market Responsiveness/Record

Medium

Marketing Execution

Medium

Customer Experience

High

Operations

Medium

Source: Gartner (September 2017)

Completeness of Vision

This axis evaluates software application vendors on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and on how well those statements map to Gartner research positions. RAMA providers are rated on their understanding of how market forces can be exploited to create opportunities. For retail companies seeking RAMA software, vendors' Completeness of Vision is primarily a combination of vendor domain expertise in different retail markets and customer segments, an appropriate go-to-market strategy, and a focus on innovation in product functionality and enabling technology. Our evaluation of a vendor's Completeness of Vision is based on the following criteria:

  • Market Understanding: This is competitive position, market knowledge and mechanisms for customer feedback.

  • Marketing Strategy: This is the ability to articulate market direction and aligned product and service offerings with RAMA market requirements.

  • Sales Strategy: This is the vendor's ability to work with customers through its sales force and sales tools.

  • Offering (Product) Strategy: This is a vendor's strength of R&D, capability in product design and ability to offer image stability.

  • Business Model: This is the soundness and logic of the underlying business proposition.

  • Vertical/Industry Strategy: This is the ability to provide the market with a vertical-specific product and service that have different levels of contestability and serve different segments (for example, grocery, fashion apparel and home improvement).

  • Innovation: This is the ability to have investment resources, expertise or capital for consolidation, and defensive or pre-emptive purposes to address emerging market needs.

  • Geographic Strategy: This is the ability to provide products and services globally.

Table 2.   Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

Medium

Sales Strategy

Low

Offering (Product) Strategy

High

Business Model

Medium

Vertical/Industry Strategy

Medium

Innovation

High

Geographic Strategy

Low

Source: Gartner (September 2017)

Quadrant Descriptions

Leaders

Leaders in the RAMA market have an extensive client base that crosses multiple geographic boundaries and retail industry segments. They can support SaaS and cloud implementations. Additionally, they are known for their levels of innovation, integration and delivery capabilities. Leaders also are very knowledgeable about assortment management best practices, they supply all must-have functionality and they exhibit a high level of customer satisfaction. They also possess evidence of operating in a unified retail commerce model.

Challengers

Challengers have a high Ability to Execute, and provide a good-quality product for use in retail assortment planning. In some cases, they are slightly less innovative; however, with some effort, they could easily move into the Leaders quadrant.

Visionaries

Visionaries in the RAMA market excel at innovation, including customer-initiated efforts that lead to new and better methods of achieving advanced assortment planning. These vendors seek to extend planning capabilities further back into the supply chain through integration with other systems, such as PLM. With an enhanced focus on execution, these vendors can move into the Leaders quadrant.

Niche Players

Niche Players have limited capabilities, display less emphasis on innovation and customer service, or focus exclusively on one retail industry segment. They also may exhibit a limited Ability to Execute due to corporate factors driven by a disrupted or ineffective strategy.

Context

CIOs, as the experts in technology, must be at the forefront of merchandising transformation. This Magic Quadrant will help them navigate the marketplace. Business leaders will appreciate and look to technology teams for leadership, and as such, CIOs must be prepared with a thorough understanding of the business issues that are driving customer centricity in the digital retailing environment.

CIOs should involve merchandising leaders in the mapping of as-is and to-be merchandise assortment processes, in the development of the RFI, and in the vendor selection exercise. The mapping process serves as the launching point for visioning and preparation of the RFP, and also serves as the initial phase of change management. If this mapping isn't fully completed toward a to-be vision, then it guarantees failure. First implementations of this type are fundamentally different from what most individuals on the merchandising business teams will have previously experienced. Selecting an assortment application vendor will require business processes to change, rather than application flexing to align with existing business processes.

Market Overview

The RAMA market has a limited number of vendors providing RAMA capabilities to Tier 1 retailers. Assortment management is a required discipline; however, adoption of these new technologies remains a challenge for most retailers. We expect continued interest and growth in the market as other vendors enter or expand their offerings, and as new providers emerge to challenge the leaders.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.