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What is retail management software?
Retail management software helps retailers of all types and sizes manage the financial reporting, accounting, and operations of their retail stores. Modern retail management solutions help organizations understand their consumers' buying behavior, thus improving sales and customer satisfaction. Typically, these systems include features like inventory management, employee management, reporting, and analytics. Retail management software integrates core retail processes with other systems, such as point of sale (POS), human resources, marketing, eCommerce, and customer relationship management (CRM).
The benefits of retail management software
- Streamline transaction processing: Setting prices and tracking transactions manually can lead to costly errors. Retail management software automates tasks like barcode scanning, improving accuracy and speed during the checkout process and reducing transaction processing-related errors. Automated retail management software also offers features like suggestive selling, which facilitates upselling and cross-selling of additional products to customers during checkout.
- Minimize errors and improve accuracy: Retail management software offers automation that reduces human intervention in day-to-day retail operations and decreases the impact of human error in processes like inventory management, employee management, and sales.
- Boost Sales: Retail management systems help improve sales by keeping track of fast-selling items, as well as inventory lying unsold in your warehouse to help retailers respond to demand, or lack thereof. In addition, these systems can help retailers connect with customers online, and learn from their shopping and social media behaviors. Retailers can use retail management software that is compatible with multiple devices to aid data collection, and learn customer likes and dislikes, and use that information to boost sales.
Typical features of retail management software
- Inventory management: Track and manage the quantity of stocked goods to maintain proper supply levels. Provide store managers with real-time reports on inventory levels.
- Point of Sale (POS): Process point of sale (POS) operations such as billing, payments, cash register transactions, and more.
- CRM: Track customer information and manage a centralized customer database.
- Purchase order management: Track and manage purchase orders.
- eCommerce: Manage online storefronts.
- Email marketing: Create email campaigns and send marketing emails to showcase products and reach/communicate with customers.
Considerations when purchasing retail management software
- Scalability: While purchasing a retail management solution, it's important to keep in mind the volume of items and transactions your business needs the system to process. Another scalability factor is the software's ability to execute your work processes with a high degree of labor efficiency. Be sure to invest in a solution that not only meets your needs now, but will meet them in the future as your business grows.
- Integration: Since retail management as a whole requires a lot of different processes and functions, be sure to evaluate the integration capabilities of retail management software before making a purchase decision. Consider integration with subsystems such as price management, replenishment, and merchandise planning, or external solutions related to accounting, eCommerce, and human resources.
- Cost: Retail management software can be offered for a one-time licensing fee or on a subscription basis. These systems can also incur additional costs related to hardware, database licenses, and technical support. Additionally, certain businesses may only need a subset of retail management solution's functionality rather than the entire system. It's imperative for your business to conduct extensive research and speak with vendors to understand a solution's pricing structure to avoid overpaying for functions you don't need or unexpected costs after investing in a system.
- Suitability: Not every retail business is the same, and some retail management systems focus on specific niches compared to generic retail management (e.g., retail management software for apparel, spa services, fitness). Such software comes with prebuilt specific industry templates and easy-to-understand interfaces designed for users within that particular market. If available, consider purchasing a category-specific retail solution for your business to avoid costly add-ons in the future and benefit from technology focused on your specific business needs.
Relevant retail management software trends
- Artificial intelligence (AI) is helping recommend products to customers: Understanding customer preferences and their buying behavior has always been important for businesses striving to retain their customers and boost revenue. AI-driven retail management software is automating this process by learning customer buying behavior and patterns, and recommending related products to drive sales. These enhanced systems can also enhance retailer-customer relationships through user accounts that track behavior, preferences, purchasing activity, and more.
- The internet of things (IoT) is improving retail operations: As technology continues to evolve, the IoT is helping retailers gather vast amounts of customer data with sensors and RFID tags. Products embedded with IoT tags and sensors can monitor purchase date, expiration date, and usage pattern. Here's an example: Tommy Hilfiger is planning to introduce chip-embedded clothing that will allow customers to earn points whenever they wear that clothing at specific locations. This, in turn, helps the brand track and gain insight from customers' usage of their product. In the coming years, expect facial recognition, contactless payments, and other advanced technologies to improve IoT-driven retail operations and the shopping experience.
- Omnichannel is driving retailers to improve the customer experience: As technology continues to connect customers to online and physical stores using social media, eCommerce websites, and other platforms, retailers are tapping into every possible touchpoint to improve the customer experience, from product research to purchases and returns. Retailers are improving in-store experiences as well as online purchasing by simplifying the process across all channels.