What is the main reason for mainstream digital transformation in the retail sector? It took me some time to find the answer. There are many reasons, but the most compelling one is the customer behavior shift. It is precisely discerning and digitally-savvy customers who force retail companies to automate their businesses more and thus remain competitive or, ideally, stay ahead of the curve.
Retailers endeavor to roll out high-tech solutions to streamline the workflows and meet consumers' needs for the omnichannel and touchless experience. On this digital journey, retail companies prioritize the importance of enterprise resource planning (ERP) implementation as one of the leading solutions for propelling their businesses.
Leveraging retail ERP enables organizations to smoothly perform both back-office processes and front-office functions to optimize performance from the warehouse to the point of sale. But today's significant market demand shift due to the COVID-19 pandemic requires advanced solutions to stay afloat in the ever-evolving retail world.
Keeping up with new updates that transform ERP is necessary rather than only desirable. Take a look at these retail ERP trends to get your business moving in the right direction.
1. Cloud-Based ERP
Cloud-based solutions are affecting all areas of business, including the retail sector. If in the pre-pandemic times the effectiveness of cloud solutions was not so uniformly valued, today the ability to streamline business operations remotely with the help of cloud solutions has taken on a whole new meaning.
The widespread adoption of cloud ERP systems rather than on-premises ones is due to several other factors: simplified deployment, cost-effective ongoing maintenance, and flexibility when it comes to adding new modules.
According to Forrester research, ERP implementations deployed as traditional on-premises systems are at only 24%, while the rest is cloud and hybrid solutions.
2. Two-tier ERP
Two-tier ERP is the best solution for large-scale multi-location companies or corporations with subsidiaries. The core feature of such an ERP is the capability to remain as one system but operate at two different levels. To put it simply, it is a double ERP roll-out but within the same company.
The first tier is the solutions used at a pan-corporate level, while affiliated companies manage the second tier. Each level can customize the system to its own needs: the parent company can use the ERP for their financial and data analytics operations while subsidiaries adjust the system to their specific daily processes with connection to the central ERP system.
The two-tier ERP approach makes a favorable impact on business for several reasons:
3. Baked-in Artificial Intelligence
AI-infused ERP systems have been out there for a long time. However, while some vendors previously provided systems with the option of further AI implementation, today the AI option is built into many ERPs as a ready-to-use solution.
Deploying AI enables a company to significantly optimize its operations through AI's ability to process and analyze vast amounts of data and generate business insights based on the processed information. Such an approach can prevent your business from fraud and unexpected system failures or rectify them in time when they are detected.
4. Future-oriented Analytics
The challenging 2020 year has shown how vital analytics is. The consequences of COVID-19 seem to have affected all areas of life, also leaving companies unprepared for such dramatic changes in the global economy.
The deployment of data analytics into today's retail ERP solutions has not been long in coming. Vendors offer retail companies ready-to-use ERP systems with in-build reporting and analytics modules that allow making data-driven decisions. An analytics-powered ERP is able to gather, arrange, process and store data for forecasting the near future regarding the business effectiveness and market situation.
For the retail sector, a data analytics system paired with other integrated control systems (warehouse management, for example) might prevent stock-outs, overstocks, ensure a smooth supply chain, and maintain the company's financial stability.
5. 3D Printing
Additive manufacturing (AM) is proliferating in all sectors of the economy. While the AM introduction into the manufacturer's workflow simplifies creating the final product, consumers get satisfaction from a personalized approach.
Integration of AM into ERP systems is gaining traction now as such ERP systems are able to control the process of product parts creation, providing the data on the product's stage of completion.
Investing in ERP with a view to moving to the cloud, adopting AI, and getting into detailed analytics makes retail companies more responsive to volatile market conditions and shifts in customer needs. Still, it is advisable to thoughtfully consider the needs of both the market and the business to ensure that your ERP system renewal brings maximum benefit to your company and customers.