Enterprise software firm SAP is bolstering its retail business applications with pricing and product demand analysis following its acquisition last month of retail management software specialist Khimetrics.
Arizona-based Khimetrics, which has most of its customers in the US, has been growing rapidly, and marks the latest acquisition by SAP in its strategy to buy specialist companies operating in vertical markets.
Unlike Oracle, which bought major retail applications supplier Retek to strengthen its retail offering, SAP has been acquiring smaller niche firms. The Khimetrics takeover follows SAP's acquisition of point of sale software provider Triversity.
Khimetrics offers Java-based software that allows retailers to analyse how to price and position items to boost margins and optimise demand. It can also help retailers deliver profitability forecasts and implement long-term sales strategies promoting customer retention.
Cornelia Wels-Maug, research associate at analyst firm Ovum, said, "Khimetrics' pricing and forecasting technologies supplement SAP's acquisition of Canadian Triversity and extend SAP's retail offering from the enterprise back office through the retail supply chain to the store."
SAP will also be able to use Khimetrics' technology in its financial services and consumer products, Wels-Maug said.
Although Khimetrics has only 20 or so clients, mainly in the US, Ovum believes more retailers will follow the trend towards standardised software to save on the high running costs generated by in-house products.
Forrester Research said Khimetrics offered a solid pricing application, but it is still viewed as a product that fits within existing merchandising applications.
What SAP needs are functions such as assortment planning, execution, allocations and replenishment, said Forrester. Even though Khimetrics offers some of this functionality, the analyst firm believes SAP has a long way to go before it can offer a complete retail application.
The question the company faces is whether to build on Khimetrics, its own ERP platform, or acquire a merchandising supplier such as JDA, said Forrester.