An enterprise resource planning system is a wonderful tool for optimizing your business. When implemented and operated properly, it helps companies run without bureaucracy, silos, delays, and miscommunication between departments and third-party vendors. Some executives, however, believe that ERP software is suitable only for large enterprises with many physical facilities, hence many companies that operate primarily or fully online overlook this solution. This is unfortunate, as retail ERP systems have the potential to boost online businesses’ productivity, and one of the sectors where they can make a difference is retail.
Three Main Challenges of Online Retail
Despite online retailers having different business models, the size of their companies, locations, and target customers, there are three challenges that are common across the entire market.
- Customers are used to multichannel experiences
Anyone can walk into a brick-and-mortar store and learn everything they need to know on the spot. Online shops are a little more complicated. If customers can’t find an easy way to contact a representative, they move on to the competitor. This means that the more available options for interaction there are, the more likely customers are to stick to the particular online store. Keeping up with multiple channels of communication can be tricky, especially when the same customers are reaching out through different channels.
- Stock monitoring and management is complex
Unless one runs an online business from their own garage, they usually utilize fulfillment facilities and providers to reduce shipping costs and time. This means that information about changes in the availability of particular products should be delivered fast from the facility to the website and provisioning parties. Delays or errors in this process can result in understocking or overstocking that cause customers’ frustration and drive up costs.
- Communication among departments is often disrupted
This one became especially glaring during 2020 as most employees switched to the work from home mode. Turns out, in many ecommerce companies operations across departments are not synchronized. Any deviation from the routine, like an employee’s sudden illness, can cause chaos and break the workflow. Data gets siloed and withheld from managers that need it for making an informed decision.
How an ERP Solution Can Help
According to Statista’s global survey, 46% of ecommerce decision-makers think they have tough competitors. In such a market, strategists pay their special attention to rational resource management, as even slight differences in costs, supply chain operations, or customer service can influence a company’s success. An ERP solution is a perfect tool to address all the three main issues discussed above and then add even more value.
- Connecting front-office, fulfillment facilities, and vendors
An ERP solution makes exchanging the stock input, output and movement information between different departments and third parties easier and more transparent. It can also provide smart alerts for the front-office managers in case of status changes, the risk of product shortage, and other urgent matters.
- Automating, optimizing, and organizing collaboration among the departments
To achieve positive results, a company should have a well-functioning enterprise ecosystem. Software that supports each department can be integrated with the retail ERP that facilitates the flow of inter-departmental information. It helps optimize key processes and workflows to avoid disruptions due to unexpected events by automating the routines and makes all data from across the company unified and available in one place that is accessible for all.
- Tying in all of the communication channels and capturing more meaningful data from them
A CRM system integrated with the ERP allows customer service representatives to easily gather all customer interaction information across different touchpoints under one roof. No matter how many input sources there are, all data about the customer is stored in one place, easily accessible and ready for use. This prevents mishaps due to the loss of parts of the ongoing conversation with a particular customer, and at the same time makes it easier for analysts to learn customers’ behavior and come up with better loyalty programs. As a result, the company enhances the customer experience and earns more trust.
Is Your Business Ready for the ERP solution?
Most online retailers can benefit from an ERP system in one way or another. Whether or not a company is ready to adopt it is not a question of “Is my business large enough?” or “Do we really have that many assets to manage?”. Instead, when considering getting an ERP, think about what resource management optimization can do for you.
A well-oiled mechanism of interaction among the departments and partners can speed up the financial processes, shorten the order fulfillment time, provide more data to decision-makers and give valuable insights for better strategic planning. Workflows supported by an ERP are scalable, so as your business grows, it will stay just as organized and easily managed.
Online retail companies have always presented themselves as modern, fast, and user-friendly. It is vital for their competitiveness to support these qualities without overspending money and effort, and ERP is one of the pillars of such a strong back office.
