From a technology perspective, it’s a glorious time to be a retailer. Even the most basic retail point of sale (POS) systems on the market today have evolved into full-fledged retail management systems. In fact, "retail management system" is probably a better name for today’s POS systems, given the many features they offer.
But what are the key features you should be looking for in a retail management solution? And what about all the other options, such as mobile devices and cloud-based deployment? There are no doubt a lot of decisions to be made. But don’t worry, we’re here to help. The goal of this retail management software guide is to help you get a snapshot of what’s in the market so you can determine the best system for your business.
Here’s what we'll cover:
What Are the Common Features of Retail Software?
What Are the Benefits of Adopting Retail Software?
Essential Hardware for In-Store Retail Management Systems
Retail Management Software Tips for New Buyers
Recent Events You Should Know About
There are some core features that all retail management systems offer. The complexity and breadth of these features varies between systems, but in some capacity, a retail management system should offer the following five features:
|POS/Transaction automation||Automates the assignment of prices to items at checkout and processes payments. Mitigates some human error from cashiers. Adjusts inventory levels accordingly.|
|Inventory management||Tracks inventory levels and makes real-time adjustments as products are purchased. Alerts retailers when stock amounts drop to defined level. Allows for more efficient and detailed organization of inventory. Offers reports on inventory movement to spot trends.|
|Reporting and analytics||Records and analyzes sales data and business performance and turns it into easily understood reports and dashboards. Incorporates inventory figures as well as other expenses to provide accurate snapshot of revenue leaks or opportunities.|
|Retail customer relationship management (CRM)||Stores customer information and purchase history. Enables retailers to track contact information, key dates such as birthdays and anniversaries and preferred items to market to customers.|
|Employee management||Completes tasks such as shift scheduling. Often provides ability to clock in and out. Keeps track of employees’ hours for payroll. Can also assign sales commissions.|
For single-store retailers, a retail management system offering these core features is likely more than enough power to get you going.
For retailers with an online store or more than one brick-and-mortar location, there are some extra features you might want to consider folding into your retail management system. These additional feature could include:
|Merchandise management||Enables in-depth structure and organization of inventory management, often broken into assigned stock keeping units (SKUs). Provides analytics for pinpointing purchasing trends. Interacts between multiple stores to create one master merchandise repository.|
|Warehouse management||Automates the tracking, locating and management of inventory within a warehouse. Commonly includes capabilities such as positioning/locating system for products, order receiving and invoice management.|
|Business intelligence||Similar to the retail reporting and analytics capabilities of a POS system, but with increased detail to accommodate larger businesses, e.g., multi-store data integration and analysis.|
A properly implemented retail management system should help business owners drive more sales, better manage inventory, efficiently direct employees and get back more time in the day due to process automations.
More specifically, the benefits of using a retail management solution include:
Increased efficiency at checkout. Perhaps the most important benefit of retail software is the improvement at the point of transaction for both employees and customers. Retail systems integrate with credit card processors, cash drawers, digital displays, receipt printers and barcode scanners to minimize transaction completion times.
Improved inventory and merchandise management. As you and your retailer peers know, maintaining proper inventory levels is a delicate dance. This is especially difficult with little or no software support for tracking and controlling inventory. Insights gained from inventory and merchandise management features provide unparalleled transparency for managing stock levels. For example, you can set up automatic ordering so that when stock levels reach defined levels, orders automatically go out to vendors for restocking.
Actionable customer management insights. Retail CRM applications enable you to learn about and track customers, so you can offer more personalized interactions. Customer databases that house purchase histories, contact information and even loyalty program profiles allow for targeted emails and other marketing promotions. Developing a strong repeat customer base is often dependent upon the effectiveness of your CRM.
Overall increased efficiency and transparency into business. Retail management software eliminates much of the grueling time spent completing tedious manual processes. This gives you time back to spend deepening relationships with customers, monitoring and training employees and optimizing inventory and business performance.
In our breakdown of what exactly a POS system is, we outline some key hardware features that should not be overlooked. These same must-have tools apply to new retail management software as well. Don’t let consideration for the following retail hardware slip through the cracks:
If you’re looking to upgrade from a POS to a system with more retail management features, you likely already have most of this hardware. If so, you’ll want to make sure any existing hardware is compatible with a new retail management solution.
If this is your first system, you need to get all of these pieces in place.
When it comes to reviewing and choosing your new retail management system, the many considerations and options can make it a daunting task. Our survey of software buyers (from a variety of industries) uncovered some effective, commonly-used tactics that work best for building a case and making a decision between systems. The most recommended methods from the survey include:
Shift in fraud liability with EMV payment standard. After the deadline set in late 2015, the liability for covering fraudulent charges has shifted from banks and card issuers to those retailers that are not compliant. For retailers with significant average transaction amounts ($100+), it’s important to ensure your payment process meets the EMV standard.
Adoption of beacon technology still on the rise. Beacon technology has been around for a while. Macy’s, Target and GameStop rolled out beacon technology-based projects between 2014 and 2015. The number of beacons in the retail marketplace are continuing to grow and retailers could have around 3.5 million active beacons working in their stores by 2018.
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