7 factors to look out for
When the time comes for retailers to update their enterprise resource planning (ERP) and point of sale (POS) systems, many are cautious. Overhauling your IT is a big step, and an ERP and POS implementation impacts every aspect of the business. Get it wrong, and you could end up caught in a costly and time intensive exercise, landed with a system that doesn’t deliver all the functionality you need. But get it right and you’ll have a solid backbone to your operations, which will support you as you grow and diversify your business, and ultimately help you thrive.
As technology continues to reshape consumer retail experiences, luxury retailers must now think beyond the old, limited definition of “retail technology” when looking for a new ERP and POS system. There are thousands of POS systems on the market, and all of them will enable you to do the basics – add items, import descriptions, create promotions, sell, and get end-of-day reports. But the basics are not enough anymore. The ideal software solution will help you deliver great customer experiences, optimize your products selection, easily add new services, and stay agile and ready for change.
We have identified seven key criteria to consider as you evaluate the options on the market, helping you select the right POS and ERP system for your business’s present and future needs.
Many software solutions let you superficially deliver a uniform experience for the customer. But to deliver effective and engaging customer experiences across channels, you need technology that gives you a clear view of your data, total control, and real-time information on products, sales, and customers for all your online and physical stores. If your data sits in siloes across separate databases, and your channels don’t communicate with one another, sooner or later you’ll find yourself unable to see and serve your customers.
Customers expect to be treated as individuals and want to be recognized as such. When personalization is done well, it can bring significant benefits to your business. A report by Boston Consulting Group found that when the shopping experience was highly personalized, customers were 110% more likely to add additional items to their baskets and 40% more likely to spend more than they had planned.
To gain a complete view of each customer, you must be able to identify them whether they are shopping online, on the app, or in person, and connect all the data points so they form a single picture. This involves bringing together multiple data sources into one database, to obtain a unified view of consumers across transactions and channels, tied to your loyalty program (if you offer one).
Luxury retailers need powerful inventory capabilities and a clear, realtime view of stock. You need to meet quickly changing consumer demand and make smart decisions that bring tangible value: more returning customers, more items sold at full price, and more personalized consumer experiences. You must be able to cater for different budgets, manage custom orders, and ensure you always have what your customers are looking for by efficiently distributing items to the right store locations. You also need to be able to understand what consumers are buying now and foresee what they will want in the future. With a huge variety of products to juggle and fast-moving trends to keep up with, you need powerful intelligent analytics and forecasting tools, which interrogate data to identify trends and patterns and help you determine which products to order and how to distribute them. Until a few years ago business analytics used to be considered an expensive extra, which only huge corporations could afford – but that’s not the case anymore. And as the industry continues to navigate supply chain disruptions, it will be critical for retailers to have software that helps spot trends, predict demand, and adjust quickly.
The average staff turnover rate in retail remains high compared to other industries, hovering around 60% according to the National Retail Federation. It’s a problem that leads to endless cycles of sourcing, hiring, onboarding, and training, draining store management time and resources and costing your business.
A modern POS system can deliver the capabilities to plan employee schedules and track employee costs and performance. It can also give you the insights you need to optimize your use of employees, decrease staff turnover, and help you pin-point top-performing people to reward. This recognition can really pay off. A study by SurveyMonkey found that 63% of employees recognized at work are very unlikely to seek a new job.
Holidays, back to school, summer heatwaves – certain periods in the year have a huge impact on retail sales performance. The question is, are you properly prepared for them? Without the tools to analyze your sales data and make accurate forecasts, you could be missing out on some big opportunities, especially during busy trading periods.
In the retail industry, luxury brands stand to gain significant benefits from the adoption of data analytics. In its article ‘Jumpstarting value creation with data and analytics in fashion and luxury,’ McKinsey confirmed that companies that make data-driven decisions around stock and store optimization increase sales by 10%.
Every retailer needs future-proof technology that will support them as they grow their enterprise, diversify their offer, and adapt to new business needs.
While you may already have plans to open new locations, you can’t always predict accurately how quickly you’ll grow. And even if you aren’t planning to expand to different countries yet, that time might come. Then, you’ll be happy you selected a software solution that makes it easy to open new stores, perhaps in countries with different regulations, currencies, or languages.
Similarly, you may not already offer services outside your core offering, but in the future you may decide to open an in-store wine bar or restaurant, or offer in-person and online consultations. Several luxury retailers, from Armani to Tiffany & Co., have already diversified their brand with additional services and seen the benefit. Studies have shown that retailers that invest in getting shoppers to linger in store, for example by having a food service area or special events, see a sales increase of 20% to 40%.
While you can add extra software solutions to manage your food production, table service, events, bookings, and so on, that’s not the best solution. If you already run non-retail services, or plan to do so, it pays off to find an ERP and POS system that can support different industry requirements out of the box.
This is a decision you don’t want to rush into. It pays off to take the time to get the vendor and technology selection process right. Most vendors will tell you that they can satisfy all your business requirements, but it’s worth checking that there is substance behind their words. Clearly define what functionality your business needs and pin vendors down on specifically what it would take to deliver those critical business functions in terms of cost, time, complexity, and training.
Selecting a POS and ERP system that supports your current and future needs will help you build resilience and agility into your retail business.
At the same time, the software solution you choose will significantly impact your business for the next 5-10 years – so this is not a decision to be taken lightly.
As you evaluate different options and tick the boxes, keep in mind the seven factors outlined in this paper. Use the list of items to look for as a guide to select a retail business software system that enhances your business results, supporting the business you are and helping you become the business you want to be.
Ultimately, the ideal retail solution should help you
As the industry continues to evolve and customers demand more speed and convenience, it pays to have a modern retail platform as the beating heart of your business, supporting you every step of the way.
Are you lost in a jungle of retail solutions that all claim to do everything you need?
We are experts in retail software, and support several well-known luxury retailers. We’ll be happy to help you understand what you actually need, and help you find a solution that solves your challenges.
NaviWorld Australia is a leading provider of end-to-end integrated and flexible business management solutions for mid-sized companies in Australia and the surrounding region. With offerings tailored to various industries, from Distribution to Retail, Services to Manufacturing, NaviWorld brings a portfolio of globally successful, fully integrated technology-driven business solutions to our valued customers.