When you run your own business, there are a lot of moving parts in the daily operations. You have to manage your sales, check on your stock, deal with finances, pay your staff, and of course, make sure you have satisfied customers.
In other words, running a retail business is complex. In order to stay ahead of the pack, you need to constantly find ways to improve and streamline your processes to become more efficient. And since it’s simply impossible to do all of this manually, forward-thinking and savvy merchants implement retail ERP (Enterprise Resource Planning) software — and for good reason.
What is Retail ERP?
To understand what ERP is, it’s important to first understand all the core processes needed to run a business. There’s order management, manufacturing, accounting, human resources, financial management, and myriad other spokes in the wheel.
At its most basic level, ERP integrates – or connects – those many different spokes that make up the whole back office operation. While they are complex and diverse, all ERP systems create a shared database that supports multiple functions used by different business units – ultimately enabling employees in different areas to have access to the same information for their specific needs.
However, the downside of typical ERP systems is that they can often be complicated and difficult to implement and maintain. They usually contain multiple separate modules within them, which require additional work in order to get them synchronized and communicating with one another successfully.
Retail ERP, meanwhile, is an ERP system that is specifically designed for retailers and the business process most important to them. That means a retail ERP software solution supports the essential modules required for your unique technology stack.
For instance, many retailers don’t require manufacturing or bill of materials modules, so a retail ERP usually doesn’t include them. This ensures the software is lighter and easier to implement and maintain, while ensuring you’re not paying for modules or features you don’t really need.
Additionally, there are many retail businesses that do need a point of sale system to manage their in-store sales. However, a traditional ERP would need to connect to a third party POS system in order to achieve this desired functionality. This adds yet another step to your implementation plan and potentially causes risks when it comes to the flow of data between the two systems.
With a retail ERP, a point of sale module is usually included as standard. That negates the risk of siloed systems, or worse, siloed data, which as you know can put up roadblocks to effective business intelligence and ultimately damage the customer experience.
In essence, then, a retail ERP solution is software tailored specifically toward the business needs of retailers. It strips away the redundant modules of traditional ERP which those companies don’t need.
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Why do Retailers Need a Tailored Retail ERP System?
The idea of stripping away those redundant elements of traditional ERP solutions has its own obvious benefits. No business, after all, wants to deal with—or pay for—functionality they simply don’t need. The reason retailers, particularly, need a tailored retail ERP system, though, runs deeper still.
Many growing retail businesses start out using a variety of simple tools like QuickBooks or Excel to manage different processes. While that’s often fine when starting out, the needs of retail businesses quickly change as they start to grow.
Not only does this growth demand different applications to impact all aspects of the business, but it also begins to become time intensive and detail oriented – making it nearly impossible for the human touch alone to keep up.
Once retailers have grown to the size of a mid- or large-scale enterprise, many of them turn to ERP to resolve their bottlenecks and operational deficiencies. However, as we’ve already discussed, traditional ERP systems are not going to ideally satisfy retailers’ needs.
Thus, many of these businesses find themselves in the position of needing to implement multiple standalone modules, features, and integrations in order for the ERP to be truly fit for purpose.
Instead, retailers should turn to a tailored retail ERP system. Whether you need an apparel ERP system, jewelry ERP system, fashion ERP system, or otherwise, there are benefits to each of these unique ERP categories.
For instance, the process involved in selling a product might seem simple, but it’s actually quite complex. Consider this journey as an example:
A customer buys an apparel item from an online retail store. At this time, a retail ERP system captures the customer’s information, feeds it to the integrated CRM module — including their name, contact information, credit card number and shipping details – then seamlessly integrates the necessary next steps into one cohesive experience for the customer to understand and the business to react to.
This process includes having already confirmed the product is in stock and available to send, having a notification strategy in place for when it’s shipped, and a concrete fulfillment process that includes preparing a packing slip and shipping label. Each of these processes is where the inventory, warehouse, and order management features of a retail ERP are involved.
When the order is ready for shipment, the fulfillment part of the ERP system reduces the inventory one by one, and lets the inventory module know that it’s necessary to re-order this shirt in this size if it’s scheduled for automatic replenishment. The perk of this entire process, what’s more, is that each detail can be customized to support each specific brand or retailer using a tailored ERP.
When you factor in the necessary steps involved in an apparel ERP process – or any retail ERP process for that matter – it’s easy to understand that doing this all by hand or via processes not connected with one another is both time consuming and inefficient.
