The retail industry, perhaps more visibly than many other industries, has gone through significant changes in the past few years as a result of technological advances. Consumers expect to be able to shop across multiple channels seamlessly, and retailers have been working to adapt to this environment for years. Mobile and social commerce recently emerged and then very suddenly became standard platforms that are used to generate large amounts of revenue. So how do retailers keep up with the demands of the consumers? Retail ERP software.
Role of ERP in the Current Retail Landscape
The current retail environment makes a great case for implementing software that addresses the omnichannel retail setting. According to Oberlo, it’s estimated that there will be 2.05 billion global digital buyers this year — that’s about 25% of the world’s population. Consumers expect to shop from their mobile device, on social media platforms, and, of course, at the brick and mortar store. Retail ERP solutions align with these challenges beautifully.
ERP for the retail industry possesses wide-ranging capabilities that automate navigation between the various channels involved in the omnichannel shopping experience. It facilitates the movement of data quickly to allow decision-makers to reach the best possible outcomes while making well-informed, on-the-spot data-driven decisions.
In short, ERP software carries many benefits for your organization as well as your customers. Next, we are going to examine how retailer ERP can make day-to-day duties of running your business simpler for you, and how ERP can pertain to your specific business needs.
How Can Retail ERP Software Improve Your Business?
The current retail environment is set up for retailers to respond directly and quickly to customer demands, whether it’s customer service through a social media platform or sending an automated notification when a package is delivered.
An ERP software system engages with a business in a dynamic and integrated manner, which helps executives gain a strategic view of their retail business. Centralized data and functionality allow for information to instantaneously move from one place to another.
Without such a system, a retailer could potentially face disjointed interfaces, disconnected pricing systems between channels and inconsistent KPI management.
Retail ERP systems are designed to address many areas of a business, such as customer relationship management, financial management and inventory management. The list below goes into more detail on different areas of business and the ERP features that compliment them.
A Closer Look at Core Features of a Retail ERP Software System
Before evaluating different retail ERP vendors, it’s essential to understand the basic features of retail ERP software.
Customer Relationship Management
This important function should be brought together to create a consolidated view of customer needs and avoid data silos.
- Marketing resource management – MRM supports marketing operations. This feature balances between technology, your team, and the creative and logistic processes.
- Sales-order management – This function effectively manages sales order throughout all the major stages, including sales order generation, work allocation, work completion and billing/invoicing.
- Customer account management – CRM module allows the user to view customers across products, geographies, account and status.
This module centralizes all of your fundamental warehouse functions and allows you to watch over details such as stock levels, product history and other product specifications.
- Shipping – A strong and dependable shipping capability is integral to customer satisfaction in the retail industry. A good system can automatically handle any errors, such as late deliveries or incorrect packages.
- Order management – These tools allow you to customize pricing, track orders and manage returns. More advanced systems support multichannel sales.
This system has the ability to execute and manage an organization’s overall budget planning activities. The solution manages budgets from three different points of view, according to the user role: accountant, project manager or department manager.
- Profit tracking – This feature provides an overview of how the business is using its financial resources and the overall financial health of the business.
- Risk management – Protects companies from internal and external theft and fraud.
Supply Chain Management
A network that provides end-to-end logistics and data that is immediately delivered after collections. This allows you to predict demand and stock stores accordingly.
- Distribution management – Handles the various steps involved in distribution such as providing customer support, inventory tracking, ordering and purchasing. The system provides real-time measurements of profitability by warehouse, product line, location and business unit.
- Purchase-order process – The PO function provides you with the tools to maintain steady stock levels, enhance merchandise quality and minimize costs within the purchasing department. This function helps you deal with challenges like delayed invoices, combined shipments or partial shipments.
Omnichannel Customer Experience Management
Regardless of whether the customer is shopping on your mobile website or at a brick and mortar store, the customer should be able to navigate all platforms seamlessly.
- Data and insight – A predictive tool that allows you to evaluate historical data to predict customer demands and provide insight into customers interests for a more personalized experience.
- Personalization – A tool that allows you to provide customers with information such as product recommendation. It also analyzes browsing behavior which can lead to advanced marketing strategies.
- Omnichannel order management – End-to-end software management across channels ensures efficient management of customer orders from any channel. Visibility into current inventory permits you to fulfill orders from anywhere in the supply chain.
