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Life Without Retail Management Systems: A Retailer’s Nightmare

Retailer looking exasperated at computer

Have you considered what it would be like to live without an end-to-end retail management system? Maybe you have lived the nightmare before, maybe you still are; however, without a robust retail management system, you may be facing a multitude of issues. To note a few, retailers are often faced with operational inefficiencies, inaccurate information, and poor communication. These issues often become prominent as new employees are added. More employees will increase the chances of a mistake occurring during order entry and will make it harder for everyone to stay on the same page.  Without a single, fully integrated database of information, retailers need more employees for data entry into multiple standalone systems. This, in turn, takes more time to process orders, which results in unhappy customers and ultimately costs your business more time and money.

Operational Inefficiencies

As your retail operation grows and employee count rises and changes, so should your order fulfillment process. What used to be a manual process when your operations were smaller, now may not be an efficient way to handle sales orders, as your transaction and order volume increases. For instance, you and your brother Fred manually process e-commerce transactions because of the low volume of e-commerce orders you receive. Now your operations have expanded and your e-commerce transactions have greatly increased, so you and Fred can no longer handle the volume of orders. This is where automating your order fulfillment process, using an end-to-end retail management system would streamline the process.

Sticking with our example, you and your brother Fred receive an online order that is to be picked up in-store by the customer. Retail management software tracks inventory, determines where it is in stock, and tracks when it is transferred for in-store pick up. Additionally, your store associate, Olivia, can see when the order is ready for pick-up in the retail Point of Sale (POS) system. Now the customer can come to the store and pick up the order, thus finalizing the order. This eliminates much of the chance of human error and increases operational efficiencies, because the orders are streamlined with the automated process.

Inaccurate information

Have you heard of the saying, too many chefs spoil the broth? Similarly in retail, without a retail management system, data must be manually entered multiple times into various standalone systems. For instance, Cole in accounting uses a standalone module for receivables and payables, Matt in Sales uses another system to enter orders, and Olivia in Operations use an entirely different system, causing major data inaccuracies across the organization.

For example, let’s say Olivia, our sales associate, processes a sale on an item without a price tag. Olivia enters the SKU number manually because there is no single database to look up the item, but accidently mixes up one number…Oh no! Without noticing, the customer pays for the incorrect item and finalizes the sale. Now you have an item listed as “in stock,” even though the item was sold to the customer, but you also have an item that is actually in stock but reflected as “out of stock” in your records. Now do you see how these types of data inaccuracies can wreak havoc on your retail operations?

To reconcile your records and depending on how your business process is laid out, many other employees may have to update records in each separate database, costing the business valuable time and money. Not only does it cost time and money, but an employee could make a similar mistake to Olivia’s and create further inaccuracies in the records.

Poor business decisions

If Olivia’s error goes unnoticed, then the business is stuck with inaccurate information on which to base their important business decisions. You may be wondering, how badly could this really affect my retail business? It could negatively impact your business in a variety of ways. For our purposes, let’s discuss one example.

As top management and C-level executives continue to make decisions, they may not know which database to trust. For instance, Accounting reports $4 million in revenue, Operations reports $4.5 million, and Sales reports $5 million. But seriously, how can top management make sound business decisions if your data is not dependable?

Poor communication across departments

Due to each department having a separate database, information is not easily accessible throughout the organization. If Kelly from Marketing wants information regarding inventory levels, she will have to ask an employee in Operations to provide it. This wastes time and can be frustrating as employees are forced to wait to receive it. A more serious issue is Customer Service not having the information necessary to solve a customer problem. If Customer Service does not have the necessary information in their database, the customer has to be put on hold while Customer Service contacts other departments for the information. This will reflect poorly on the company.

With retail management software, data only needs to be entered in once

A retail management system increases the speed and accuracy of order processing, reduces the amount of employees needed, and creates one version of the truth. It greatly facilitates communication between departments, saving the organization money by avoiding costly mistakes. Top management can rest assured that when making decisions, data is accurate.

If you’re looking for a new retail management system for your organization, talk to the retail experts at ArcherPoint.

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