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Why today’s retailers can’t afford not to migrate to the cloud

(Image credit: Image Credit: Everything Possible / Shutterstock)

I have these conversations with numerous retailers on a regular basis. Many are faced with increasing management costs and burdens of legacy, on premise ERP systems, which stand in complete contrast of retail innovation. They’re simply not able to truly operate in real time and take full advantage of modernised functionality and emerging features like automation being offered in a cloud-based retail operations platform.

Taking migration plans from legacy, on premise ERP to the cloud is an endeavour. No argument there. But let me share with you why now, more than ever, is the time to set your plans in place. The good news is that the process is much less expensive than you may think and will begin to pay for itself quickly.

The lack of innovation is a retail dilemma

The PA Consulting Group (opens in new tab) advises organisations on how to best meet business goals, and has observed that innovation – pragmatically applied – can be a powerful force for competitive advantage and growth.

By canvassing the opinions of 821 senior executives across the globe, PA found that 66 per cent of executives (opens in new tab) believed their companies won’t survive without innovation and adopting new technologies. In contrast, 37 per cent stated they’d made little to no moves towards making the innovative changes they felt their business needed to survive.

Legacy ERP is a perfect example of ‘anti-innovation’. It impairs the ability for you to operate as an omnichannel business, where all channels work seamlessly together; where you can offer products wherever and whenever customers are browsing, while still providing the level of service they demand.

Being able to support omnichannel goes beyond bandwagons and buzzwords. It’s about exceeding customer expectations, so that the only thought on a shopper’s mind is how much they love the new spring line from their favourite store, and not whether that store has their size in the colour they want, be it online, in store, or on mobile.

The reality check your legacy operation must face

In order to innovate and move forward, you first need to consider some rather ugly truths.

Reviewing abandoned online basket rates should be a common practice for ecommerce brands. It’s important to find out why purchases haven’t been completed. Are delivery costs too high? Is the product not competitively priced? Could the checkout process be too cumbersome?

Retailers must take a step back and consider how much business is being lost on a daily, monthly, and annual basis, and consider how they are managing their margins. Is it costing sales or weakening the business’s position?

For retailers trying to gain and grow momentum in today’s competitive retail landscape, legacy systems too often present massive barriers to growth. They’re not always able to change prices across the board in a quick and easy fashion, or update inventory in real time. This is especially troublesome for businesses that display stock levels on their website for customers – as inaccurate stock information could put off or mislead buyers. These systems may also be slower at performing software updates to address the latest security requirements – and could require updating manually, putting extra strains on time and resources.

On premise environments typically require a full-time administrator. And 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 also require you to choose your ecommerce platform from their own proprietary marketplace, rather than enabling you to choose a well-known platform, such as BigCommerce, Magento or Shopify, that better suit your needs and budget.

In the modern retail environment, taking the time to do a thorough audit of how your business needs to improve is essential; it will enable you to assess whether on premise ERP can meet the requirements of your business and its customers.

The customer-first approach you must adopt

By migrating to the cloud, you’ll have a single view of your customers, inventory across your warehouses, sales, returns, and a number of other data points. And it’s all real-time data.

You’ll gain true support for omnichannel, with inventory updated across each channel immediately upon a sale or a return, whether it’s in store, online or via mobile. A customer buys a product online but wants to exchange it in store for a different size or colour? No problem. Online checkout systems have improved significantly for both desktop and mobile to make it easy for customers to complete their purchases.

Automation is now your friend. You can create rules to assign incoming orders to a particular warehouse and even a specific shipper by weight or region. When the order ships, the customer is automatically sent tracking information by email or text, whichever they prefer.

Another key benefit is the ability to grow your business without hiring additional 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 can increase your customer reach while preserving profitability.

The time is now for migrating to the cloud

Legacy ERP systems have too many weak points to truly support omnichannel, which is increasingly becoming the operation model merchants must adopt 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 is most likely even higher.

The time is now for migrating to cloud ERP. There’s no doubt that your competition has already made the move or is in the process. While there is a definite investment required up front, it’s a lot less than you may expect. In the short- and long-term, the move will enable growth and profitability, will save your company money, and ultimately, will save your company.

Derek O'Carroll, Chief Executive Officer, Brightpearl Limited (opens in new tab)
Image Credit: Everything Possible / Shutterstock

Derek O’Carroll is CEO of Brightpearl, responsible for the overall company strategy and for delivering on Brightpearl’s mission to automate retail.