The desire for newer, smarter, software is all that matters in the European retail sector these days, according computer systems specialist Riva Group Plc. As large scale retailing becomes heavily IT dependent, vast loyalty schemes and the clever use of individual customer profiles are what counts; while the boxes which process the data are increasingly invisible, says Riva’s chairman, Peter Giles. Riva supplies software, together with Point of Sale (POS) terminals and related networks, to retail chains that commonly have around 50 to 200 stores. The company has an installed base of some 100,000 POS terminals, but it’s had a rocky ride since 1989, when its ill fated purchase of Hugin Sweda pushed the group into reverse. Substantial losses followed, and a new management team was appointed in 1994. This year, pre-tax profits jumped 159% to 1.3m pounds on revenues up 9% to 70m pounds, and the shares trickled up 2% to close at 69 pence on Monday. Giles says his company will continue to improve margins, and he’s set the group a stiff target of 7% return on sales by the year 2000. The business proposition is to offer smarter software, which Giles sees as the driver behind the purchasing decision. On the back of a software win, Riva then hopes to gain the hardware and systems integration business. Giles says his customers also want uniformity of software. Retail groups want to offer loyalty cards which function across the whole group of stores. Hence Riva is dedicating its software development to the Windows NT environment. This contrasts heavily with Riva’s biggest rival, Siemens Nixdorf, which has a huge share of the POS hardware market. And the next big thing in customer loyalty, according to Giles, will be in-store multimedia kiosks. Customers will swipe their store card to be offered special deals based on a personalized buying history. Smart retailing has only just begun.
