Do you know where your retail organization is heading? Most will answer “yes” and rely on intuition or gut instinct. The issue with such an approach, however, is that it’s notoriously unreliable.
Retail enterprise resource planning (ERP) systems collate your retail business’ most important data into a single tool. Acting as a central dashboard that compiles sales, inventory, finance, human resources, procurement, and customer service data, the ERP makes data accessible to stakeholders.
A recent report found that the vast majority of organizations (94%) say timely innovation is critical, and that retail ERP software helps. This makes sense: retail ERP integrations surface indispensable data that you can use to make decisions most likely to make a positive impact.
Unsure where to start on your search for new retail ERP solutions? This guide shares the components to look for when streamlining retail operations, alongside six vendors to consider.
Key components of retail ERP systems
Inventory management
Inventory management is a logistical hassle that only gets more difficult as your retail business grows. Both understocking and overstocking can damage revenue, either by turning customers away or wasting too much cash on holding inventory and storage costs.
The inventory management component of a retail ERP solution tracks real-time stock levels across different locations, including multiple retail stores, shipping warehouses, and third-party logistics partner storage facilities. It helps you optimize stock replenishment, prevent stockouts, and manage excess inventory.
Granted, an inventory management system (IMS) houses data regarding your inventory, but you can’t keep this information siloed. Merging ERP inventory data with finance and procurement systems, for example, allows you to automate tasks such as replenishing inventory or creating purchase orders when the recorded quantity dips below a predetermined threshold in the IMS.
Order management
Order fulfillment has a lot of moving parts. You need to receive a customer’s order through your ecommerce or POS platform, confirm that inventory is available, and generate a packing slip for your fulfillment team to follow. These items then get packed in the appropriate shipping boxes, complete with a shipping label, and handed off to your couriers.
Order management is a crucial component of any retail ERP because it can automate repetitive tasks in the fulfillment process. When you offer ship-to-home for in-store orders, for example, the ERP can decide which shipping warehouse to divert the order to, based on inventory levels and courier shipping rates. This improves order fulfillment accuracy and speed while also reducing fulfillment costs.
Customer relationship management (CRM)
An ERP with CRM integration consolidates customer data from various channels—whether in-store, online, or through third-party marketplaces—into a single, unified customer profile. All interactions, transactions, and preferences are tracked in one place, giving you a single point of reference when using customer data to personalize the retail experience.
Retail ERP software can segment customers based on past purchases and automatically send personalized product recommendations, for example. A standalone CRM might lack access to real-time inventory or sales data to do this effectively. The last thing you want to do is recommend a product that’s stored in a warehouse on the other side of the country and pay $20 in shipping costs to send it to your customer.
Point of sale (POS) integration
A point of sale (POS) system isn’t just a device for processing in-store transactions. You’re also likely collecting customer data using the system, and retrieving inventory levels and product information.
Integrating your POS with a retail ERP system means you can cross-reference POS data with other reports. For example, you could monitor the impact of your loyalty program by compiling data from each POS configuration in multiple retail stores alongside your ecommerce site.
Customers would then receive the same points allowance, discounts, and offers no matter where the transaction occurs, and you would have an easy way to monitor the success of your loyalty program at scale.
Supply chain operations
It’s not uncommon for inventory to go AWOL or get damaged throughout the logistics process. A retail ERP system provides complete visibility into every stage of the supply chain, from procurement and warehousing to distribution and delivery.
Real-time access to this data lets you monitor supplier performance and maintain relationships with valued vendors. You can evaluate suppliers based on delivery times, product quality, and order accuracy, and flag those underperforming to negotiate better terms or avoid issues affecting product availability.
Financial management tools
Retail ERP systems combine financial data, including sales, procurement, payroll, and inventory costs, to ensure that your financial data is all in one place, no matter where you process payments (e.g., POS terminal, online sales, or vendor payments).
The obvious benefit of this is reporting: tax season becomes easier when you can easily see and prove how much revenue your business earned.
This component of a retail ERP can also give you more control over your cash flow. You can compare revenue against upcoming expenses, like vendor purchase orders or payroll, to ensure you have enough capital to pay for operating costs.
Human resources management
Integrating your HR software with a retail ERP allows you to automatically calculate wages, bonuses, and deductions based on employee attendance, hours worked, and sales processed.
If you’re incentivizing retail employees with a 2% commission on every sale they make in-store, for example, the ERP can pull data from your POS systems to track sales by user. The ERP can use salary data from the HR platform to calculate and run payroll, without you having to do the calculations manually (and risk getting it wrong).
Retail ERPs can also suggest staffing schedules based on peak seasons, sales patterns, and employees’ contracted hours. The last thing you want is to waste limited resources for part-timers or pay excessive labor costs that outweigh the revenue you’ll make on slow days.
Best ERP systems for retail
Microsoft Dynamics 365 Business Central
Microsoft Dynamics 365 Business Central is an ERP with built-in artificial intelligence capabilities. It’s compatible with Microsoft Copilot, which makes it easy to surface important data. There’s no need to wade through navigation menus and reports—Copilot can retrieve the data for you.
