What to Look For When Considering an ERP Solution for Your Organization
The US Census Bureau indicates that e-commerce grew 32% over the course of 2020, largely due to stay-at-home orders during the COVID-19 pandemic. Depending on their sector, retailers of every stripe were forced to create from scratch or drastically improve their e-commerce business models to stay afloat.
As a result, many retailers are finding the complexities of their back-office systems have increased dramatically. Now that retailers are emerging from the pandemic with the lessons of e-commerce in the time of COVID under their belts, what integrated solution should retailers employ to simplify operations across every aspect of their company?
Retail ERP (enterprise resource planning) solutions are designed to meet the specific needs of both retailers and their customers who expect speed, responsiveness, and reliability from the modern retail experience.
In general, ERP software helps businesses to organize and connect their most relevant data across different systems, creating more intelligent and accessible data for improved productivity, increased organization and accuracy, and streamlined revenue and supply chain processes. The retail industry particularly benefits from ERP platforms because the customer journey, inventory management, digital advertising, and reputation management all play a role in the success of a retail business. Further, ERP allows the retailer to connect every step of a customer’s lifecycle from acquisition to sale to after-the-sale support.
Many retailers are finding that their multichannel buying and selling needs are only met by purpose-built retail ERP software. If you are considering a retail ERP solution for your business, read below for three key factors that you should consider before making a decision.
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Consideration 1: The platform places equal focus on real-time inventory management and predictive analytics.
Retailers rely on the inventory management side of ERP more than most lines of business, but the traditional inventory and supply chain management tools don't always cover the range of product movements that happen in retail.
Here are just a few examples of what separates the retail inventory management process from other industries:
Multichannel purchasing through brick-and-mortar stores, websites, and social media apps requires strict inventory segmentation at the warehouse and store level, to ensure stock is available for all purchasing channels.
Your supply chain doesn't end when the customer makes a purchase. They might exchange or return a product, and they won't always take it to the same place where it was purchased. Retail ERP inventory management can track and redistribute returned items, whether they're mailed back or taken to a store location on the other side of the country. Your retail ERP should have features to track returns and exchanges, ensuring that those items fall back into the right location in the supply chain workflow.
Speaking of exchanges and returns, what if complaints or problems arise, requiring product recall? A strong retail ERP tool provides up-to-date data on all of the locations where that product might be stored, whether at a warehouse or several local storefronts. That level of visibility will help your team to remove the product from both online and storefront inventory as quickly as possible.
Inventory Forecasting Through Predictive Analytics
Predictive analytics pull data from previous purchases, returns, and inventory numbers to assess what product planning needs to change in the future. Should a product be discontinued or should you increase inventory? Should a product be offered in different colors, sizes, or flavors? Is one of your regional markets more interested in this product than other regions? Have sales frequently spiked for this item (i.e. raincoats) in March? Predictive analytics in a retail ERP will help you assess this data across your inventory sources to determine what needs to change on the manufacturing, marketing, or sales side of the business.
Read About Inventory Management in Healthcare: Essential Features in Healthcare ERP
Consideration 2: The platform standardizes the customer experience and communication across your internal departments.
No matter who on your team engages with a customer, they should be able to communicate what is happening with the customer’s order, the status of out-of-stock or discontinued items, and other product questions customers may ask. Your marketing department may not know the answers to some of these logistical questions, but it's important for them to be able to easily access that information so that they can communicate with customers.
Here are some important customer experience features that your retail ERP should offer:
The platform blends qualitative and quantitative data about your products, such as customer comments and reviews combined with sales and returns data. Retail ERP platforms help you to assess which products need a ramp up or ramp down in inventory, based on current data analytics and predictive analytics.
Your ERP should include a retail CRM that incorporates a customer's online interactions, conversations with your employees, and their purchasing history into one user profile in the database.
Why should a retail CRM be included with your retail ERP software?
It's unwise to separate the CRM from the retail ERP, just like it's unwise to separate customer data from purchase data. A built-in retail CRM not only makes sure that you are allocating and reviewing your product resources, but also that you are using customer input and data to inform those resource planning decisions.
A retail CRM allows you to build a robust customer profile, but it goes beyond purchases, returns, and other typical ERP data related to order management and accounting. It additionally tracks their interactions with your products and services, answering questions like:
- How many times did they click on that one item on the site and not buy it?
- What kinds of conversations do they have with chatbots or live customer service reps?
- Do they consistently open certain marketing and discount emails?
This information will help you with inventory planning and finding customer pain points before they become a problem. It also provides your team with detailed information about how they can help a customer on a personalized level. With a retail CRM, you now have qualitative data about your customers' habits instead of just quantitative data related to their purchases.
Read More About Data and Your CRM: Qualitative vs. Quantitative Data
Consideration 3: The platform seamlessly connects customer and purchase data across e-commerce and brick-and-mortar stores.
Long before the start of the COVID-19 pandemic, customers leaned into the convenience of online shopping over in-person shopping. Brick-and-mortar stores don't appear to be going anywhere, but more and more businesses are adapting to this hybrid shopping model with a heavy influx of online purchasing.
If a customer shops at your storefront one day and on your website the next day, will they be getting the same quality experience and customer service from your brand? Will your company be able to track their purchase history, customer interactions, and buyer identity across their different purchasing methods?
A strong retail ERP is designed with multichannel retail purchases in mind, using built-in tools to connect purchase, inventory, and return data across any type of purchasing method for your customers. Some other benefits of multichannel data management include:
Storefront vs. Online Performance
Retail ERP tools and their associated CRMs help retailers determine if a certain product sells better online or in person. This information lets you know when to move around inventory to different warehouses or store locations, or when to adjust your online listings.
Inventory, Discontinuations, and Market Studies
Knowing that a product's inventory hasn't been replaced in a while at a certain store location lets you know that the product is underperforming in that market, or that your team overestimated the stock needed. If the performance looks better at different locations or online, you may need to reevaluate the market where the product is underperforming. If you notice a decline in that product's sales across all channels, it's probably time to decrease inventory or discontinue that product. A retail ERP gives you real-time data to make these kinds of judgment calls.
Personalization Opportunities for Customers
Because retail ERPs work to encompass customer data across all of their purchasing methods, your organization can create a customer profile and identify them no matter when and where they make a purchase. Customer profiles that include all of their relevant purchasing history enable more gamification and personalization opportunities to build a loyal customer base.
A personalized discount offer is a great example of where this information comes in handy: "Hi, _______! You've spent x amount of money with us over the past six months, so here's a 50% off coupon to thank you!" When you're applying personal touches to the customer experience, you don't want to miss some of their purchasing data just because they decided to use multiple shopping methods.
Are you a retailer that wants to find a retail-specific ERP solution for your growing, diversifying business? There are multiple options out there, so it can be overwhelming to find the right fit. Good news: there are helpful guides to assist you in your search. Check out this ERP Software Product Selection Tool from TechnologyAdvice, and find the ERP platform that makes your retail experience run smoother for employees and customers alike.
Read Next: Three Key Advances in ERP for 2021
This article was originally published on 04-23-2021