This headline is certainly going to raise a few eyebrows. In the last two weeks we have had 4 different conversations with retailers as part of our Strategic Operations Exchange program where best of breed vendors that we suggested for a specific solution were dismissed out of hand by the retailers. Each time for the same reason.

The debate around best of breed and software suites has been around for decades. In the ebb and flow of the industry the pendulum has swung one way or another several times. This time, however, there seems to be a difference that might be a game changer.

You might be tempted to think the reason is the rise of cloud software? Nope.

Or it might be related to the mobilization of the workforce? Nope.

Or maybe even the move to software to support Unified Commerce?….Sort of.

The reasons each of these retailers gave for dismissing vendors where they liked their point solutions was fear that they were going to be bought by a vendor that retailer didn’t want to get stuck in a relationship with going forward. This was a unifying reason for 4 different companies. “This vendor doesn’t have all the components and we are concerned they will be purchased by another vendor.”

Now mergers and acquisitions are not anything new. We’ve had consolidation in the retail technology industry ever since we’ve had technology in the industry. But in a world of Unified Commerce where the distributed order management system is becoming the core of the retail truth for eCommerce, POS and Mobile Commerce, those who have only point solutions for CRM or POS or Order Management are at a distinct disadvantage in the minds of these 4 retailers.

These retailers simply don’t want to be “stuck.” This single trend is playing a significant role in deals particularly for department stores and specialty stores.

Is Best of Breed dead? Of course not, but it is being relegated to those segments not driving toward Unified Commerce platforms or for those larger retailers who can afford to play the role of integrator rather than simply relying on an integrated suite from a single vendor?

What is clear is that if you are best of breed software provider, you better have strong partnerships with other vendors that have the components you do not have. Namely, if you are POS vendor, you need a partner in order management, eCommerce, merchandising, and analytics. And if your specialty is one of these other areas, you better have a strong partnership with a good POS vendor. Not doing so is pushing you out of several deals before things get serious.

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Retailers – want to participate in the Strategic Operations Exchange?  It’s a free consultation for you with IHL analysts on the topic of your choice.  Click here to learn more or contact us at ihl(at)ihlservices.com.