Best features include:
- Support for multiple sales channels
- Bidirectional synchronization of inventory, customer, and product data
- Integrations with customer experience, service, supply chain, and finance tools
- Partner directory to get assistance with ERP integrations and implementation
Oracle NetSuite OneWorld
Oracle NetSuite OneWorld is a cloud-based global ERP system that’s ideal for international businesses. It supports over 190 currencies and 24 languages, letting you manage subsidiaries, legal entities, and tax regulations internationally.
Best features include:
- Real-time reporting on regional and global levels
- Support for 190 currencies, exchange rates, and international payment options
- Consolidated financial statements
- Audit and compliance reporting
Brightpearl
Brightpearl is an enterprise ERP system purpose built for multichannel retailers. It assists with inventory planning, shipping and fulfillment, warehouse management, and retail accounting, and boasts a 97% success rate for ERP implementation.
Best features include:
- Multi-warehouse order fulfillment with dropshipping rules
- An automation engine to handle repetitive or time-consuming tasks
- “Plug and play” integrations with ecommerce platforms, 3PLs, and accounting software
- 24/7 customer support
Acumatica Cloud ERP
Acumatica offers cloud-based ERP software designed for mid-market retailers. Its no-code and low-code solution allows you to configure the system without custom coding integration with your order management software, ecommerce platform, warehouse management system, or POS.
Best features include:
- Bidirectional connections between the ERP and integrated systems
- User-friendly interface and customizable reports
- Accounting projections to manage budgets
- Support for multiple entities as your retail organization grows
SAP Business One Professional
SAP Business One Professional’s ERP system is geared towards small businesses. It’s worth considering if you operate a small number of retail stores and are looking for a beginner-friendly retail ERP system.
Best features include:
- On-premise or cloud-based options
- Business intelligence capabilities
- Mobile app to view retail data on the go
- Integrations with accounting, purchasing, inventory, sales, and CRM tools
- Free training to guide employees on how to use the retail ERP
Epicor Prophet 21 ERP
Epicor’s ERP system is specifically built for wholesale distributors. Add it to your shortlist if you’re managing multiple shipping warehouses and need software that can pull data from inventory, warehouse, and order fulfillment systems into a centralized dashboard.
Best features include:
- Support for DTC and B2B sales
- Real-time inventory insights across multiple storage locations
- Integrations with warehouse, inventory, and order management systems
- Advanced financial reporting capabilities
How to choose an ERP provider
Choosing a new ERP system is a big decision. It’s one you don’t want to make twice—migrating can be costly and time-consuming—so it’s important to take the time to evaluate what your retail business needs before committing to a contract. Pick a platform that integrates with your tech stack seamlessly.
If you’re unsure of which ERP vendor to choose, here’s a quick checklist to help you decide:
- Get a demo. Most vendors offer free demonstrations that let you get a feel for the interface and whether it’s easy to use. This is significant: 67% of organizations cited ease of use as one of the top things they value in a commerce platform, likely because clunky or technical software can deter team members from using it.
- Check references. Do other retailers use the ERP system you’re evaluating? How do they find it? Ask the vendor for references, but be aware that these may be biased. Software review sites like G2 and Capterra can surface third-party reviews from retailers using the retail ERP. Pay attention to the features that are missing and whether there are any complaints.
- Get the real price. Most ERP systems don’t offer straightforward monthly subscriptions. Inquire about additional costs like implementation support, customization fees, or annual maintenance charges to choose a retail ERP that’s within budget.
- Measure ERP ROI. Once you’ve got the real price to implement a new ERP, estimate how much revenue you’ll generate from it. Selling the investment to stakeholders is easier if you can confidently say it’ll drive more money than you’re spending.
- Determine vendor viability. Before signing on the dotted line, evaluate the business’s stability and reliability. Vendors with whispers of financial problems or regular negative reviews aren’t likely to be in it for the long haul, leaving you at risk of migrating to another retail ERP platform later.
Choose the right ERP for your retail business
Shopify’s Global ERP Program can connect your commerce platform to leading retail ERP vendors like Microsoft Dynamics 365 Business Central, NetSuite, and Brightpearl.
Pool your inventory, sales, and customer data collected from any Shopify sales channel (including POS, ecommerce sites, and marketplace profiles) with the ERP to get a big picture view of your retail performance.
ERP in the retail industry FAQ
What is ERP in retail?
A retail ERP is a system that pulls data from various sources and compiles it into a single dashboard. It shows inventory, sales, finance, order management, logistics, and procurement data to give you a comprehensive view of your retail business.
What ERP does Walmart use?
Walmart uses a custom-built ERP called Retail Link to manage retail and business operations. The company also partners with Salesforce to provide its retail partners with the same technology that its department store uses.
What are the three common types of ERP?
The most common types of retail ERP are on-premises (which runs on your own private server), cloud-based (which runs on a remote server), and hybrid (a mix of the two).
What are some examples of an ERP?
- Microsoft Dynamics 365 Business Central
- Oracle NetSuite OneWorld
- Brightpearl
- Acumatica Cloud ERP
- SAP Business One Professional
- Epicor Prophet 21 ERP
