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Retail Dynamics and Technologies
It should come as no surprise that online sales of goods and services has grown exponentially in the last few years, the global pandemic notwithstanding. Global e-commerce rose from 15% of total retail sales in 2019 to 21% in 2021 and is expected to reach 27% globally (30% in North America) by 2026—13.1% annual growth.1 In-store sales are projected to grow as well, up 5.7% in the U.S. for 2022.2 Concurrently, consumers are placing increased demands on retailers, such as convenience and personalized experiences. In fact, 90% of shoppers are more likely to choose a retailer based on convenience than any other factor.3 Hence, retailers must allow consumers to research, buy, pick-up, and return goods as easily as possible—in-store, over the phone, online, via kiosks, and with a frictionless engagement process. Whether selling to consumers (B2C), commercial customers (B2B), or directly from manufacturer to end-user (D2C), this is the essence of an omnichannel sales model.
Technology is vital for suppliers to efficiently stock, sell, deliver, and refund/exchange goods in this rapidly evolving environment. Technology is just as crucial to manage internal business processes. Growing retailers who use entry-level accounting or legacy ERP systems must modernize customer-facing and internal business operations to remain competitive.
This playbook provides retailers, wholesalers, and direct-to-consumer manufacturers with an overview of omnichannel strategies and advice for connecting back-office applications to front-end technologies. In addition, it includes a self-assessment to determine your omnichannel journey and establish a technical infrastructure to remain competitively advantaged in today’s digital economy.
Omnichannel Success Factor #1
Superior Customer Experience
Thanks to technology combined with modern shopping models such as Amazon and the Apple Store, consumers have high expectations surrounding their buying experience. They expect simplified access to product and inventory visibility across all channels—online and off-line. They want personalized service and buying recommendations based on their purchasing or browsing history. They demand shopping convenience on their terms, including the ability to research online before buying in-store, buying online and picking up goods in-store, and returning goods either online or at any of the merchant’s brick-and-mortar retail sites. Additionally, these transactions must be transparent and frictionless for consumers as they navigate multiple engagement channels.
“It’s a challenge for small organizations like us to meet, but customers expect it. You need to have a tool like Acumatica that’s integrated with all the other tools you have in place to meet Amazon-level consumer expectations.”
Inventory Availability
Consumers routinely check item levels before venturing out to the store or placing an online order. They are much less likely to visit a retailer if in-store inventory is not available online. Shoppers want inventory data across all physical store locations and in warehouses where stock will be pulled to fulfill their order.
Modern business systems must track real-time inventory levels regardless of where the inventory is stocked: in-store on the shelf, in reserve, at kiosks, across all warehouses, and within vendor-managed inventory locations.
Stock allocations must be reserved for firm orders, and lot and serial number tracking is critical for traceability, and regulatory compliance. Obsolescence has to be minimized through policies such as “first-expired-first-out”.
Of course, accurate inventory records require that commerce sites communicate in real time with the back office and warehouse inventory counts, so bi-directional data flows are critical for accurate reporting and customer trust.
Delivery Date Estimates
Aside from inventory data, consumers expect to know how long they must wait for an out-of-stock product to be replenished and available. This concept is known as the “available-to-promise” date.
ERP systems must support robust inventory replenishment operations with integrated purchase order functionality and vendor management to efficiently source goods from the best providers given the current circumstances. Dashboards show visibility into vendor lead times with notifications regarding lead times, and connected CRM systems can track historic vendor performance to help make the best decisions.
The coordination between website storefront and back-end ERP platform is paramount to getting accurate, up-to-date information into the fingertips of demanding consumers. Native connectors that pass inventory data to the web storefront or POS device greatly simplify these tasks.
Product Information
Consumers regularly conduct online research when contemplating a purchase and require ubiquitous product information across channels. Going well beyond inventory availability, product data needs to include item descriptions, images, color/size/style options, specifications, pricing with calculated shipping and taxes, and peer user reviews.
Advanced, yet desired, product data may also include relevant item substitutions, bundled items typically bought together, plus cross-sell and up-sell opportunities for shoppers to consider.
