Avalara > Blog > Industry Insights > 10 signs you need a retail ERP

10 signs you need a retail ERP

  • Feb 4, 2020 | Brightpearl

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Like any retail or ecommerce business, there are a lot of moving parts affecting your daily operations. You have to manage your sales (often across channels), check your inventory, handle finances, pay your staff, and most important of all, keep your customers happy.

To stay ahead of the pack, you need to find ways to improve and streamline your processes to become more efficient; introducing retail ERP.

What is retail ERP?

Unlike generic ERP systems, a retail ERP is specifically designed for retailers, which means it can easily support the essential features required for your unique technology stack. 

At its most basic level, a retail ERP integrates — or connects — the multiple processes that make up the whole back-office operation. This creates a shared database or hub to support all the departments within your business.

By consolidating data in this way, you’ll reduce human error and save precious time, which can be reinvested in better merchandising, branding, and customer experience to drive conversion rates, and ultimately, grow your retail business.

But how do you know when your business needs — and is ready for — a retail ERP? Here are 10 signs that indicate your business needs one right now.

1. You’re selling across multiple sales channels

Managing a retail business is tough enough in today’s competitive climate. Throw multiple sales channels into the mix and everything becomes that much more complex. 

Do you really want to have to log in to multiple different systems to keep everything updated? 

Without a retail ERP in place to consolidate all orders, inventory, as well as customer and financial data, that could be your future.

2. You’re logging in to multiple systems anyway

Even if you only sell on one channel, you may find you’re still logging in to multiple systems. Some examples of this:

  • Order fulfillment and shipping probably happen within your ecommerce admin panel or point of sale
  • Accounts, journals, and financial reports are probably updated via a separate accounts package
  • Customer details are likely updated via a third-party CRM system or even manual spreadsheet
  • Marketing communications are probably sent to customers from a specialist email marketing platform

These are just a few examples but you get the picture; it’s a lot of clicks (and time wasted) for you and your team.

Instead, make life easier by consolidating all of this within one ERP system that sits at the heart of your retail business.

3. Your customers are seeing inventory errors

No matter how many channels you sell on, if your customers are seeing inventory errors then you need to get it sorted. 

Recent Brightpearl research has found that a whopping 77% of 1–3 star reviews left by customers online are directly related to issues they’ve had after they click buy, resulting in an average 33% loss in revenue for retailers. 

By implementing a retail ERP that enables you to track inventory across different locations; quickly scan barcodes during the pick, pack, and ship process; and automate the flow of orders from customer to warehouse, you’ll drastically improve the experience your customers have throughout their buying journey.

4. Your customers are chasing their orders

If you struggle to update your customers in a timely manner, they’ll chase you.

Although your ecommerce website can handle routine communications for you like order confirmations and dispatch notes, the true value of a retail ERP lies in its ability to help you keep track of orders that don’t follow your normal routine. 

For example:

  • Has an order been flagged as fraudulent?
  • Have you oversold on inventory you actually don’t have in stock after all?
  • Will there be a delay in shipping because your cutoff times haven’t been met?

Whatever the issue (or root cause), your customers need to know about it.

A retail ERP enables you to keep track of situations just like this and provides you with the functionality you need to quickly send order status updates to customers — and in bulk if you need to.

5. You can’t update customers when they chase

What’s worse than customers chasing their order? Not being able to find their order or customer details when they do!

This is a real issue — especially for multichannel merchants.

Your customers don’t want to be asked 20 questions before you can find their order; and what if they’ve misplaced their order number?

Your customer service staff need robust systems in place to be able to find purchase history information quickly using a variety of search terms like customer name, order number, and delivery address.

6. Your processing costs are skyrocketing

A core retail KPI you should be tracking is your Processing Cost per Order, which determines how much it’s costing you to get each order out the door.

If it’s costing you far more to ship an order than the revenue it’s generating then that’s a surefire way to go out of business.

A fast and efficient fulfillment process and a clever warehouse setup will enable you to bring your processing costs down. But you need the right systems in place to be able to facilitate both of those things.

7. Your perfect order rate has hit rock bottom

Alongside your processing costs, another core retail KPI is your perfect order rate, which can answer questions like:

  • How often are the incorrect items shipped out to your customers? 
  • Are orders being shipped on time?
  • How often are products sent back to you?

Without the right systems in place to easily keep track of sales and inventory, you’ll likely see your perfect order rate drop further and further below a perfect 100%. 

8. You’ve had to hire a team of people to manage your sales channels

Although it’s okay to have a whole team of people picking, packing, and shipping orders within your warehouse, you shouldn’t have to hire a team of people to update inventory, order statuses, and accounts journals.

That’s what technology, particularly retail ERP, is for, so your staff can focus their time and energy on actually growing and marketing the business.

9. You’re fearful of the holiday season every year

If you don’t have adequate processes or systems in place to handle a large surge of orders during the holiday season then you could be facing a whole hoard of overselling issues, stressed-out staff, and unhappy customers.

Instead, with a retail ERP solution, you’ll be able to update inventory and accounting in real time across tens of thousands of orders per hour, so you and your team can focus on physically getting orders out the door in time for the holidays.

10. You’re manually calculating sales tax every year

Just like ecommerce, sales tax is a complex beast to master. Not only do different products require different tax rates, so do different states, cities, and other jurisdictions.

If you’re manually calculating your sales tax, you’re probably tearing your hair out, or worse, you could be facing fines for incorrect documentation.

By implementing a retail ERP that supports an automated sales tax integration like Avalara, you’ll eliminate errors, speed up processes, and ensure your business is tax compliant.

Next steps

Did any of the above situations resonate with you? Then you agree you need to take the next steps toward implementing a retail ERP.

1. Make a list of your top must-have retail ERP features

Different businesses require different things. For example:

  • Does your retail ERP need to facilitate sales across multiple channels? 
  • What about both offline and online channels? 
  • Are you operating out of different warehouses or warehouse locations?
  • Do you need EDI connections so you can work with large suppliers and wholesalers?
  • Do you offer Buy Online Pickup In Store to your customers?

These are just a few examples but you need to capture all of this and more to check whether your chosen retail ERP solution can successfully support you and your unique business.

2. Don’t forget to document your nonfunctional requirements

Alongside your must-have product features, you’ll also need to consider important nonfunctional requirements too. These include things like contractual terms and conditions, pricing structures, software performance and uptime, software implementation, and support services.

It’s important to understand and capture all of these as most retail ERP projects fail, not because of a lack of features, but because of poor migration, poor adoption, poor change management, and a lack of ongoing high-quality support when you need it most.

3. Evaluate vendors according to your requirements

For most retailers, choosing a retail ERP is a task you’ll undertake perhaps once every five years — or even less frequently than that. It may even be the first time you’re doing it. So it’s okay if you’re not completely familiar with the process yet.

The first important thing to remember is that you need to ask the right questions to ensure your chosen vendor is a risk-free, future-proof, and scalable solution.

To help you with this all-important process and decision, check out Brightpearl’s selection criteria checklist, designed especially for retail and ecommerce businesses just like yours.


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Partner
Brightpearl
Avalara Partner Brightpearl
Brightpearl is a retail operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business. The complete back-office solution from Brightpearl includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse management, and logistics. In addition, the solution has high-performing connectors to the major ecommerce platforms, including Magento, BigCommerce, and Shopify. Over 1,200 businesses in 26 countries use the Brightpearl platform, which manages over 10 million transactions and $3 billion of business a year.