In today’s competitive and connected retail market, one mistake or delay can result in losing ground to a competitor. One of the most powerful tools you should implement to ensure your long-term success is a retail Enterprise Resource Planning (ERP) system.
What is a Retail ERP System?
Every business has a number of core processes, units and departments that each function as vital cogs in the machinery, including manufacturing, order management, purchasing inventory, accounting, human resources, financial management and so much more. The ideal scenario would be for each of these business units to utilize software that is tailored to support their specific functions. This is exactly what an ERP system offers by way of its customizable modules.
However, a traditional ERP system can prove to be incredibly complex to implement and maintain. Retail ERP systems, on the other hand, have been specifically tailored to the needs of retailers, often including only modules required for their unique technology stack. For instance, while most regular ERP systems usually offer only third-party support for point-of-sale (POS) functionality, retail ERP systems often include a POS module as standard. This focused approach results in retail ERP systems being far lighter and easier to implement and manage.
What Should you Look for in your Retail ERP System?
While most retail ERP software solutions at a fundamental level offer similar functionality, they each have their own features and specialties. That being said, there are some features the system you choose absolutely must have. Here is a list of the top five retail ERP software features to look for when choosing yours:
1. CRM integration: Customers are king in retail, and it is no secret that today’s shoppers are more discerning than ever before. Therefore, it is important for stores to know their loyal customers well, and the most successful, well-run businesses already do. The secret lies in their well-developed Customer Relationship Management (CRM) system.
CRM modules integrated into your ERP system can give you a 360-degree view of your customers — online and in-store purchases, their locations, accounts, preferences and more. Using this data, you can better understand their product preferences and spending patterns. As a result, you will be better able to personalize your products and services, tailor their experiences and drive customer engagement. Using the system, you can even identify your best customers and offer them loyalty incentives.
That is not all. CRM modules can also help you manage customer complaints and returns more efficiently as well as track the success of marketing campaigns, making sure future ones achieve even greater success.
2. Multi-channel management: Retailers and brands are now expected to provide multiple ways for consumers to buy their products, especially through ecommerce. Even though brick-and-mortar stores are unlikely to disappear anytime soon, retailers and brands that do not offer ecommerce as an option run the risk of being left behind by the competition.
It can be difficult and expensive, however, to establish and maintain an ecommerce store. A fantastic way to circumvent most of these issues is to integrate it into your retail ERP system. By doing so, you can manage your online marketplaces, branded ecommerce sites and more from a single system. This can also dramatically decrease errors, boost productivity, decrease costs and improve customer service and satisfaction while at the same time giving you more control and reach with your retail business.
3. Business intelligence and demand forecasting: Real-time, on-demand access to accurate data is essential when making critical business decisions. Considering that your retail ERP business management system is used to synchronize every aspect of your business, it is ideally suited for this purpose. Nevertheless, the sheer volume of data involved in day-to-day business operations can be staggering. Furthermore, to perform an accurate analysis, each item of data in your ERP system needs to be extracted, manipulated, filtered and sorted. Trying to do so manually can be a very time-consuming and error-prone process.
This is where business intelligence (BI) comes into play. In addition to collating and converting the mountains of data available from your ERP, it can also help convert it into easily understandable strategic insights and performance metrics. You can use this information to identify trends as well as plan and implement actionable strategies with confidence and speed to grow your business.
Modern retail ERP software can take this a step further with demand forecasting. Using historical sales data and current market conditions, the system can provide detailed forecasts of what demand will look like in future seasons. Better still, the longer the system is used, the more accurate it becomes. Demand forecasting can therefore help you maximize sales, reduce inventory carrying costs, and positively impact your bottom line. Due to its inherent link to BI, demand forecasting even allows you to react more quickly to any and all market changes.
4. Real-time inventory management: With modern retail ERP systems, you can track your stock in real time across your entire supply chain, updating instantly each time a purchase is made, no matter where it takes place. This helps create a central data repository for global stock availability, providing you and your POS network with real-time updates across channels on the exact quantity and location of stock.
Great retail ERP solutions, however, go one step further, recording not only the number of items but also their condition, including factors such as temperature and humidity of the storage areas. They will also track the exact value of your inventory, showing you exactly how much money is tied up in what products.
By bringing all this information together, you gain better oversight and control over your inventory, helping you better streamline and automate your inventory management process. Furthermore, it also helps you to identify and support the quick replenishment of your top-selling goods while phasing out your slower-moving products.
5. Comprehensive supply chain management: In addition to inventory management, comprehensive supply chain management is another key component of any good retail ERP system. The supply chain management module, when used in conjunction with inventory management through an ERP system, will help you not only see where your products are but ensure smooth transportation of products from your vendors to you, from your warehouse to your stores or the doorsteps of your customers.
Furthermore, every business has bills to pay and things to buy. A supply chain management module can help you with this as well. Since the module is linked to accounting through the ERP software, it can track checks, create purchase orders and more. It is also possible to track the quantity and quality of products ordered through the system, as well as the suppliers from which they were ordered. This ensures you have all the data you need to select the best suppliers when necessary and that all purchases meet your customers’ expectations and comply with regulatory requirements.
It can be difficult to manage day-to-day retail activities without the right ERP software. Though finding the perfect system can be tricky, taking note of each of these key features, your business requirements and doing adequate research can go a long way in helping you quickly find the perfect one for your business or brand.
Susan Jeffers is CEO and Co-founder XY Retail Inc. Born in Bombay India and educated in Silicon Valley, she has over 15 years of experience intechnology, marketing and working with brands. Jeffers is a serial entrepreneur, working on her third company. She was part of the founding team and responsible for digital marketing and business development at iStorez, a venture-backed company that was acquired by theFind. She also works with, invests and advises several startups in both the consumer retail and enterprise software space, most notably Toovia, Omnitrol and GigSky. She and her teams have been responsible for multiple successful large-scale enterprise technology rollouts for Fortune companies like MGM, AT&T, Bombardier, Union Pacific and Delta Airlines.