Support for omnipresent product information comes from cloud-based business management systems accessible by anyone from any device over the web. Modern ERP systems such as Acumatica integrate directly with webstores and POS devices to deliver a satisfying customer experience. Comprehensive item information is stored in the ERP and sent to customer-facing applications in real-time without duplicating data entry. Updates are made in one place and populated seamlessly across sales channels.
Maintain detailed product descriptions with attached photos for each item. Leverage embedded document management features for accompanying attachments and online user guides. Wikis allow for customer interactions and user reviews. Customer-specific pricing, promotions, and discounting must be flexible. Shipping options and tax rates can be calculated and synchronized in real-time between the ERP system and web storefront.
ERP solutions need to support product variants effectively to manage every possible combination of dimensions, such as color, size, style.
All this has to be accomplished with a streamlined technology backbone. Reduce middleware in connecting back-end applications to front-end commerce sites and lower costs with direct, native connectors.
Customer Self-Service
Another source of customer satisfaction comes from the convenience of ad-hoc ordering and checkout. Self-service options keep the customer in control of their shopping journey and fosters an efficient buying process for retailers. One of the biggest reasons for shopping cart abandonment associated with online purchasing is the cumbersome checkout process. Consumers want to research and buy goods without creating a formal user account or needing excess clicks and forms to complete the sale.
In-store buying and checkout must be equally convenient. Long lines at bottlenecked cash registers in the front of the store detract from the shopping experience.
Top omnichannel brands have empowered consumers with expedited checkout online and self-checkout in-store. Mobile scanning devices have enabled scan-and-go techniques so buyers can checkout from anywhere at any retail outlet. Terminals provide the capability of ordering new and out-of-stock items directly from the store aisles (known as “endless aisle” shopping) for added convenience.
Merchants must deploy the right back-end ERP system to facilitate these consumer perks. One that supports multi-channel ordering, accurate real-time inventory levels, and dynamic tax and shipping quotations.
Buy, Receive, and Return Anywhere
Summing up the need for retailers to offer convenience is the ability for shoppers to buy anywhere, receive goods and services anywhere, and return merchandise anywhere.
To foster this reality, merchants must harmonize their business processes across channels. Whether in-store, online, or over the phone, brands need to adequately train staff on commerce scenarios and leverage automated process flows to be effective. Modern ERP systems have flexible process support to streamline business operations. Event triggers and workflows help proactively manage issues by exception, while complete visibility across all functions ensures tasks are aligned and transactions are properly recorded.
“We have a very close relationship with FedEx. We were able to work with our existing ship manager tool to pull in all the information to ship out any of our equipment. We didn’t have to rebuild it for Acumatica.”
Omnichannel Success Factor #2
Operational Excellence
Supporting multiple sales channels and providing a common shopping experience for customers regardless of their preferences for researching, buying, receiving, and returning goods requires a well-executed operational strategy. This includes training front-line staff to properly implement omnichannel programs. A leading analyst firm reports that 80% of retailers claim training in-store staff to pick, pack, and ship online orders was a challenge.
Order fulfillment and return processes must be embedded into the fabric of the work and streamlined across departments using automation and workflows to operate efficiently and profitably at scale. Metrics and key performance indicators (KPIs) should be established to measure how well the merchant is performing—with an eye on continuous improvement.
“Now, we don’t sell out of our best moving products and can create space for them by not restocking slower moving items, which helps drive better profits. We are also building additional automation into our accounting processes to drive more efficiency.”
Inventory Accuracy
Meeting customer satisfaction requirements is not an easy feat. As outlined above, shoppers want updated, accurate inventory information on the products they seek. The key questions for merchants to provide include, “how much stock is available, from where, and how can I receive it?”, as well as “how long must I wait for an out-of-stock item to become available, and what choices are there for how I get it?”
Native warehouse applications like Acumatica automate data capture for improved order and inventory accuracy, with mobility-enabled barcoding.
Cloud-based ERP software integrates inventory data with sales orders, vendor management, warehouse management, and accounting modules to orchestrate order-to-cash practices.
Innovative brands automate stock replenishment, cite forecasted delivery dates, and offer shipment options that best suits each consumer, improving satisfaction levels and retaining repeat customers.
