When the time comes for retailers to update their enterprise resource planning (ERP) and point of sale (POS) systems, many are cautious. Overhauling your IT is a big step, and an ERP and POS implementation impacts every aspect of the business. Get it wrong, and you could end up caught in a costly and time intensive exercise, landed with a system that doesn’t deliver all the functionality you need. But get it right and you’ll have a solid backbone to your operations, which will support you as you grow and diversify your business, and ultimately help you thrive.

As technology continues to reshape consumer retail experiences, luxury retailers must now think beyond the old, limited definition of “retail technology” when looking for a new ERP and POS system. There are thousands of POS systems on the market, and all of them will enable you to do the basics – add items, import descriptions, create promotions, sell, and get end-of-day reports. But the basics are not enough anymore. The ideal software solution will help you deliver great customer experiences, optimize your products selection, easily add new services, and stay agile and ready for change.

We have identified seven key criteria to consider as you evaluate the options on the market, helping you select the right POS and ERP system for your business’s present and future needs.

1. Does it support seamless shopping experiences?
2. Can you offer personalization?
3. How strong are the stock management capabilities?
4. Does it help you manage your employees?
5. Does it deliver strong business intelligence and advanced analytics?
6. Will it support changing business needs?
7. Are you buying from a trustworthy vendor?

Many software solutions let you superficially deliver a uniform experience for the customer. But to deliver effective and engaging customer experiences across channels, you need technology that gives you a clear view of your data, total control, and real-time information on products, sales, and customers for all your online and physical stores. If your data sits in siloes across separate databases, and your channels don’t communicate with one another, sooner or later you’ll find yourself unable to see and serve your customers.

• A system where POS, eCommerce, and ERP communicate in real time, enabling you to always see current information.
• Inventory transparency for customers, so they can see on the website if specific items are available before they order – or make the trip to the store.
• A clear view of stock levels for all items at any POS, and the ability for employees to order items for customers from other store locations or from the warehouse.
• Unified shopping cart, so customers can continue shopping and adding to their cart from several devices.
• Various purchase and fulfilment options, including
  − click and collect (also known as BOPIS; buy online, pick up in store)
  − home delivery
  − locker and curbside pickup
  − buy online and return in store, or directly to delivery driver

Customers expect to be treated as individuals and want to be recognized as such. When personalization is done well, it can bring significant benefits to your business. A report by Boston Consulting Group found that when the shopping experience was highly personalized, customers were 110% more likely to add additional items to their baskets and 40% more likely to spend more than they had planned.

To gain a complete view of each customer, you must be able to identify them whether they are shopping online, on the app, or in person, and connect all the data points so they form a single picture. This involves bringing together multiple data sources into one database, to obtain a unified view of consumers across transactions and channels, tied to your loyalty program (if you offer one).

• Loyalty programs that you can design based on your (and your customers’) needs and preferences, and which allow shoppers to collect and spend points and vouchers across shopping channels.
• Ability to match loyalty programs with transaction data, so you can show customers relevant savings, as well as personalized coupons and other offers such as bonus points on certain items.
• A unified database across shopping channels, so you can easily connect all of the customer’s preferences, loyalty information and sales data, whether they shop in store, on social media, on the app or on the web shop.
• Sophisticated data analytics functionality to spot trends in your customers’ habits and deliver more relevant offers and recommendations.
• Ability to reach out to your customers with personalized messages which are relevant to their habits and preferences

Luxury retailers need powerful inventory capabilities and a clear, realtime view of stock. You need to meet quickly changing consumer demand and make smart decisions that bring tangible value: more returning customers, more items sold at full price, and more personalized consumer experiences. You must be able to cater for different budgets, manage custom orders, and ensure you always have what your customers are looking for by efficiently distributing items to the right store locations. You also need to be able to understand what consumers are buying now and foresee what they will want in the future. With a huge variety of products to juggle and fast-moving trends to keep up with, you need powerful intelligent analytics and forecasting tools, which interrogate data to identify trends and patterns and help you determine which products to order and how to distribute them. Until a few years ago business analytics used to be considered an expensive extra, which only huge corporations could afford – but that’s not the case anymore. And as the industry continues to navigate supply chain disruptions, it will be critical for retailers to have software that helps spot trends, predict demand, and adjust quickly.

• A centralized database which enables your employees to see stock status in real time, and track what is available, what is in transit, and what has (or hasn’t) been ordered
• A centralized view of sales which allows you to track how products are selling across stores and online, see where there are stock shortages, and move products from one location to another if needed
• Ability to manage a large and varied mix of products across product ranges
• Tools designed specifically to optimize sales in store, such as automated discounting of slow-moving goods and supporting a wide variety of promotions
• Visibility over your whole retail chain and tools to balance stock across stores based on which locations lack certain items and which have a surplus
• Automated replenishment for specific items to prevent possible out of stocks and minimize replenishment effort and costs
• Tools to maximize store space and determine the best product mix per location and time period
• Ability to assign variants to each item (for example, style, color and size) to improve inventory maintenance and fine-tune the reordering of items
• Ability to forecast the exact quantities to order for stores and warehouses, taking into account multiple sales history trends including seasonality, holidays, and annual events
• Ability to set different types of replenishment rules for different kinds of items, for example fast-moving products, non-recurring ones, and slow movers

The average staff turnover rate in retail remains high compared to other industries, hovering around 60% according to the National Retail Federation. It’s a problem that leads to endless cycles of sourcing, hiring, onboarding, and training, draining store management time and resources and costing your business.