This is where retail ERP truly shines, however, by allowing busy merchants, like yourself, to trust that the complexity of any single order is easily managed across all the touchpoints of your operation. By having the system automate the process of information sharing, the many steps of the purchase process are essentially completed in the blink of an eye.
In addition to saving you time and enabling you to gain more clarity across your entire operation, your employees benefit from retail ERP systems as well. Thanks to a tailored ERP, they can make more accurate buying and operational decisions, as they have accurate, real-time information and the ability to eliminate potential errors caused by bound-to-happen human mistakes.
Plus, retail ERP lowers the cost of doing business by streamlining various operations and eliminating redundant processes – something any business can truly appreciate.
Signs You’re Ready for a Retail ERP System
When you look at the advantages a retail ERP can provide, it’s clear that they’re a valuable tool for retailers. But how do you know that you’re ready for one?
1. Accounting has become more difficult
Among the many categories of retail operations that ERP benefits – whether fashion ERP, apparel ERP, jewelry ERP, or any other specific type – is that of accounting.
Long gone are the days when retailers can efficiently use paper-based sales orders and invoices, or even singular systems that do not sync with one another. Through integrated financial management within a retail ERP, you can confidently eliminate lost profits and loss of productivity while gaining accuracy in your accounting – among other – efforts.
This same explanation applies to financial reporting as well. By implementing a retail ERP system, you’ll no longer have to use countless spreadsheets to consolidate financial information across systems. An integrated retail ERP system can perform operations in seconds – something that would undoubtedly take most humans hours to do.
In addition, with all financials in a single database, your accounting staff will be more productive, leaving them more time to prepare, extract, and compile critical reports – among other responsibilities – without any hassle.
2. You have too many different processes
How do you record, track, and process information? Is there one system for accounting and another for sales? Does taking orders and getting them fulfilled and sent to your accounting system seem like an arduous manual process?
When employees use one software system to track, record, and process information while the accounting staff uses another, are you finding a disconnect between details and inaccuracies within your data?
Creating unnecessary challenges and inefficiencies shouldn’t be among the stresses of today’s modern merchants. Instead, retail ERP can eliminate these complications.
Through tailored ERP software, you can benefit from a ripple-like effect that supports everything from inventory management, to sales summaries, to payroll necessities, to shipping strategies, and more.
Retail ERP software combines all these systems so that every business function relies on a single database – delivering accurate, real-time information that retail leaders across any sector of any unique business can benefit from.
3. Retrieving information is difficult
If someone asked you about your month-over-month growth, how long would it take you to find that information? What about other key performance metrics, such as average sales margins or sales channel profitability?
If you’re a business that relies on spreadsheets and manually-written KPIs, or on a traditional ERP system that has various siloed modules, that answer could either take too long – or be too complex – to figure out.
Employees should be able to access key data immediately, without delays and without having to search for it through a mountain of paperwork or cross-reference a variety of digital platforms. With a retail ERP system, however, you and your employees will have access to up-to-date and accurate data at any time that allows you all to effectively do your jobs of work in an efficient manner.
4. Customers are complaining
When a business is small, inventory management can seem like an effortless process. But as the business gets larger, one of the biggest challenges is making sure you have the right amount of products in the right location at the right time.
If you run out of a popular product, you’re missing out on sales until the next shipment arrives. Meanwhile, if a customer is asking about the availability of a product and the employee can’t provide a quick answer, your company could develop a poor business reputation of being unreliable or lacking in satisfactory customer service.
A retail ERP system keeps everyone on the same page by giving all departments access to the same information in real-time. Sales reps, customer associates, and all front-facing employees are given the tools to answer customers’ questions about everything – from order status to service issues – without having to check with another department.
5. IT Management is a nightmare
The IT department can feel like a minefield when trying to manage multiple systems spread across the business. Trying to customize, integrate, and maintain each individually — along with general upgrades — can be complex and costly… both financially and in terms of staff time and resources.
As a result, two-thirds of mid-size businesses are running outdated versions of their business software. Instead, retail ERP solutions like Brightpearl make it easy to scale the system to adapt to your individual stage of growth, without the need for time consuming IT administration or costly developer time.
The benefits of tailored retail ERP to mid- to large-sized enterprises, then, are many. Now you know, you may have decided that it’s that kind of solution which will best suit your business. Which features, though, can you simply not do without, when considering retail ERP software? Glad you asked.
