Once upon a time, automation technologies may have been the stuff of science fiction. But in today’s business landscape, they are now very much part of the mainstream. Businesses of various industries now rely on automation to predetermine relevant business criteria and break up larger processes into simpler, more efficient ones, thus streamlining the work that needs to be done and minimizing the cost of human limitations.
Automation is now a staple for businesses that house populous workforces and that deal with large volumes of complex data, like those that operate in the manufacturing and pharmaceutical sectors. But as mounting evidence now demonstrates, automation can be a boon for retail businesses as well. A retail company that invests in an enterprise resource planning (ERP) solution with extensive automation capabilities can significantly improve its business functions and integrate more smoothly into a digitally-driven future.
What challenges can a retail business overcome through its use of automation technologies, which retail business processes lend themselves most easily to automation, and how can a new ERP system help a retail company roll out its business automation plans? This article will facilitate a deep dive into the issue of automation for retail businesses, as well as set clients’ expectations for a digital transformation with an ERP vendor like ANSI Information Systems.
Modern-Day Challenges in the Retail Sector
Retail is one of the fastest-growing industries in the world, and it is a particularly exciting time to be part of the Philippine retail sector. In the latter half of 2022, Department of Trade and Industry (DTI) Secretary Alfredo Pascual reported that the retail sector is experiencing a comeback after a slump from the COVID-19 pandemic.
In the first quarter of 2022 alone, the country’s retail industry boasted a gross value of more than PHP 600 billion. In his remarks to the Philippine Retailers Association during their General Membership Meeting for Q2 of 2022, Pascual added that retailers do valuable work in connecting consumers to manufacturers and enabling the exchange of high-quality products at fair prices.
But working in retail is not without obstacles. Some of the most pressing challenges that Filipino retailers have to meet are the following:
Though retail is a profitable industry to enter, many retail brands are vying to win the same markets. If a brand can’t resonate with its chosen market, it can quickly lose large amounts of money and fall into obscurity.
As a retailer, you must be able to take on the challenge of building a distinctive business brand anchored on positive qualities like efficiency, attention to detail, a wide range of products, and a willingness to try innovative new methods. Those qualities will set you apart from your competitors and increase your chances of becoming your customers’ number one choice for retail experiences.
High Customer Expectations
Speaking of customers, many of the ones you engage with will be hard to please. This generation of retail customers has grown up on fast, seamless, and convenient retail experiences, and they expect more of the same moving forward. Only by meeting your customers’ standards will you succeed in the tough world of retail.
The Need to Manage Huge Volumes of Inventory
Retail businesses with expansive inventories have a significant advantage when it comes to attracting customers. This makes it all the more reason for a customer to see a retail establishment as a one-stop shop for all their needs, the higher the business’s margins can be.
Unfortunately, large inventories are often more challenging to maintain. Inefficient inventory management can also lead to huge financial losses that are hard for a retail company to recover from. Retailers must be able to strike a balance between growing their inventory and mitigating potential losses from damage, spoilage, theft, or neglect.
The Need to Be Efficient with a Large Labor Pool
Most retail companies also have a sizable number of employees to manage, which means that oversight and guidance are more difficult than they would be for smaller and more lightweight business types. Not being strategic about how to manage labor resources can result in lower productivity for the retail business, as well as higher overhead costs for overtime and human error.
A retailer that wants to increase its business performance should make it easy for staff to work efficiently, both with each other and with the systems the company relies on. Successful management of labor resources is one thing that truly contributes to a retail business’s longevity, which is why it is something that retailers should aspire for.
The Need to Optimize Sales Forecasting and Financial Reporting
Given how much of it depends on being up to date with numbers, retail is an industry that would benefit from being more data-driven. But some retailers are either unaware of the top-of-the-line data solutions that are currently available to them or are fearful of investing in new technologies.
All the same, if a retailer wants to excel in their industry, one thing that would give them an edge is mastery over their financial data. A retail company that has a handle on its sales and the accuracy of its financial reports is poised for success indeed.
How Your Retail Business Can Improve as a Result of Widespread Business Process Automation
Business process automation is not a cure-all for the various challenges retailers face, but it can definitely contribute towards meeting them. If you choose to kick off a digital transformation of your retail business that’s anchored on widespread adoption of business process automation, you can expect to benefit in the following ways:
You’ll Be Able to Distinguish Your Brand from Others
Automating your retail processes will require you to do a lot of work behind the scenes, but the effects won’t be invisible to your customers. If automation can help your retail business operate like a well-oiled machine, your customers will be able to tell you apart from your competitors for all the right reasons. This, of course, will lead them to choose your business over other retailers who operate in the same or similar niches.
You Can Cultivate a More Loyal and Enthusiastic Market for Your Products
Business process automation can also be used to improve your customers’ retail shopping experiences in both your physical and online stores. If they’re happy to shop with you, they’re less likely to abandon their carts and more likely to return to your storefront or recommend it to others.
You Can Drive Up Productivity among Your Staff
There’s a common misconception that automation will replace the work done by real people, but it’s the opposite that’s actually true. Automation can actually drive up productivity among human staff by allowing them to work smarter, thus freeing up them up to concentrate on more complex tasks. Automating your retail processes may be one of the best things you’ll do to empower your staff and cultivate synergy within the team.