Perfect Order Rates
Shoppers want to buy and receive goods based on convenience. They also want to receive the correct order, in the proper timeframe, delivered to the right place.
Perfect orders—those received “in time” to the correct location, with all goods included and undamaged—are a test of retailers’ ability to fulfill consumer purchases reliably. It’s a direct input into company profitability and customer satisfaction.
Acumatica’s technology and automation promote high perfect order rates through standard workflows and approvals, along with advanced support for directed pick, pack, and ship activities such as batch picking and wave picking. Dashboards and exception reporting allow employees to resolve obstacles immediately, before final shipment, raising consumer satisfaction levels and fostering brand loyalty.
Omnichannel Fulfillment
A successful omnichannel strategy centers on successful fulfillment principles. Offering convenience for shoppers to receive goods is not trivial. Fulfillment models include buying online and picking up in-store (BOPIS), shipping to the store, shipping from the store, and curbside delivery.
Sales orders must be captured in a centralized platform regardless of their origin – online, in-store, or via phone. Coded with the buyer’s delivery preference, merchants must have established processes for sourcing inventory, transferring inventory as necessary, pick and pack operations, and efficient methods for shipping or in-person delivery. Procedural considerations for various fulfillment models should include:
BOPIS and Ship-to-store – is it clear which online orders are intended to be picked up in-store? Is there sufficient stock in-store to meet order volume? If not, where does inventory reside and how long will it take to transfer it to the store location? Can customers see when an order will be ready for pick-up? Are suitable payment options available to online buyers?
Ship from store – is inventory visibility accurate and available across all sources of stock? Can a promised delivery date be sent to customers? Are store locations and shipping methods evaluated to allow for the most efficient mode of shipment? Are staff trained in pick/pack/ship tasks?
Curbside delivery – are real-time inventory levels visible to shoppers as well as retail staff? Can buyers receive updates on product availability and expected receipt of out-of-stock items? Are staff trained in pick/pack tasks? Are orders tracked through delivery?
Cloud-based ERP systems such as Acumatica connect with retail webstores can manage inventory visibility across warehouses, bin locations, shelf spaces, and in-transit deliveries. Available-to-Promise algorithms keep buyers informed of expected goods. Staff training should include detailed procedures and learning aids in a document management module.
Employee Training
A merchant’s employees must be well-versed in fulfilling omnichannel orders across online and in-store operations. A back-end technology platform can greatly support staff with learning and completing routine tasks.
With typically high turnover in retail staffing, training is always in demand. Order management, inventory control, picking and packing, back-order management, sales tax calculations, and customer communication are just a few areas that employees must master.
Modern ERP software such as Acumatica have flexible order management features so consumers can add, change, and delete items on their order. Automated workflows streamline order processing and offer next-step options as an order goes through fulfillment, shipping, or return stages.
Document management and wikis house worker instructions and communication forums to share knowledge and recall important details of their job function.
Moreover, the usability of an ERP platform will enhance the likelihood of staff engaging with the software to learn it and become proficient quickly.
Customer Communication
When changes to an order or delivery date occur, merchants must notify consumers promptly and with recommended actions. Validating order changes, change of address notifications, and returning goods also need to be confirmed with buyers.
It’s imperative for retailers to have a robust CRM system to facilitate customer communication. E-mail and SMS communications can be managed from CRM, while a history of prior purchases, complaints, and customer contacts provide a holistic view of each shopper to best serve their needs.
Acumatica CRM is natively integrated with its core ERP, which lets staff see updated inventory data, order tracking, item substitutions, customer-specific pricing and discounts, and customer profitability all in one central repository so as to be responsive and proactive in exceeding consumer demands.
Omnichannel Success Factor #3
Engaging Customers
Customer satisfaction and operational excellence involve order and fulfillment success, customer engagement aims to bring interaction with consumers to the fore. A contextualized mobile application, endless aisle capabilities, and promotions around loyalty programs, gift cards, and order personalization are examples of engagement.