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Top 10 Must-Have Retail ERP Features
While a large or small business in the retail niche can do without many elements of traditional ERP, there are certain things that you must look for when considering a retail ERP solution. Here are the top ten features that should be at the top of your ERP requirements list.
1. Retail Workflow Automation
If there’s one thing that customers in the retail industry want, it’s to have a consistent shopping experience, whether they’re stepping into a brick and mortar store or ordering online. With a retail ERP system, retailers can consolidate all online, brick and mortar, wholesale, phone, and mobile sales into one single, easy to use system.
With delayed insight a thing of the past thanks to ERP, systems can automatically route orders to the warehouse, update order statuses, highlight exceptional orders, and reduce fulfillment costs per order with advanced workflow automation. And because you’ll be able to gain real-time insight into your sales through instant reports and integrated accounting, you’ll also gain from having the tools to make better business decisions.
Most importantly, that data can be used to manage all customers in a personalized way across all sales channels – every single time they shop – ultimately strengthening the relationships with both your retail and wholesale customers.
2. Multi-Location & Real-Time Inventory Management
Within the inventory management functionality of a retail ERP, you can easily maintain an accurate inventory through automatic updates across all your sales channels, visibility across all your locations, and the ability to perform frequent cycle counts easily.
In addition, you can have a real-time and accurate view into your stock, which ensures quick replenishment of your top-selling items, while supporting you in the phasing out of low-selling products as well.
Furthermore, with a tailored retail ERP system in place, you’ll have the flexibility needed to manage inventory levels behind bundles and kits, as well as for the various product sizes, colors, and other variants your products might have.
With a more streamlined and automatic inventory management process across all sales channels, you’ll also benefit from gaining clarity on margins that are visible down to individual orders, as well as the ability to access inventory reports, historic sales data, and real-time sales reports that allow you to make more informed purchasing decisions quickly and easily.
This all results in more satisfied customers who no longer have to be told that an item is (unfortunately) out of stock. In short, from startups to large enterprises, all retailers can take total control of the stages of the supply chain within their remit. Without their ERP solution being complicated by supply chain management functionality—related to raw materials, manufacturing, etc.–that they simply don’t need.
3. Integrated Warehouse Management
One thing that’s essential to reducing processing costs and errors is efficient warehouse management and order fulfillment. You need to move your products quickly in and out of the warehouse to get them into rotation swiftly and to fulfill orders as efficiently as possible – plain and simple.
Or is it?
The integrated warehouse management functionality of a retail ERP should be able to support barcode scanning, inventory counts, and returned inventory, while being fully integrated with your entire business — including inventory management, sales order management, purchase and supplier management, customer service, and accounting.
As a result, you’ll reduce your time to ship, eliminate errors, reduce processing costs, and save time, leaving you free to focus on revenue growth.
4. Multichannel Order Management
Supporting fast and frictionless shopping experiences, whenever and wherever sales are made, is essential to meeting the needs of today’s savvy omnichannel customer.
However you choose to sell your products – be it online, offline, or through wholesale – a retail ERP will manage everything within one centralized system for you, enabling you to focus on the experience and building strong customer loyalty.
Built-in integrations within a retail ERP will take care of your ecommerce orders from channels such as BigCommerce, Magento, Shopify, eBay and Amazon, while retail ERP vendors also understand the benefits and market opportunity that can come with a brick and mortar store, and thus, will likely come with an integrated point of sale system as standard as well.
The integrated aspect is key here as it will ensure all your orders can be automatically downloaded and stored centrally within your ERP system. If possible, you should also look for an integrated point of sale that has an offline mode as well, so should you find yourself without an internet connection – for instance while on the road, at trade shows, events or at your pop-up shop – you’ll still be able to take sales and record profitability.
5. Flexible Order Fulfillment
As a complex retail business, you’re likely using a myriad of different fulfillment options in order to satisfy the needs of your demanding customers.
Fortunately, a retail ERP will be fully equipped with various features to support your unique processes, such as drop-shipping, partial fulfillment, back orders and more.
You’ll simply need to choose your primary and secondary warehouses to fulfill from and let your own processes guide you, rather than limitations of one-size-fits-all legacy ERP software.
6. Integrated Accounting
Native accounting means you’ll always know exactly what funds are owed to your suppliers and when they’re due, allowing you to easily keep on top of your accounts payable.
A retail ERP eliminates the risk of paying duplicate invoices or errors caused by manual data input. In addition, it gives you the ability to capture the right discounts, improve supplier relationships, and generally improve productivity across the whole of the business.