According to BRP’s 2019 Unified Commerce Survey, 87% of consumers want a “personalized and consistent experience across channels.” The retail industry is guided by the customers, and “the customer is always right.” Investing in ERP would make it easier to achieve the coveted personalized omnichannel shopping experience, but it also carries many benefits on the administrative side.
When to Invest in an ERP System
This first question is difficult to measure in generic terms, as the deciding factors involved are unique to each business. A carefully selected ERP platform can service businesses for an average of 10 years and can be updated as they require more functionality. A common, stable platform with easy customization has the potential to evolve with your company as it grows and changes.
A new retail business just starting would only require a basic ERP system while a chain (5–10 locations) will require more complex software. With that being said, small business ERP is a constantly growing industry, so there are options for all different shapes and sizes of companies. An example of an alternate option is cloud-based ERP solutions; you can save on up-front costs because you pay as you go, and implementation is more simple.
In short, it is time to invest when employees are becoming tied up on tasks that could become automated through software. Financial considerations are important as this can be a significant investment, but attempting to run a business across multiple locations could potentially become more costly than investing in an ERP system to begin with.
The Best Retail ERP Vendor For Your Needs
The process of deciding on an ERP system begins in-house, with a close examination of your unique business needs. Once you have identified and prioritized these needs, the next step will include direct engagement with vendors. At this point, your selection team has come up with a group of potential vendors that will form part of your final selection pool. Go through the following steps to determine which vendor would be best for your business:
- Look for a vendor that has a background specifically in the retail industry; this will yield a higher quality experience for you.
- Research a vendor’s solvency, as you’ll want to ensure that the vendors will be in business if and when you’ll require their assistance.
- Question the level of service and support post-purchase.
- Keep in mind that this software is expensive, and the implementation process is complex and time-consuming. Take your time in making a decision.
How Complex of a Retail ERP Software System to Purchase
This decision will be based completely on the size of your business, how complex your business is and what particular category (we’ll get into that later) of retail business. Basic functions that are generally found in the majority of retail ERP packages include:
- Head Office Operation Software
- Accounting/General Ledger Software
- Human Resources Software
- Point of Sale (POS) and Store Management Software
- Warehouse and Supply Chain Management Software
- Customer Relationship Management (CRM) Software
- Business Intelligence (BI) Software
As mentioned, these functions cover the basics – keep reading for a more in-depth look at what ERP has to offer for your businesses’ specialized needs.
ERP By Retail Industry
Specific types of retail will benefit from specific types of enterprise resource planning software solutions. Here are a couple examples of different retail sectors and the ERP features that will compliment them …
- Product handling features, customer relationship management software and customer loyalty/satisfaction tools all help measure and evaluate relationships between businesses and their customers.
- Various BI features help the retail business look at inventories, sales numbers and business processes in the most effective way.
- Other tools will help with business processes such as brick and mortar store administration, price margin evaluation and stocking.
Farm and Home Retail
- Order entry and tracking systems can help managers supervise e-commerce operations.
- Mobile POS equipment can help with wrangling different sizes and volumes of items on the floor.
- Other aspects of farm and home retail ERP will help with inventory and the supply chain process, which can help the business to keep an eye on real estate costs, etc.
- ERP software can assist with handling seasonal promotional codes or coupons, thanks to specific kinds of CRM.
- Mobile POS assists with ringing up pharmacy transactions at various locations, and record-keeping features will help with compliance surrounding the drug purchases.
- Pharmacy ERP takes into account both sides of the business: the customer-facing side, with CRM, pricing tools and more; and second, the healthcare side
- The healthcare side may have tools such as a temperature regulation feature within an inventory control monitor. This would simplify quality control and help with adhering to compliance regulations.
- Pricing tools will assist in building current and up-to-date prices for OEM and aftermarket products, while parts identification features will help control inventory.
B2B or Contractor Centers
- Automated purchase tools can be helpful for B2B transactions.
- B2B systems can also provide for the shipment and handling of large volumes of inventory, for example, large items such as brick, wood, or concrete.
ERP software is a versatile, all-encompassing solution that retailers could use to facilitate their day-to-day business responsibilities. Additionally, ERP carries many benefits for customer satisfaction, especially in terms of the personalized omnichannel shopping experience. Depending on which sector of retail you belong to, there will be specific solutions designed with your needs in mind – even if your particular industry wasn’t mentioned in this article.
Do you have any questions or thoughts about ERP for retail? Let us know in the comments below!