You Can Decrease Your Overhead Costs
You may already know how much money you stand to lose from ballooning overhead expenses, like those of your utility bills when you and your staff work overtime. But automation can make you more efficiently with resources like labor, energy, and data consumption, and thus reduce the amount of money you’ll have to spend on these every month.
You Can Achieve Better Foresight Over Your Retail Business’s Financial Future
One of the best arguments for automating your retail processes via an ERP solution is the ability to access real-time insight on your sales performance and your opportunities for increasing profitability. In the hypercompetitive industry of retail, you’ll want the numbers on your side. Automated data analytics and financial reporting features will help you discern whether you’re doing well or whether you need to adjust your sales strategies. That foresight could spell the difference between a lucrative year and an unprofitable year for your retail business.
Retail Business Functions That You Can Enhance Through Automation
To help you visualize what’s possible when you roll out widespread business automation for your retail company, here are six examples of retail processes that you can automate:
Order Processing and Invoicing
It’s definitely a good idea to automate your company’s order processing and invoicing through an ERP solution, especially if you handle a lot of online orders and maintain a lot of supplier relationships. Automated features for order processing, invoicing, and billing can minimize costly errors that usually occur as a result of delayed or inaccurate payments. Having a faster, more accurate, and more efficient system will keep you on the good side of both your customers and your suppliers.
You can also use a solution with automated inventory management features to count your available stocks in real time, as well as update you and your staff when certain products are running low in stock. These features will save you the trouble of finding out belatedly that products are gone from the shelves, and they will allow you to restock in a timely manner so that you keep your customers satisfied.
Human Resources and Payroll Management
All-inclusive ERP retail solutions can also automate human resources (HR) and payroll management functions. Your company’s HR team won’t have as hard a time managing rote tasks, like clocking in employee hours, finalizing figures for employee pay slips, and quickly reconciling issues that stem from overtime or undertime.
Customer Relationship Management
There are several customer relationship management (CRM) functions that you can automate with new ERP software. For one, your solution can help you and your employees manage a rewards points system for your most loyal retail customers. For another, it can automatically gather and analyze customer insight from past sales, thus allowing you to reach out to customers, make personalized recommendations, and motivate buyers to transact with you again.
Many have the impression that customer service functions are best handled by humans, but some of these can be handled via automation. For example, you can leave customer feedback forms on your retail business’s ecommerce website and then use an automated system to pre-sort and analyze the data. That method can save your customer care team a lot of time and effort in compartmentalizing your customers’ biggest concerns and allow your staff to resolve conflict with greater speed and accuracy.
Lastly, an ERP retail solution with automated analytics and financial reporting features can quickly collect, analyze, and present data in a clear and easily digestible format. You’ll be able to pare down huge amounts of data and arrive at the most important facts and figures, and you’ll also be able to measure your retail company’s performance according to particular key performance indicators, like revenue targets per quarter. There won’t be any ambiguity about whether your business is meeting its goals within its ideal timeframe, and you’ll have more time to make business-critical adjustments.
Using ERP to Automate Your Retail Business Functions
It may be possible to automate some of the functions listed above in a piecemeal manner, such as purchasing separate programs or applications for every retail process you want automated. But the easiest, most streamlined, and most cost-efficient way to automate several key processes at the same time is to purchase an all-in-one ERP solution. Here’s a case for rolling out widespread automation in your retail business using an ERP:
An ERP Can Help You Visualize Your Plans for Business Automation
The downside of the piecemeal approach to automating your retail processes is that you might lose sight of your bigger-picture goals towards improving your business. An ERP will make it easier to observe structure in your business automation plans and see to it that each automation milestone is in line with the company’s overarching vision for its future.
An ERP Can Centralize Your Business Data for Automation and Other Purposes
Another plus of using an ERP to kick off your automation plans for your retail business is that the ERP will afford you a centralized platform for collecting, sorting, analyzing, and acting upon your business data. Each initiative to automate a business function will be anchored on the same up-to-date data, and modernizing one process won’t hamper other processes.
Having a centralized database for all your retail business functions via an ERP will be good for other things aside from your automation efforts. Cloud ERPs like SAP Business One will also make it easier to back up business data and recover it from the cloud, which will serve your business well in case of business interruption brought about by a natural or man-made disaster.
An ERP Can Help You Identify Silos within Your Business Workflow
You may not notice certain obstacles in your retail business workflow until an ERP solution affords you a 360-degree view of it. In the process of formulating a plan to automate your retail functions, you may be able to see which elements of your workflow clash with each other or cause unnecessary delays in your operations.
In that vein, an ERP will do more than help you automate disparate processes. You’ll also be able to adjust your workflow so that each of these processes is in perfect sync, which is the key to improving your business as a whole.
Notes on Formulating a Roadmap for ERP Implementation
To get the most out of your transition to an ERP, and to ease your company into managing a business workflow that’s more reliant on automation, remember to do the following:
ANSI Information Systems: Helping Filipino Businesses Modernize Through ERP Implementation ANSI Information Systems is a top player in the business software solutions industry, and our legacy spans more than thirty years of helping Filipino retail businesses modernize their operations. For a concrete plan on how to strengthen your business through the use of an ERP solution with automation capabilities, be sure to get in touch with the ANSI team. Let’s work towards enacting positive change in your retail company through technology and making you the number one retailer for your target market.