We get it, running a store is no small feat.
From keeping track of products to making sure customers have a great experience, and also ensuring maximum profit margins, it’s a lot to juggle.
In fact, The National Retail Federation estimates that excess inventory carrying costs retailers nearly $50 billion annually in the U.S. alone.
Implementing an Enterprise Resource Planning (ERP) system can offer a multitude of benefits for a retailer like you across various aspects of your business and the buyer journey.
According to Salesforce, 77% of consumers are more likely to buy from companies that personalize their customer experience across different touchpoints.
It’s simple- ERP for retailers helps you handle everything from keeping shelves stocked to processing orders to delighting your customers with personalized rewards.
And the best part? It does it all super efficiently, saving you time and money. Let’s take you through the modern-day benefits and competitive advantage of using ERP for the retail industry.
What are the Benefits Enjoyed by Retailers Using ERP?
Without ERP, you might rely on multiple disconnected systems and manual processes. This can lead to inefficiencies, delays in decision-making, and increased labor costs as tasks take longer to complete.
According to a study by McKinsey, companies with streamlined operations are 50% more likely to have above-average profitability.
Streamlining operations with ERP reduces overhead costs, minimizes bottlenecks, and enables quicker response times to market changes.
A report by Deloitte found that organizations that invest in process efficiency and automation can reduce operational costs by up to 25%. So, it’s quite clear that using ERP for streamlined automation helps retailers make their life a lot easier.
Real-Time Data and Analytics:
Access to real-time data becomes a challenge without an ERP. This could lead to slower response times, missed opportunities, and potential losses due to delayed or inaccurate decision-making.
A report from Aberdeen Group found that companies using real-time analytics are 3 times more likely to make informed business decisions.
Inaccurate inventory data can result in overstocking, leading to higher carrying costs and potential losses due to obsolescence, or stockouts, which can lead to lost sales and dissatisfied customers.
Real-time data empowers retailers like you to quickly identify trends, respond to customer preferences, and adjust strategies to meet current market demands.
Enhanced Customer Relationship Management (CRM):
Managing customer interactions throughout different channels is challenging for all retailers. This may result in missed opportunities for personalized engagement, leading to lower customer satisfaction and loyalty.
ERP helps in accurate inventory management, minimizing overstocking, reducing carrying costs, and preventing revenue loss due to stockouts. Some of the good retail-specific ERPs for medium to large scale retailers include Microsoft Dynamics Business Central, Oracle NetSuite, SAP Business One, etc.
Effective CRM enables retailers like you to understand individual customer preferences, leading to higher customer retention rates and increased sales.
Efficient Order Processing:
Manual order processing can be error-prone and time-consuming. This can result in slower fulfillment times, potentially leading to unhappy customers, order cancellations, or returns.
A study by the Baymard Institute found that 69.23% of online shopping carts are abandoned before the purchase is completed. Efficient order processing with ERP for retailers helps in reducing cart abandonment rates by ensuring a seamless and quick checkout experience.
Financial Management and Reporting:
Managing finances without an integrated system can lead to errors in reporting, delayed financial statements, and potential compliance issues, potentially resulting in fines or penalties.
The American Productivity & Quality Center found that organizations with well-implemented financial reporting systems can experience up to a 30% improvement in their financial performance.
So, for retailers like you, accurate and timely financial reporting with ERP provides visibility into the health of your retail business and helps in making informed financial decisions.
Supply Chain Optimization:
Without advanced supply chain tools, you may struggle to adapt to changes in demand, supplier issues, or disruptions. This could lead to higher costs, longer lead times, and potential stockouts. A report by Gartner highlights that supply chain disruptions can result in a 5% to 10% decrease in shareholder value.
ERP ensures an optimized supply chain, creating resilience against disruptions, reduces costs, and improves overall operational efficiency.
As a retailer, you know the holy grail! When your customers are happy, your profits will soar!
Managing different channels separately can lead to inconsistent customer experiences. This can result in confusion, frustration, and potential loss of customers who expect a seamless experience. Harvard Business Review states that companies with strong omnichannel customer engagement strategies retain, on average, 89% of their customers.
With ERP you get seamless integration across various channels which leads to consistent customer experiences, which in turn drives customer loyalty and higher lifetime value.
Compliance and Reporting:
Staying compliant with evolving regulations without a dedicated system can be challenging. Non-compliance can lead to huge fines, complicated legal issues, and cause serious harm to the hard-earned brand reputation. The Ponemon Institute found that non-compliance with data protection regulations can result in fines averaging $14 million.
ERP in the retail industry helps you in staying compliant with regulations, helps in avoiding costly fines and maintains the trust of customers concerned about data privacy.
What is the Competitive Advantage of Choosing ERP Over Other Software in Retail Industry?
Without the tools to adapt quickly and offer seamless customer experiences, you may fall behind competitors who can respond rapidly to changing market demands.
In a survey by Forbes Insights, 81% of executives agreed that agility is key to gaining a competitive edge in today’s business environment.
Modern retail demands a high degree of adaptability, efficiency, and customer-centricity.
An ERP system is uniquely positioned to provide an integrated, data-driven foundation that allows you to thrive in this dynamic environment.
An ERP system equips you with the agility needed to respond quickly to the retail market shifts, innovate, and deliver superior customer experiences, setting you apart from your competitors in the retail industry.
On the other side, not using an ERP system can lead to a range of challenges, including operational inefficiencies, increased costs, reduced customer satisfaction, and potentially even legal and compliance issues as discussed in detail in the blog. Over time, these factors can erode profitability and hinder your ability to compete effectively in the modern retail landscape.
According to a study by McKinsey, companies that invest in scalable technologies are 6 times more likely to experience revenue growth of 20% or more. And ERP for retail industry enables successful scalability.
It enables retailers to expand their operations efficiently, seize new opportunities, and respond to market changes with agility. Hence, to gain the competitive advantage in the retail industry, tap into the powerful potential of ERP.
Web Masters, as a renowned software provider, is dedicated to delivering robust IT solutions and services tailored for businesses. Renowned for providing top-notch ERP, CRM, and retail solutions, Web Masters has solidified its position in the industry. Their expertise extends to pioneering proprietary business automation solutions specifically designed for the retail, finance, manufacturing, IT service, and the wholesale distribution Industry, showcasing a commitment to innovation and excellence.