A modern POS system can deliver the capabilities to plan employee schedules and track employee costs and performance. It can also give you the insights you need to optimize your use of employees, decrease staff turnover, and help you pin-point top-performing people to reward. This recognition can really pay off. A study by SurveyMonkey found that 63% of employees recognized at work are very unlikely to seek a new job.

• Ability to schedule shifts, estimate staff costs, and compare estimates against your budget, so you can ensure your business is always operating
  profitably
• Automations that help you decide how many employees to schedule, taking into account busy and quiet periods where you may need more or
  fewer staff
• Automated tracking of worked hours and staff commissions, where applicable
• Permission settings at the POS. By only allowing specific roles perform actions like returns or special discounts you can reduce the risk of fraudulent activity
• Loss prevention modules that warn of suspicious activity at the POS
• Communication tools to simplify the exchange of information among employees, for example to speed up requests for days off or shift changes.

Holidays, back to school, summer heatwaves – certain periods in the year have a huge impact on retail sales performance. The question is, are you properly prepared for them? Without the tools to analyze your sales data and make accurate forecasts, you could be missing out on some big opportunities, especially during busy trading periods.

In the retail industry, luxury brands stand to gain significant benefits from the adoption of data analytics. In its article ‘Jumpstarting value creation with data and analytics in fashion and luxury,’ McKinsey confirmed that companies that make data-driven decisions around stock and store optimization increase sales by 10%.

• Clear information, and the ability to create personalized views and reports. You should be able to analyze your data and interact with it without needing a data analyst
• Data visualizations and dashboards, so you can see at a glance what products and locations are driving revenue, and where you should act
• Real-time insights and reports that can be accessed by your employees whenever they need the information, wherever they are
• Ability to track and compare productivity per time period, employee, store and area
• Insights that help you adjust your pricing for specific items and item groups so you can grow sales and margins
• Ability to manage sales and purchasing budgets with open-to-buy functionality. The system helps you figure out how much stock you need to buy in relation to your available inventory
• Artificial intelligence-powered tools to identify patterns and trends you wouldn’t have spotted
• Predictive analytics that draw from internal data (like historical sales) and external factors (like holidays, weather, or events) to help you forecast
  demand and plan purchasing.

Every retailer needs future-proof technology that will support them as they grow their enterprise, diversify their offer, and adapt to new business needs.

While you may already have plans to open new locations, you can’t always predict accurately how quickly you’ll grow. And even if you aren’t planning to expand to different countries yet, that time might come. Then, you’ll be happy you selected a software solution that makes it easy to open new stores, perhaps in countries with different regulations, currencies, or languages.

Similarly, you may not already offer services outside your core offering, but in the future you may decide to open an in-store wine bar or restaurant, or offer in-person and online consultations. Several luxury retailers, from Armani to Tiffany & Co., have already diversified their brand with additional services and seen the benefit. Studies have shown that retailers that invest in getting shoppers to linger in store, for example by having a food service area or special events, see a sales increase of 20% to 40%.

While you can add extra software solutions to manage your food production, table service, events, bookings, and so on, that’s not the best solution. If you already run non-retail services, or plan to do so, it pays off to find an ERP and POS system that can support different industry requirements out of the box.

• A scalable software solution, which allows you to open new stores easily
• An international software system, which can support different regulations and requirements, and is available in multiple languages and currencies
• Industry-specific functionality beyond retail. If you plan to open a cocktail bar, you should be able to easily add necessary capabilities such as menu management, food planning and ingredients tracking
• Ability to offer services and experiences. Check if you can easily add ticketing (if you wish to run in-store events), reservations (for example to book personal consultations) and rentals (for example to rent out space for private parties)
• Ability to manage all customer and business data from events, services, and sales from retail and food service within one platform. You should be able to get a complete overview of all your business at once: track loyalty, plan promotions, and understand consumption patterns across all business areas.

This is a decision you don’t want to rush into. It pays off to take the time to get the vendor and technology selection process right. Most vendors will tell you that they can satisfy all your business requirements, but it’s worth checking that there is substance behind their words. Clearly define what functionality your business needs and pin vendors down on specifically what it would take to deliver those critical business functions in terms of cost, time, complexity, and training.

• Reputation and history. Choose a trustworthy vendor – someone who is well regarded in the industry, and who won’t disappear overnight.
• A solid foundation. What is their technology stack built on? Your ERP is at the heart of your business – you want technology that is known and reliable.
• Compliance with recognized standards and quality frameworks. This demonstrates that they adhere to industry best practices and are taking the necessary steps to provide the highest quality service.
• Strong industry-specific expertise. Look at their customer cases, and make sure they are backed by an experienced team that truly understands the challenges and requirements your business faces.
• Capacity. Does the vendor have the capabilities and partner network required to meet your local and international business requirements?
• A clear product vision. Check what new functionality they intend to add to the product and how they will continue to innovate to keep your business up to date with the latest technology developments.