“We still take 30 percent of orders on the phone, and we need to interact with customers quickly. We need to look them up, create new customers, add items, take credit cards, and we’ve scripted a lot of that because the customer doesn’t want to wait while we process their credit card or enter data.”
Mobile Application
It is common for shoppers to use their smartphones to search for available coupons while inside a store. Mobile applications that can automatically send coupons to consumers proactively will engage customers where they are – and increase sales simultaneously.
Likewise, price-matching a competitor’s advertised cost has the benefit of keeping consumers aligned to your brand with unrefusable offers. Performing price comparisons online and through point-of-sale (POS) devices empowers buyers to feel they are receiving extraordinary service on behalf of the retailer.
Some innovative brands offer a virtual reality experience for shoppers who are buying apparel or home goods, so they can visualize how products will look on their person or in their living room before actual purchase.
To deploy these features, look for cloud business software that has a robust mobile application and strong web-based APIs, which easily integrates with online shopping sites, coupon aggregators, virtual reality tools, and other forms of enhancing consumers’ buying experiences. Leverage customer-specific pricing to offer special discounts to the most profitable customer groups.
Endless Aisle Options
Consumers who come into a physical store and see their desired item is out-of-stock are inevitably disappointed. Merchants can address this effectively with an ‘endless aisle’ kiosk. It allows shoppers to search and order products from the retailer’s entire portfolio, whether or not items are sold in-store or not. It also provides information on expected stock deliveries and users can reserve such stock for a future pick-up in-store or home shipment.
ERP backbones must support an online shopping experience at endless aisle kiosks, featuring inventory visibility, mobile order management, and direct webstore interactions including real-time tax and shipping options.
Promotions and Personalization
Promotional discounts, loyalty programs, gift cards, and order-related services like engraving and custom messages also engage customers with a brand. Plan to reward engaged customers with preferred pricing and loyalty benefits. Know how shoppers affect your bottom line with role-based dashboards, flexible financial reports, and engagement scores from CRM transactions into the ERP system of record.
Assessment
Where Are You in Your Omnichannel Journey?
Every retailer is different, and so too is their omnichannel journey. Merchants on entry-level accounting systems have few tools to connect systems. Established retailers on legacy ERP systems also have difficulty connecting to today’s technologies and web-based marketplaces. Your software needs will vary depending on your industry, the types of products you sell, and your customers’ preferences. Complete the self-assessment survey to determine where you are today and what next steps you should take.
“When we switched to Acumatica, it really created a seamless experience for our consumer because our data accuracy, our inventory, and the way we communicated with our customers was in one spot and created a single source of truth. Our department could spend less time monitoring the backend and more time creating marketing content to grow the brand.”
Current State Survey
For retailers and wholesalers who sell via multiple sales channels (online, in-store, phone, kiosk, etc.), complete the survey below. Count your checkmarks and enter the totals at the bottom.
Current State Assessment Results
Add up all the YES answers. Then, use the table below to see where you stand today.
Discover Why Retail Firms Rely on Acumatica for Digital Transformation
Many of the standard technical features required to support omnichannel programs cut across the most popular sales models (B2C, B2B, and D2C). However, a quick notation on the differences in how customers buy may be helpful.
B2C – end-users typically shop on retailers’ websites, marketplaces like Amazon, in-store, over the phone, and within store kiosks. B2C merchants must have secure systems to process credit cards, online payments such as PayPal, POS devices, cash transactions, and gift cards.
B2B – commercial buyers who purchase on behalf of an organization usually shop online, but also through vendors’ showrooms, sales representatives, or via direct store delivery. Sellers need credit card, POS, and mobile payment devices to process orders, as well as offering billing and invoicing support, buying on account, and handling credit and collections tasks.
D2C – Direct to consumer customers use a combination of shopping avenues, including online websites, aggregated marketplaces, in-store showrooms, brick and mortar stores, via catalogs, over the phone, and through sales representatives. Manufacturers and similar D2C sellers must have capabilities to support cash and credit transactions, gift cards, with some invoicing and collections processes available, too.
The technologies you implement to power your omnichannel engine depends on how far you are in your digital transformation journey. Sellers who are just starting will have few automated processes using basic technologies. Merchants further along will have more automated processes using progressively more advanced technologies. The first step is to understand where you currently are before developing a digital transformation plan. Use the diagram below to chart your journey.
