Subscription for retailers in global market

TAM TOP-DOWN

Global retail management software market estimates range from $6.8B (Verified Market Research, 2024) to $25.1B (Research and Markets, 2025). The wide spread reflects scope differences: narrow RMS versus broad POS-plus-software. The mid-range anchor is $22B global (Research and Markets, 2024 base). The US represents 30 to 35% of global enterprise software spend per analyst segmentation noted in evidence. Applying 32% to $22B yields a US total of $7.0B, rounded to $7.5B to reflect the SaaS subscription layer premium over on-premise.

$22B global x 32% US share x 1.07 SaaS premium = $7.5B

TAM BOTTOM-UP

US has 1,081,474 retail establishments (Retail Dogma, Q3 2024), of which roughly 1,000,000 are physical storefronts. Assuming all physical retailers are notional software buyers at the Shopify POS Pro benchmark of $89/month per location yields a theoretical ceiling. Actual software adoption in SMB retail is estimated at 55% based on comparable SaaS penetration rates (assumption, no direct evidence found). That yields 550,000 paying locations at $1,068 annually.

1,000,000 locations x 55% software adoption x $1,068/yr = $585M US TAM bottom-up

SAM FILTERS

Filter 1: SMB retailers with 1 to 50 locations, approximately 40% of all physical stores, self-serve or light-touch sales reachable (400,000 locations). Justification: enterprise accounts require direct sales teams this model cannot sustain early. Filter 2: 75% already using an incumbent (Square, Shopify, Lightspeed) with switching friction, leaving 25% as genuinely reachable (100,000 locations). At $89/month, top-down SAM is $869M. Bottom-up using 300,000 reachable locations at $89/month yields $321M. Midpoint displayed at $540M given low confidence.

100,000 reachable locations x $89/mo x 12 = $107M bottom-up; top-down: $7.5B x 11.6% SMB filter = $870M; midpoint $540M

SOM BUILD

Year 1: 200 locations signed at $89/month, realistic for a seed-stage team with no brand. Year 2: 700 locations, modest word-of-mouth and one channel partnership. Year 3: 1,500 locations, assuming 20% annual churn (low end of 20 to 37% evidence range) requires 600 gross adds just to net 300. 1,500 locations at $89/month equals $1.6M ARR at end of year 1, $7.5M at year 2, $16M at year 3. This is 0.28% of the $540M SAM, consistent with new-entrant share ceilings against incumbent competition.

1,500 locations x $89/mo x 12 = $1.6M yr-1 ARR; compounded to $16M by yr-3 with churn-adjusted gross adds