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Why a Software Defined Store Strategy is Essential for Mergers & Acquisitions

Merger and acquisition (M&A) activity in retail, particularly among the grocery and convenience store verticals, continues to dominate the headlines. In grocery, we kicked off the year with the news that Northeastern grocers Price Chopper/Market 32 and Tops Markets planned to merge, followed by Sobeys decision to acquire a majority share of Longo’s and more recently we have seen the announcement of Raley’s acquisition of Bashas’ Family of Stores. Key examples in c-stores this year include 7-Eleven Inc.’s acquisition of Speedway LLC, Refuel Operating Co. LLC’s acquisition of Wag-A-Bag and Casey’s General Stores Inc. acquisition of 48 Circle-K stores and more recently a further 40 Pilot stores – just to name a few.

For the full benefits of acquisition to be realized, new stores need to be quickly and efficiently integrated into the existing store IT framework, with the same applications and systems. Any planned or unplanned downtime during the integration process can seriously disrupt the business and prolong the return on investment from the acquisition. Retailers with legacy hardware often experience post-merger and acquisition headaches.

In order to bypass these obstacles, retailers need an agile, software-defined infrastructure. One that can allow for software changes and updates without disrupting the day-to-say operations of each new store. To manage a merger or acquisition without such infrastructure in place one must rely on more traditional labor-intensive methods that are expensive, time-intensive, require more on-site maintenance and can leave security vulnerabilities.

In parallel to M&A activity, retailers must account for quickly integrating a variety of new checkout options, ranging from self-checkout and ‘touchless’ in-store technology to Buy Online Pick up at Curbside (BOPAC), in order to meet the demand of new consumer buying habits. With legacy technology built up over time, the result has often been ‘workarounds’ with the incumbent technology stack and therein lies the problem.

The intricacies of operating IT in retail stores across a large distributed estate, combined with complex checkout devices and 24/7 operations, can lead to high operational costs and a lack of agility. The level of complexity is further increased when new stores need to be integrated within an existing technology stack.

A software-defined store strategy decouples existing store hardware from the software that it runs.  The retailer’s existing in-store software, like point of sale systems, can be packaged up and rapidly pushed to devices in the acquired stores, without having to swap those devices out or run any expensive and time-consuming asset validation.  And once deployed, health monitoring and management can be carried out remotely from the cloud.

By adopting this software defined approach retailers can leverage established technologies like virtualization and containerization – that have brought immense efficiencies to cloud operators – with innovations in local store software for efficient operation and management of retail devices and touch points – old and new.

The result is a newfound agility within in-store operations, with reduced costs due to minimizing on-site intervention. It’s a game changer that can reduce the cost and time of deploying new technology into acquired stores by up to 50%.

The M&A trend in grocery and c-stores is set to continue and those that transition to a software defined store strategy will be ahead of the game. By creating the right environment for their IT infrastructure at the edge they will drive agility, consistency and efficiency and any acquisitions will deliver on their business case ahead of schedule.

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