Furthermore, a retail ERP will naturally also come complete with essential retail accounting features like landed-cost and multi-currency.
With software tracking the landed-cost of each product, such as freight charges, import duty, insurance, and other taxes, you’ll always know the true costs of your products, and therefore, how healthy your margins are. That makes it easier to assess related aspects of your business, like pricing strategies and budgeting.
Additionally, all your exchange rate gains and losses will also be automatically accounted for and recorded within your financial reports, ensuring you can grow your business through cross-border trade with peace of mind.
If efficiency and global growth are goals you have, then a retail ERP is right for you.
7. Demand Planning & Inventory Forecasting
Customers have become accustomed to getting what they want, when they want it. If you can’t provide that for them, they won’t hesitate to get what they need from a competitor. That’s why it’s so important to provide great customer service, and that includes meeting their demand for your products, which makes forecasting extremely important.
With retail ERP software, tracking past trends and forecasting future demand is easier and higher on accuracy. Because the software centralizes all inventory, sales, purchasing, accounting and reporting data into one single system, you can manage the quantity of inventory on hand, optimize inventory levels and manage inventory movements easily and efficiently.
You’ll also have a real-time and accurate view into your stock, which allows you to quickly replenish your top-selling items, as well as phase out your less popular products. Furthermore, integrations with expert tools like Inventory Planner mean you can easily forecast demand and purchase inventory in advance that is guaranteed to sell well.
8. Integrated Retail CRM
In retail, customers can make or break your success. Keeping this in mind, retail ERP systems offer a dedicated customer management module that helps support the necessary factors of managing today’s modern customer relationships. Along with providing a truly integrated view of customers, it also helps you to overcome customer-related challenges.
Orders, emails and call notes are all logged against contact records, providing you with a complete history of each relationship, as well as the ability to function as a coordinated customer-first business. Because you’ll have access to a full order history and customer interactions, your staff can unite their approach towards your customers, instantly improving the customer service your company provides.
Plus, as all your customer and supplier information is integrated with the rest of your business, you can also easily personalize your marketing efforts. For instance, you’ll be able to segment your customers based on order history data to help identify cross-sell and upsell opportunities within your existing customer base.
Gaining more clarity on who your customers are and how you can better support them is a huge advantage of a retail ERP system – and one that any retailer should recognize as a key factor in strengthening their business.
9. Hybrid Retail & Wholesale Functionality
Multiple vendors? No problem! Some retail ERP systems are hybrid, which means they can serve both retailers and wholesalers; one example being the Brightpearl retail operations system.
With these hybrid ERP systems, you’re given access to a full customer audit trail and previous order history for every customer or client, allowing you to work efficiently with your customers and build lasting relationships with them – no matter what type of customer they are. This is sure to be a winning scenario that can only help to optimize all your retail goals.
10. Returns Management
Returns are inevitable within most retail businesses, which means specialist retail ERP systems should be flexible enough to support how you want to process each return.
They’ll often allow you to bring items back into the warehouse for immediate resale, or if the items have been damaged in transit, or are faulty, then you’ll also be able to place the goods into a ‘quarantine’ location ready for review at a later time, or be able to write them off completely if needed as well.
As for refunds, with a retail ERP system in place, you’ll be able to decide whether to issue an immediate refund, allocate the payment against any outstanding orders or keep the money on the customer’s account balance so it can be used against a future order.
This ensures your business remains flexible and adaptable – even during this post-sale phase – ensuring you don’t isolate customers from buying from you again in the future.
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Retail ERP – Tailormade for Retailers
Enterprise resource planning (ERP) software is utilized in fields as diverse as manufacturing, healthcare, and many more. In order to account for the needs of these varied businesses, traditional ERP solutions often include elements that are entirely redundant when it comes to retail.
That’s where retail ERP comes in.
Retail ERP is software tailormade to integrate and connect the specific business processes that are vital to retail operations. With such a solution, retailers can better track, assess, and streamline all of those crucial processes. A recipe, if ever you saw one, for improved efficiency, enhanced productivity, and a healthier bottom line.
Therefore, as you look ahead to your own process of identifying if retail ERP is right for your business, consider what your long-term goals are.
- Are they to strengthen employee operations?
- Reduce errors?
- Increase sales?
- Improve customer retention?
- Provide more clarity to sales, inventory turnover and opportunities?
If “yes” is your answer to each of these questions, then “yes” should be your answer to: “Is retail ERP right for me?”