Retail Back Office Solutions. 2021 Guide. Part 3
“It’s needed to have one foot rooted at the heritage of the past to make sure we understand where we came from, and one confident step forward in terms of driving innovation forward.”
James Curleigh, Levi’s Brand President
A retailer's self-awareness is what helps it to make customers and employees joyful. It's hard to satisfy the first ones' needs without the harmonious work of the last ones. Therefore, both groups of people should be inspired by interaction with the company. Earlier XME considered what is a retail back office and its software as well as why should sellers create a robust framework for their business activities? Today, the focus is on the question "How?"
How a novice retailer can build a back office in the right way and what should an experienced seller take into account. It's time to expand horizons.
How to Build a Retail Back Office Digital System In The Right Way?
If the seller is starting its business path, it must use modern technologies to support the back office. In a competitive environment, this is a mandatory factor of operation. So, any budding retailer must adhere to 5 basic rules to get the internal system working properly from the start.
Rule #1. Consider business strategy, goals, and possibilities first
Following the US Retail National Federation, over 65% of sellers want to invest in new products. However, it's complicated to determine what a company needs: a multifunctional digital platform or cross-platform solutions, without researching the real state of software and its operation. So, strategy and goals analysis allows an understanding of where to start and what to focus on. For instance, a desire to use an omnichannel approach should be supported by migration from monolith to microservices.
An opportunity assessment, in turn, helps to determine how much a business can and will spend on its digitalization in the early stage of development.
Rule #2. Don’t follow competitors
This area is one of the few where a decision has to be made based on the particular business features, regardless of other approaches used by competitors.
For instance, some retailers, like Kroger or Walmart, use ready-made digital back-office solutions for financial, logistics, and marketing systems. Others prefer development from scratch. Each seller chooses a certain way, focusing solely on its needs for real-time logistic management, resource savings, information protection, etc.
Rule #3. Stay tuned for new products
There are many universal solutions, helping retailers to grow. Have you heard of 5G, Cloud, IoT, and other technologies? Yes, a business must always consider new possibilities. And eliminate them only by modern digital developments. It’s unreachable without the correctly chosen architecture. Monolithic solutions can work efficiently, but they are significantly inferior in flexibility to microservices-based developments. We all need a tool for Minimum Valuable Products (MVP) fast-coding to validate new ideas fast and exceed our customer's needs and expectations.
Rule #4. Don’t write off staff
The software effectiveness directly depends on how often employees use it. How much time it’s needed to onboard new employees and get an up-to-date report for the right decisions? The answer to this question is key in times of uncertainty and changes. Therefore, it is a must to create a software ecosystem with simple solutions with a convenient interface to decrease the time needed to be spent. In the future, it will save time on employee training and speed-up the onboarding process.
Rule #5. Customer Still First
Implementing new back-office solutions, the retailer should think about how it will affect the customers. It's principal to improve a loyalty system and strive to meet demand at the moment of arising. Another part of a positive customer experience is a quick home delivery or always getting favorite goods. Therefore, the digitalization of the logistics sector is equally important. Also, this business must be adaptable to new market conditions, demand changes, etc. The client becomes a regular, understanding that the retailer always gives him all needed. His Life Time Value (LTV) will grow, retail will become more successful.
Well-Built Back Office System: What Does It Mean For Retailers?
As seen, back-office operation affects everything from the sales floor to the customer impression after the purchase. Thus, well-performing internal systems are not enough. Their interaction should be seamless and as efficient as possible. Only the correct process design can allow it. Let's look at why retail should pay attention to the last one.
It eliminates the necessity of frequent organizational changes. They are often time and resource-consuming.
This approach improves the back office functioning, turning it into a single integrated mechanism. It allows making smart investing, faster goods receiving/delivering, creating unique solutions to satisfy clients.
The back office components interaction makes the company flexible and forms the basis for effective digital solutions implementation.
Thus, a highly developed internal office is capable of influencing all retail areas. But transformation is unachievable without appropriate software.
Back Office Software in Retail Industry: Trends
Trend 1. Development from scratch
The retail industry is so dynamic. Ready-made solutions from SAP, Microsoft, Oracle are not always suitable, since they assume a piece of dependence. Users cannot change the components themselves. They have to wait for a new software version. To ensure adaptability, sellers are increasingly hiring a dedicated IT-team or contractor company that develops and supports the software for retail business.
Trend 2. Moving to the microservice architecture
This way gives retail the needed flexibility because of microservices features. Some solutions, developed on such an architecture basis, can also well integrate with the monolithic part of the software, helping it to work efficiently.
Trend 3. Usage of Business Management and Business Rules Management Systems
Business Management System (BMS) is a set of programs that helps to manage internal processes in a constant changeable environment. Business Rules Management System (BRMS) is a database used to support and control company business rules performance.
These systems don't replace the basic back-office software. They make it effective. For example, BMS can change attributes of any procedure during its execution and then provides its updated version.
Both BMS and BRMS are quite complicated for implementation since all the processes need to be well-designed first. But the primary advantage is that such systems are able to change system components without IT-specialists participation.
Trend 4. Omnichannel approach
Omnichannel is not a buzzword. It is a systematic approach to single customer experience across all possible touchpoints with your company with merged sales and marketing activities. It counts transition between channels. And it is hard to determine how to build an efficient omnichannel management system. It requires retail ERP software changes, implementation of flexible digital solutions like order, inventory management systems, and so on. Thus, omnichannel gradually initiate the full digital transformation of the retail back office and all business as a whole.
Today retail has gone far from its beginnings and becomes an IT- business. It needs flexibility and adaptability to function effectively. Thus, all changes, which concern the back office, should be oriented towards this opportunity. Such factors as satisfying demand and increasing the goods turnover are also mattered.