The economic policies of the last ten years, directed to a significant income distribution in the country, produced huge heating in domestic consumption and continuous growth in the volume of retail sales, with the consequent increase of their relative importance in the Brazilian GDP. Today, retail is the private sector of the economy that most employs in Brazil, and one of the most dynamic and competitive, that searches for solutions that attend to the changes of buying behavior of millions of consumers connected and each day more informed, in every corner of the country." Prof. Jacques GelmanCoordinator at GVcev – Center of Excellence in Retail of FGV-EAESP.

Linx works with main retail vertical markets offering different software solutions, which have been designed specifically for the sector, providing unified and actionable data between unified stores, merchandising and financial operations. The Company also has its own customization team, if changes are needed in the systems that are contracted by each customer.

Among the retail vertical markets served are: clothing and footwear, vehicles and automotive parts, home improvement, health and beauty, personal goods, electronics and applications, supermarkets, franchises, food service chains, gas stations and convenience stores, the latter recently part of the strategy of the Company through the acquisition of the assets of Seller.

Today, Brazil is the fifth largest economy in the world and accounts for 45% of the GDP in Latin America, according to 2011 data from the IBGE. For a decade the country has been growing and has offered relative economic stability, resulting in reduced interest rates and low rates of inflation and unemployment. One of the main factors that boosted the enrichment of Brazil was a huge expansion of credit, where the offer has increased 20.3% annually over the past five years, from R$ 936 billion in 2007 to R$ 2,360 billion in 2012, representing 53.5% of the Brazilian GDP, according to the Central Bank.

This scenario has positively affected the main socio-economic indicators in Brazil. A clear consequence of this process was the reduction of informal employment, which rose from 43.6% in 2002 to 34.1% in the first quarter of 2012, according to the Institute of Applied Economic Research (IPEA). Another important step was the reduction of social inequality: the wage of the poorest 10% grew by 91.2% between 2001 and 2011, compared to income of the richest 10% increased 16.6% in the same period. Social mobility and the increased income of the population led to the expansion of the middle class (also called class C).

The increase in consumption, especially in the retail sector, favors the growth of Linx customers, impacting their revenue generation. It also opens new business opportunities, thanks to the strengthening and maturing of the industry as a whole.

The IT investments in the retail sector represents 5% of the total IT spending in Brazil, according to IDC¹ research. What is observed in the country is a high investment in hardware in the retail sector, as the investments in IT solutions is still in its infancy and there is a low supply of SaaS solutions and cloud services. However, it is expected that this scenario will change from 2013.

The software market for the retail sector in Brazil has the potential of R$ 7.4 billion, according to research data from IDC, 2011, and only 7% of this potential has been exploited, totaling R$ 544 million. According to the survey, Brazilian retailers have the potential to expand their IT investment from the current 0.55% of sales to 1.7% of sales. There are opportunities for growth in all segments of IT solutions for retail management, such as software (ERP and POS), EFT and e-commerce. The expected growth in both the information technology sector as well as the retail sector, combined, should boost the market Linx to a compound annual growth rate of 18%.

A major area of retail growth in Brazil has been through shopping malls, a direct consequence of the expansion of consumer income and middle class. According to the Brazilian Association of Shopping Centers (Abrasce), the total sales of shopping malls in Brazil grew 139% between 2006 and 2012, rising from R$ 50 billion to R$ 119.5 billion. In the same period, the number of malls in the country increased by 22.5%. In 2012, 27 new shopping malls were opened and in 2013, it is estimated that more than 47 will open their doors. Another aspect of this expansion is the geographical dispersion of these establishments outside the traditional areas of consumers, expanding business opportunities..

According to Abrasce, shopping malls are responsible for 19% of the national retail sales and represent 2.7% of GDP. Today, these centers receive monthly, more than 398 million visits. An attractive feature of these retail outlets are is the comfort of finding several stores in one place, providing a better shopping experience for the consumer.
 

IT spending in Brazil is mostly related to the hardware segment, due to the issues of the infrastructure and telecommunications in the country. The progress that has been achieved in recent years should boost the market, increasing the penetration of investments in software. These also contribute to the expansion of this sector's Internet broadband growth - which, according to IDC¹ research, has already reached 25.1% of all households - and cell phones with 3G technology.

Compared to other countries, like the United States, the Brazilian IT industry is still very small, involving about US$ 54 billion compared to US$ 606 billion in the U.S. market. Growth prospects, however, are more optimistic at the national level mainly due to the maturing process of the sector. According to data from Gartner, IT spending in Brazil will grow at an average annual rate of 7.3% between 2012 and 2016. In the United States, this rate is estimated to be 3.5% in the same period.
 

The retail market also has the support of the Plano BrasilMaior, (Larger Brazil Plan), an industrial policy, technological and foreign trade of the Federal Government aims to increase the country's competitiveness through inclusive economic growth, focusing on innovation in Brazilian industry. The Plano BrasilMaior includes exemption measures on investments and exports, helping Brazil to compete in the international market. Taken into account the exchange rate fluctuation, the advance of credit and regulatory innovation benchmark, as well as the application of tax incentives and greater access to financing in order to add value to the national product and the competitiveness of supply chains.