A retail business sells products or services to consumers for either personal, household, or business use. Retail businesses can be small or big and can e.g. take the form of independent stores, chain stores, or online stores. Retailers can choose to sell a wide range of products, including clothing, electronics, groceries, home goods, and more, or they can specialize in a niche. Retail businesses can also offer a variety of services, such as repairs, installation, and maintenance. Retail businesses typically purchase products or services from manufacturers, wholesalers, or distributors and then sell them to consumers for a profit. While some retail businesses are vertically integrated and have some manufacturing or assembly capabilities and capacity in-house this is usually not the case. That is retail businesses focus on positive customer experience, competitive pricing, and effective inventory and operations management. This is where they can benefit from Enterprise Resource Planning (ERP) solutions or other alternative systems. I will go over some of these systems in this article on “ERP software for retail”.
Popular ERP software for retail
There are several ERP software options available for consumer goods retailers without manufacturing. Some of the popular ones include:
- SAP Business One offers features like sales, inventory management, finance, and purchasing modules.
- Microsoft Dynamics 365 is a cloud-based ERP system that offers features like financial management, supply chain management, and customer relationship management.
- NetSuite is a cloud-based ERP system that offers features like financial management, inventory management, order management, and customer relationship management.
- Odoo is an open-source ERP system that offers features like sales, inventory management, finance, and purchasing modules.
- Sage Intacct is a cloud-based ERP system that offers features like financial management, inventory management, and order management.
Choosing the best ERP system for a consumer goods retail business will depend on specific business requirements and available budget. Important evaluation criteria are thus each system’s features, scalability, ease of use, and pricing before making a final decision.
Benefits of ERP software for retail
Why do retailers use e.g. ERP systems? There are several reasons that I can think of on the top of my mind.
ERP systems integrate all the different aspects of a retailer’s operations into one platform. This enables the business to streamline its processes, reduce duplication of effort and minimize the chances of errors and data inconsistencies.
ERP systems provide retailers with a real-time view of inventory levels across all locations, allowing them to optimize stock levels, reduce stockouts, and minimize overstocking. They also equip retailers with a 360-degree view of customer interactions, purchase histories, and preferences, allowing them to provide personalized experiences and build lasting customer relationships.
ERP systems automate many business processes, such as order processing, invoicing, and financial reporting. This reduces the time and resources required to complete these tasks manually and increases operational efficiency.
ERP systems provide retailers with real-time data and analytics on their operations, enabling them to make informed business decisions based on accurate information.
Alternatives to ERP systems for retail business
Before selecting a ERP software solution retails should consider several other options. Here are a few alternatives that all help retailers manage their business and operations more efficiently and effectively.
Point-of-sale (POS) systems
POS systems are designed specifically for retail businesses and can handle tasks such as sales, inventory management, customer data management, and reporting. POS systems are generally less complex and less expensive than ERP systems.
Customer Relationship Management (CRM) software
CRM software solutions are designed to help businesses manage their customer data, interactions, and relationships. CRM software can be especially useful for retail businesses that rely heavily on customer loyalty and repeat business.
Inventory management software
Inventory management software solutions can help retailers keep track of their inventory levels, reorder products when necessary, and reduce the risk of stockouts. They are help in avoiding overstock and therefrom resulting scrapping. Inventory management software can be standalone or integrated with other software systems.
Business intelligence (BI) software
BI software can help retailers analyze their sales data, identify trends, and make data-driven decisions. BI software can be especially useful for larger retailers with complex data analysis needs.
For retailers that sell online, e-commerce platforms can be an effective way to manage their online presence, sales, and customer data. These platforms can also integrate with other software systems, such as POS or inventory management software.
Data scientist focusing on simulation, optimization and modeling in R, SQL, VBA and Python