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The retail merchandising software market has become increasingly complex over the past decade. Large ERP vendors and retail specialists have blurred the lines between inventory management, merchandising, and supply chain management, making the merchandising market appear much more complex than it really is.
In order to help you navigate your software purchase, we've written this buyer’s guide to help you understand the market and know where to begin your research.
Here’s what we’ll cover:
Small and mid-sized retailers can learn a lesson that tier-one retailers have learned the hard way: merchandise planning can and should be a precise science. If not, poor merchandise decisions will usually lead to lost profits. On the most basic level, merchandising software helps retailers plan and execute merchandise operations, including deciding which items to stock, where to stock them, when to promote them, and how to price them. It eliminates the guesswork that retailers have been conducting for years, often based on subjective experience and formulas in Excel spreadsheets.
Core features for merchandising systems include pricing engines that help retailers price items based on competitors’ prices, gross profit margins, demand, past sales performance, and vendor incentives. Systems also help retailers recognize where given items sell best and under what conditions. Analytical tools help retailers see the impact of their decisions to better plan future merchandising strategies.
Buyers of merchandise management software will essentially have two options: implement a best-of-breed package or a complete retail suite. Best-of-breed buyers will enjoy being able to purchase a merchandising system that exactly matches their needs, while they will face the challenge of integrating it with their existing applications. Integrated suite buyers will like having one, integrated system, while they will face a larger spend and a potentially more complex implementation. The decision will be based largely on retailers’ existing applications, their immediate needs, and their budgets.
The retail merchandising market becomes much less cluttered when buyers approach it with their respective deployment strategies in mind.
|Buyers interested in...||Should evaluate these systems|
|Vendors who offer merchandising only on a best-of-breed basis||JDA|
|Vendors who offer merchandising on a best-of-breed basis AND as part of an integrated suite||SAP, Epicor, Jesta Vision|
|Vendors who offer merchandising only as part of an integrated retail suite||Celerant, Cybex|
Various trends impact the retail merchandising solutions market. The primary trends include the following:
Properly-implemented merchandise management systems should yield a number of benefits that impact multiple aspects of the enterprise. The most common benefits include the following:
As with all technology implementations, there are a few potential issues to consider when comparing solutions for retail merchandising. The most common concerns we hear about are related to ease of use and costs. This first risk is a risk common to most enterprise IT implementations. IT purchasers should ensure that the system is not overly complex and should not try to save costs by reducing training. Proper training is essential to merchandise systems and improper training is a large contributor to failed implementations. Like most enterprise systems with robust analytical tools, merchandise systems can be very expensive, but the costs of not having a formal system are very high. Retailers should pay close attention to revenue and profit margin growth after implementing merchandising software to gauge their overall return on investment (ROI). Most enterprise retailers should find that a properly-implemented system will lead to a positive ROI.
Retail Anywhere. Retail Anywhere announced in June 2012 that it was named NetSuite’s New SuiteApp Partner of the Year, which was presented at NetSuite’s annual conference in May. Retail Anywhere integrated their best of breed POS solution with NetSuite’s cloud-based ERP system, providing front and back office support for retailers.
JDA. In April 2012, JDA introduced one of their newest retail products: Shelf-Connected Cloud--a solution that literally connects manufacturer’s supply chains to retailers’ shelves. The solution was designed to improve on-shelf availability, remove unnecessary inventory across enterprise, and leverage cost savings throughout the supply chain. “In today’s ultra-competitive markets, the ability to manage products across multiple channels and the entire product lifecycle becomes essential to maintaining profitability and competitiveness,” said Fred Baumann, Vice President, Industry Strategies, JDA Software.
Celerant. Celerant Technology announced in March 2012 that it recently acquired CAM Commerce Solutions--a subsidiary of Robertson Piper Software Group, a West Coast retail software provider. “Our acquisition of CAM enables Celerant to expand our presence and to experience a significant level of growth as a company,” stated Ian Goldman, Celerant President and CEO.