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There are hundreds of inventory management systems available. These programs are designed for all types of businesses: programs for small retailers, programs for big enterprises, programs for specific retail verticals, and programs for multi-channel retailers, to name a few. This buyer’s guide is written to help retail store inventory software buyers understand this complex, fragmented market.
Here’s what we’ll cover:
If you have ever been frustrated by a retailer who has every size of an item in stock but yours, you know the importance and value of having rigorous inventory management in place. On the most basic level, stock management software helps users keep accurate count of stock levels. The primary goal for this application is for users to re-order items before they become fully sold out. Having adequate levels of inventory helps users capitalize on sales opportunities. Of course, it is important that retailers don’t order too much of an item and face not being able to sell it all. Robust systems can help users strike that delicate balance of ordering just enough but not too much.
Core features include sorting items by department or type, establishing of thresholds for minimum quantities and alerts when stock levels reach those thresholds. More advanced systems might include a matrix for tracking items by size, color and style, open to buy modules or integration with purchasing modules to enable automatic generation of purchase orders.
Best-of-breed programs such as Fishbowl can be implemented as standalone systems to manage only inventory. However, many buyers will choose to implement a program that is part of a suite that may include point of sale (POS), warehouse management (WMS), accounting, e-commerce or customer relationship management (CRM). Which type of system you implement will likely depend on your desire for integration with other modules or potentially the size of your company.
You will want to understand what type of buyer you are before evaluating a retail inventory system. We have found that nearly 90% of retail buyers fall into one of the following categories:
The software becomes much less cluttered when buyers approach it with their respective category in mind.
|This type of buyer...||Should evaluate these systems|
|Small buyers||Comcash, Retail Pro, Microsoft RMS|
|Large, integrated suite buyers||Retail Anywhere, Celerant, VuePoint OneVue|
|Enterprise suite buyers||Epicor, Cybex, and Jesta Vision I.S.|
|Multi-channel buyers||Counterpoint, RunIt RealTime, Retail STAR|
Various software trends are impacting the market. The primary trends include the following:
A strong inventory control system should improve the retail organization from the bottom up. Most retailers should expect the following benefits when implementing and using a system properly.
As with all purchases, there are potential issues to consider as well. The first risk associated with using these systems is that they won’t be used properly by employees. This puts owners in the frustrating position of having paid for a system without reaping any of its benefits. The most common reason why employees would not use a system is because of its complexity; we have found that adequate training typically solves this issue. The second most common issue we hear about is data simply “not adding up.” This issue is likely due to the system being outdated, used improperly or not integrating properly with other systems that access its data (often accounting or e-commerce systems). Buyers will want to ensure that implementations are smooth and that integrations are maintained.
Retailers should find that the costs of formal retail inventory programs have never been lower, due primarily to competition among vendors and declining hardware prices. The costs that buyers face will vary widely. Small retailers implementing POS systems will likely find a number of affordable options, while larger retailers looking for more advanced systems will face a larger spend. We speak to many buyers who prefer real-time inventory control across multiple locations. They should note that real-time systems are typically much more expensive than systems that update stock levels once per day, which is sufficient for most small and mid-sized retailers. Most users who implement a system that is adequately sized for their needs should be able to generate a positive return on their investment. The costs of improper inventory control are deceptively high and can be easily avoided with a formal program.
We're able to offer this service to buyers for free, because software vendors pay us on a "pay-per-lead" basis. Buyers get great advice. Sellers get great referrals.