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Is It Time To Upgrade Your Retail ERP System? Ask These 5 Questions

Chart showing overall increase over time

Your retail ERP solution can determine how well your company rides the tide of a changing marketplace. Is your system ready for the next retail wave?

Here are some questions that can help determine if your system needs an upgrade.

  1. Does the original vendor continue to support your current retail ERP system in terms of following industry standards, such as ISO, or offer technical assistance to keep your ERP compliant?
  2. Is your system compatible with emerging smartphone technology, such as mobile digital coupons?
  3. Does your system offer more integration with Microsoft Excel spreadsheets? Past retail ERP solutions could import or export ERP data into a spreadsheet. Now, some ERP systems offer more intuitive integration, such as copying and pasting selected columns and rows between an ERP screen and an Excel spreadsheet. Along those same lines, if you find yourself often reverting to using spreadsheets instead of interpreting data directly from your retail ERP solution, it could be a sign that you’re working around your system instead of having it work for you.
  4. Does your point-of-sale (POS) system and your current retail ERP solution operate as “islands of automation”? It might seem fine that your POS system simply acts like a POS, and that your retail ERP solution acts as the back-end support that does the inventory ordering or tracking, but there should be integration between these two systems.
  5. Is there a seamless flow of data among all of your operating systems? For example, if you also have an e-commerce solution that helps to manage your online shopping channels, ideally it should draw from the same database used by your retail ERP solution. This is different from transferring or importing data from one software solution to another. Ensuring that all your retail software solutions draw from the same database of information ensures consistency among your various shopping channels.

These questions highlight the improved features of newer ERP solutions that make it easier for retailers to adjust to changing market demand. Let’s take a look at one retail ERP system improvement: maintaining product “variants.”

Here’s an example of how it works: One style of a medical scrub sold by a uniform apparel store comes in various sizes and colors, but an older ERP solution is limited in how that scrub is listed in the system. Instead of listing each scrub top by size and color, an older ERP solution can only categorize the inventory by price. So entering style number 50101A into the store POS represents a specific scrub top for all small, medium and large sizes in all colors, since they have the same price. Style number 50101B represents the same scrub top style in sizes extra-large and double extra-large, since they have a different price.

However, with a newer retail ERP solution, it’s possible to specify product variants. So if medical scrub top style 50101 comes in five different colors in five different sizes, the new system can create 25 variants of that product. When each scrub top has its own bar code according to size and color, it can help retailers keep track of sales patterns and more accurately determine replenishment rules, inventory target levels or reorder points for each scrub top color and size.

An ERP solution with a product variant feature provides more insight into inventory visibility. While an older ERP solution might indicate that you have 10 items left of a specific scrub top style, but won’t be able to specify which colors are left. Without that inventory insight, you could be ordering too much of one color and losing sales because the other color was the hot-selling item.

A new or upgraded retail ERP solution can offer an immediate return on investment by tracking inventory and sales of a product variant. Without this feature, you will face a tough choice by either setting up each color size for the style as a separate inventory item or just tracking things at the style level in your ERP system. Both have their downsides. If you just track at the style level, the only way to know how many colors are left of a specific scrub top is by physically counting the items on the store shelves. However, this is extremely error-prone, because apparel display racks or shelves can become disorganized as customers sift through the products or place them in different areas of the store as they shop. If you set up each color/size combination as an Item, then you have decreased visibility as to how the style as a whole is performing, as well as sore hands and fingers from having to enter so much data in the system.

Knowing whether it’s time to upgrade your retail ERP system depends on a handful of factors, such as compatibility with modern retail features like mobile. But when retailers take advantage of features in newer retail ERP solutions, it can greatly improve how they respond to customers and market demand in the modern retail landscape.