How Can a Retail ERP System Improve In-Store Merchandising?
Retailers can avoid losses caused by poor in-store planning by using integrated data collected via a retail ERP system.
An article on the Retail Information System News website features a recent report describing in-store merchandising as the biggest area with inefficiencies and profit losses. For many tier-one retailers, poor merchandise planning comes at a cost of at least $40 million in annual sales, the research found. Also, about 37 percent of retailers reported that they lost up to 3 percent of annual sales because of “inaccurate in-store merchandising efforts,” such as promotions or special sales events.
This is where a retail ERP system can improve figures. Data from a retail ERP system can help retailers measure how well certain visual merchandising plans work by comparing sales to another period.
It’s important that retailers are tracking transactions at the retail point of sale level. It’s not enough to merely track the number of grocery, pharmacy and clothing items sold during a specific time period. The retail ERP system needs to track what was sold, to whom and at what price, while additionally tracking any promotional campaign that applied (in-store promotion, use of a coupon, loyalty reward, etc.). That’s the best way to track trends and provide a base of information to analyze.
With a retail ERP system, all in-store metrics are gathered and analyzed in one place. More than half of the respondents to the survey reported that “disconnect between merchandising, marketing and store ops” is the biggest factor hindering efforts to correct poor in-store merchandising, according to the article. That’s the problem with operating in silos; having all of your information tied together where it can be analyzed and correlated is a good starting point for solving noncompliance problems.
Another factor preventing retailers from improving their in-store merchandising efforts is using technology that cannot be integrated. This is a big problem everywhere. Excel spreadsheets are usually islands of automation. Everyone could easily be working on different spreadsheets (or the wrong versions) and that can easily lead to data entry errors. It’s much better to rely on a retail ERP system as the main repository of data.
With a retail ERP system, retailers benefit from integrated data, which can be used to find areas of inefficiencies and ways to maximize profit margins.
Source: Retail Info System News, July 2013