Strategy
Strategies for Improved Compliance
It is challenging to modernize omnichannel operations without a comprehensive plan. You have systems in place today but are they the right ones to take you to the next level? You have implemented features of your back-end system, but are they set up correctly, and are there other features you could use? Set a solid foundation by researching options, prioritizing activities, and developing a detailed plan.
Step 1: Foundation
Modernizing omnichannel operations is easier when you build on a modern ERP system. It will be much more difficult and costly to modernize if you use basic accounting or older back-office systems with few integration options. Many merchants use a patchwork of technologies. Maintaining integrations between too many applications is costly and inefficient.
- Review Current ERP Software Features: Does your current business management system provide a modern, cloud-native platform with an open architecture to connect to current eCommerce, POS, CRM, plus tax and shipping applications? Are there modules available that you can purchase to improve fulfillment operations? Are there workflow features you could implement to further automate connected business processes?
- Upgrade or Replace ERP Systems: Consider upgrading or replacing your current back-office business software as part of any modernization project. You may be surprised to find that new versions of the software provide features to improve operations. Conversely, you may discover that there are better options available for retailers and wholesalers in your industry.
Step 2: Research
It is critical to research and evaluate connected automation technologies so you can prioritize modernization initiatives. First, review the detailed omnichannel assessment section to see which features your current applications provide and where there are functional gaps for future needs. Then, conduct a thorough business process review to identify processes that can be improved through digital automation.
- Research Existing Capabilities: Document omnichannel capabilities available in your current ERP system. How are these capabilities used in the system today? Can the system flex to support future requirements in the short- and mid-term? Can it be adapted, or should the system be replaced?
- Identify Modernization Initiatives: Start small and work on high-priority modernization activities first. Review the omnichannel assessment to identify gaps. You can then work on filling gaps in a methodical fashion.
- Review Potential Technologies: Contact your ERP or IT partner to learn more about available modules, features, or third-party applications to improve operations. Do these applications and features fill most of your current and future gaps? Are they easily connected? What are the costs?
Step 3: Prioritize
Review the list of functional gaps from the list you’ve gathered. Rank each one based on cost and potential benefit. It is essential to start small with a few high-priority activities. Look for ways to get more out of your current omnichannel program first. Be mindful of cost. It is easier and less expensive to implement inventory visibility on your storefronts than to begin with available-to-promise capabilities. Further, many advanced features can push you into costly and unnecessarily complex solutions.
- Improve Existing Fulfillment Processes: Review your modernization projects. Often, you can find ways to improve processes with simple workflow changes or configurations. You may also discover innate benefits for customers related to operational improvements.
- Implement New Omnichannel Processes: Creating an established omnichannel program takes time. There’s no need to do everything at once. Instead, consider activities that can be implemented effectively using existing functionality or where you can leverage previous investments in technologies for adjacent innovations.
Step 4: Develop a Plan
Develop a plan that defines the objectives, supporting technologies, a timeline and a process for conducting the implementation from start to finish.
- Goals & Desired Outcomes: It is vital to outline the expected results clearly. Document the current state beforehand so you have a benchmark to use as a measure of your success.
- Omnichannel Technologies: Document which systems will be used, dependencies, connection points with other systems, known limitations, and provide contacts for assistance.
- Timeline: You may not have a start date for the project, but you can develop the detailed phases and timeframes to complete major steps in the process.
- Contingency Plans: Define contingency plans in case you run into technical issues or other conflicts that prevent the completion of the project.
“Acumatica’s integration with our websites and the ability to better track customers was great for us. Reporting is very robust and the ability to create reports specific to us is huge. Now that we have a CRM, we are creating an outbound sales division and doing account management, which was hard to do before because we had no central resource for data.”
Execution
Creating a Modern Omnichannel Experience
When it is time to execute omnichannel improvement projects once you have defined your plan, remember that you do not have to automate everything simultaneously. It is easier to start with simpler improvements such as workflow process enhancements or connections to existing in-house applications. Execution covers four phases: preparation, go-live, review, and continuous improvement. Each phase is essential for the successful roll-out of new technology strategies.
