Retailers don’t need to read the daily headlines about the state of retail to be aware that innovating and streamlining your operations is essential to staying competitive and growing your business.
Retailers are facing increasing management costs and burdens of legacy, on-premise POS and retail management systems, which stand in complete contrast of retail innovation. With these in place, retailers are unable to operate in real-time and take advantage of modernised functionality and emerging features like automation offered by a cloud-based retail management system.
Taking your migration plans from legacy, on-premise POS to the cloud is an endeavour. But, at a time when retailers need to balance growing customer demands with cost-cutting methods, they simply cannot afford to pass up this opportunity to gain a competitive edge. Contrary to what some believe, the process is much less expensive than some may think and will quickly begin to pay for itself.
The lack of innovation adoption is a retail dilemma
The PA Consulting Group works with worldwide organisations to advise them on how to best meet business goals, and in their words, their firms have “proved time and again that innovation —pragmatically applied—can be a powerful force for competitive advantage and growth.” In their recent study, they “were frustrated to see organisations forgoing opportunities in future competitiveness, productivity and financial gain.”
Surveying 821 senior executives across the globe about innovation, PA’s findings showed that 66 percent of those executives believed their companies will not survive without innovation and adopting new technologies. In contrast, 37 percent stated they’d made little to no moves towards making the innovative changes needed to survive.
The point is clear: retailers are not alone.
Legacy back office systems impair a retailer’s ability to operate in a way that all channels work seamlessly with each other in an omnichannel model. This means a retailer can deliver goods and services wherever and whenever consumers are browsing and shopping, while providing the level of service shopper’s demand.
Being able to support omnichannel goes beyond bandwagons and buzzwords. It’s about exceeding customer expectations, so the only thought on a shopper’s mind is how much they love the new spring line from their favourite store. Not whether that store has their size in the colour they want, be it online, in-store, or on mobile.
A researcher for Software Advice, offers some advice about the benefits of cloud-based retail management versus legacy POS: “With tons of products spread throughout multiple locations, getting a firm handle on company-wide stock levels can be a huge challenge. But it’s efficiency that multi-store merchants need to achieve in order to streamline inventory management.”
Taking stock of one’s legacy retail operation
The first step is a reality check of one’s retail business. In order to innovate and move forward retailers first need to take a look at some ugly truths.
Reviewing abandon shopping cart rates is common practice for ecommerce organisations. Many retailers have ways to woo the customer back into completing the purchase. Just as important is the story behind why the purchase wasn’t completed. Were shipping charges too high? Product not competitively priced? Check out process too cumbersome and lengthy?
If you take a step back, how much business is being lost on a daily, monthly, and on an annual basis? How are you managing your margins, and is this costing you sales or weakening your business position?
Legacy systems have their limitations and aren’t always able to update inventory in real-time, or change prices across the board in a quick and easy fashion. Flash sales have proven benefits to retailers with the right approach and systems in place. However, they can also backfire on retailers with outdated retail management platforms that can’t handle the overload on their servers or on their shipping and customer service staff. Frustrated customers can then take to Twitter or Facebook to air their grievances, and we’ve all seen how that can go for brands.
If your checkout process requires a number of hoops to jump through because of how it was configured years ago, how much would that cost to streamline and update the process, and is it worth it?
What about security? How well is your legacy system sending software updates to address the latest security requirements?
On-premise environments typically require retailers to employ a full-time administrator. When it comes to support, these platforms are not always retail-centric, making technical issues more difficult and time-consuming to resolve. Depending on the vendor, many may require you to choose your ecommerce vendor from their proprietary marketplace instead of allowing you to choose from other solutions like Shopify, BigCommerce, or Magento that may well better suit your needs and budget.
Taking the time to thoroughly audit all the ways your unique retail business needs to improve each operational area -- order processing, pick and pack, shipping, inventory management, invoicing, and customer service -- will enable you to assess whether your on-premise POS system can meet these requirements.
In addition, if you’re spending all your time, resources, and a sizable portion of your operational budget just keeping up with back office operations, that means you're likely neglecting your front office. Balancing the two is an essential component to running a competitive, growing business.
A study by Gartner Research in March 2017 focused on taking a new industry view for retail and consumer goods, stated that the transformation many retailers are currently experiencing requires a systemic approach, “Firms must redesign the front of the house while also improving the backend infrastructure necessary to power this kind of agile commerce ecosystem.”
How cloud-based retailers deliver a ‘customer first’ experience
Now that we’ve addressed the weaknesses of a legacy POS and on-premise retail management system, let’s see how each of those pain points are improved by migrating to a cloud-based platform.
First, retailers will now have a single view of their customers, inventory in all y warehouses, sales, pending orders, returns, and a number of other data points. All of this information will also be available through real-time data.
True support for omnichannel, with inventory updated across each channel immediately upon a sale or a return of an item to inventory: in-store(s), online, mobile, eBay, or Amazon. Now it’s no longer a problem, if a customer buys a product online but wants to return it in-store in exchange for a different size or colour.
Online check out systems have been enhanced significantly for both desktop and mobile to deliver an easy way for the customer to complete their purchase, reducing the likelihood of customers abandoning their transaction.
Automation provides retailers with fresh opportunities for success. You can set up rules that assign orders coming in from a specific regional area to a specific warehouse, or designate to a specific shipper by weight or region. When the order ships the customer automatically receives a notification by email or text with the tracking information.
These are just a few simple examples, which illustrate the power of automation to help retailers customise and personalise their operations without incurring the cost of outside IT services or additional internal resources.
Another key competitive advantage is the ability to expand your business without the need to pay for more back-office staff. Automated design significantly reduces the need for manual processing. You can handle the holiday rush and determine ahead of time whether certain discounts benefit your business, or if strategic flash sales will increase your customer reach and still preserve margins and profitability.
Forrester Consulting and Accenture Interactive partnered on a study, where their number one finding on delivering a premium consumer experience was that, “With customers in the driver’s seat of their interactions with brands, businesses must create positive and relevant customer experiences across channels and touchpoints. As a result, digital development and customer experience improvement are two key priorities for businesses.”
The move to migration
Legacy on-premise POS and retail management systems have too many weak points to truly support omnichannel, which has increasingly become the operation model today’s retailers need to compete and meet customer demands. The cost to maintain and update these systems is not going down anytime soon. The additional costs to your business by sticking with the status quo will only continue to rise.
The time is now for migrating to a cloud-based retail management platform. There’s no doubt that your competition has already made the move or is in the process. In spite of the definite investment required up front, it’s a lot less than many may expect. Ultimately, in both the short and long term, the move will unlock further growth and profitability, will spare retailers money in a myriad of ways, and most importantly, will save their business.
Derek O’Carroll, Chief Executive Officer, Brightpearl (opens in new tab)
Image Credit: TZIDO SUN / Shutterstock