“[With Acumatica] I am spending a lot less time helping people with data entry because the business is now automated, and that’s a huge component of our growth.”
Phase One: Preparation
The time it takes to prepare will depend on the project’s complexity, including the applications used and the scope of changes to business systems and processes. Preparation should start well in advance of your desired go-live date. It should include a review of the project plan with project owners, internal staff, users, technology providers, and consultants.
- Plan Review: Review the project plan with the team. Set the start date for the project and assign dates to each step in the project. Consider the contingency plan to ensure there is a process in case something goes wrong.
- Team Preparation: Notify participants of timelines and their roles and responsibilities. Discuss expected results and how to measure progress and return on investment (ROI). A conference room pilot (CRP) improves success rates dramatically.
Phase Two: Go-Live Day
Successful go-lives are well-organized. Identify one person as the project lead. The project lead orchestrates each step in the project.
- Coordination: The project lead orchestrates the implementation, delegates tasks to team members, and guides the entire project. They make decisions based on feedback and chart progression throughout the process.
- Documentation: The actual go-live should be as close as possible to the planned implementation. Last-minute changes inevitably happen along the way. Document changes with details for future review.
Phase Three: Review
It will take time for things to settle into place after you complete the project. Therefore, give users time to adapt to new processes while enabling time to collect all necessary data points.
- Go-Live Notes: Review the go-live plan for last-minute changes to the project scope. Identify any follow-up activities to fine-tune the new process.
- User Feedback: Talk to users about new processes and technologies. What do they like? What do they dislike? Do they feel they are beneficial? You will find that users have some of the best ideas if you take the time to ask them.
- Analytics: Review the early results. Were you able to meet or exceed your goals? If not, why? What can you do to improve the process? Make sure to continue monitoring results long after each new process improvement project.
“More than a time-saving tool, Acumatica is a really clear way to let customers know what’s going on, which we didn’t have before. No more being shuffled around to different members of our team who may or may not have the information needed. That’s been a huge value add in efficiency. As we integrate more of our systems into Acumatica, we’ll only continue to see more efficiencies and we’ll be able to serve our customers even better going forward.”
Phase Four: Continuous Improvement
Application upgrades and other technical issues impact the original project. New versions of the software or hardware can provide increased value.
- Maintain Technologies: Stay current on the latest updates of your critical business software and connected systems. Set up a sandbox for testing upgrades and new or revised process flows. Review product road maps and understand technology lifecycles.
- Improve Processes: Look for ways to use existing features and technologies to improve adjacent processes and automation further. Go back to prior project initiatives and implement more advanced features or modify configurations to get added value and more streamlined processes.
- Explore New Opportunities: Look for new ways to extend your successful omnichannel projects to related transactions or business processes. For example, take on more complex projects and consider advanced process integrations down the road.
Transform Omnichannel Operations with Acumatica, the Cloud ERP
A well-coordinated omnichannel sales strategy is essential for retailers, wholesale distributors, and manufacturers who sell direct to end-users to thrive in today’s digital economy. Unfortunately, entry-level business applications and legacy ERP software force many merchants to limit their ability to adequately fulfill orders and delight customers.
Brands need to understand how modern technologies can positively transform their businesses through automation to streamline operations, reach consumers where they are, bolster sales, cut costs, and improve customer satisfaction and loyalty.
A disciplined strategy is critical to the success of a brand’s digital transformation. The strategy establishes a solid foundation, provides research, and defines priorities for the modernization plan. In addition, a four-phased execution approach ensures system and process implementation success.
Acumatica Retail Edition is designed for omnichannel sales organizations. Acumatica provides native connectivity to commerce sites, marketplaces, in-store point-of-sale devices, and external applications for a singularly transparent view of activities across the company and with customers. Acumatica provides the best business and industry management solution for transforming your business to thrive in today’s fiercely competitive retail market.
And tomorrow’s.
“We’re implementing actions and a forum on our site, which we couldn’t do before. We wanted it for years and years, and there is a long list of marketing things we can do now that we couldn’t before.”
