What is Retail ERP?

ABTO Software
  • Date Published
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  • Reading Time 11-Minute Read

Enterprise Resource Planning (ERP) refers to software solutions implemented by companies to optimize their business operations.

Such operations include accounting, inventory, purchasing, project management, compliance management, risk management, and more. Enterprise Resource Planning (ERP) commonly includes a built-in enterprise performance management solution. This tool helps to optimize operations, draw forecasts, and create exhaustive reports.

ERP systems integrate numerous business processes and provide information transfer between departments. By collecting and processing a company’s operational details from multiple different sources, ERP systems eliminate duplication and ensure data integrity with a single source of truth.

Among others, the biggest business sectors increasingly implementing ERP solutions are distribution and retail. ERP software helps both omnichannel and multi-channel retailers to establish smoother communication between employees and control all processes at the different stages of the supply chain.

ERP systems for retail are real-time software solutions accurately customized to integrate business processes. With an ERP system, a retailer can streamline, automate and easily manage front-end and back-end activities. These include inventory, purchasing, store and warehouse management, payroll, accounting, risk management, supply chain and distribution. In addition, such tools cover reporting and analytics.

But why do distribution and retail need to implement Enterprise Resource Planning in their business routine? And what are the core functions of ERP in retail?

Distinguishing CRM and ERP

People oftentimes confuse Customer Relationship Management and Enterprise Resource Planning or consider these solutions to be the same. In today’s business world, both systems are vital for productivity and efficiency but have significant differences when it comes to their complexity and application.

Sometimes CRMs and ERPs are integrated into one complex solution. Such a business approach has many significant benefits, especially for large enterprises.

The benefits of CRM and ERP integrated into one system:

  • Eliminated data duplication
  • Facilitated employee cooperation
  • Better customer support
  • Better sales overview

But what are CRM and ERP? Let’s five deeper into the nuances.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM) is a software solution, which helps manage interaction with clients. A CRM keeps track of both potential and existing customers, marketing campaigns, and sales.

A properly built CRM manages information, provides insights, and helps make better sales-related decisions. With such a tool a business can improve the performance of marketing and sales and increase its profitability.

CRM systems help retailers:

  • Track customers (gender, age, demographics, preferences)
  • Track customer order history
  • Improve marketing
  • Automate repeated daily routines
  • Identify new business opportunities
  • Identify new sales leads
  • Learn what and when sells best
  • Facilitate better customer support

Enterprise Resource Planning (ERP)

In contrast to CRM, an ERP is facilitating all processes, including manufacturing, vendors, employees, and more. An ERP helps control multiple departments, improve communication between those, streamline operations, increase productivity and profitability.

An ERP notably simplifies and centralizes internal processes, which include supply chain, planning, scheduling. By investing in an advanced tool, a business can obtain the opportunity to identify its most critical parts.

ERP systems help businesses:

  • Integrate departments and improve the interaction between them
  • Share data between departments without delay and duplication
  • Track progress, productivity and overall performance of employees
  • Simplify accounting and payroll
  • Standardize inventory and purchasing
  • Automate analysis and reporting
  • Improve accuracy of data
  • Manage employees and shifts
  • Lower purchasing costs
  • Eliminate purchasing errors
  • Reduce inventory costs
  • Reduce operational costs

What functions benefit from custom ERP for retail?


Well-designed retail ERP software is a multi-channel solution that facilitates in-store and back-office activities. This means the business can focus on increasing its productivity while improving customer experience.

ERP systems provide the following advantages:

  • Inventory and purchasing details are accessible anytime
  • Simplified adjustments
  • Order and return tracking
  • Customer updates and reporting


Modern retail ERP systems optimize accounting, which helps business leaders direct resources more wisely. With the right platform, business owners can reduce the amount of daily paper bureaucracy, automate some routine tasks, and overview both expenses and income.

A custom ERP system can help you to:

  • Manage emerging accounting needs

A custom enterprise solution provides for easy estimation, budget planning, vendor and wage management, and more thought-out allocation of resources for material, transportation, etc.

  • Track capabilities

Tailor-made tools provide for simplified schedules, credit management, and seamless revenue tracking.

  • Automate processes

Financial modules facilitate faster business growth by helping resolve cash flow problems, simplify operations related to accounts receivable and payable, create reports, and focus on core business processes.

  • Reduce errors

Human mistakes can be the reason for inaccurate accounting information, which can seriously affect the quality of regular financial analysis and reporting.

Human resources

Among many other things, a reason to implement ERP for retail business is optimized employee management. Advanced software helps simplify hiring and onboarding processes as well as monitor employee performance.

Smart solutions significantly improve:

  • Hunting and interviewing activities
  • Hiring and onboarding processes
  • Employee cooperation
  • Performance monitoring

Supply chain

Another reason to implement ERP for the retail industry and get the most out of your business is the supply chain management feature. Advanced technology (artificial intelligence, machine and deep learning, and blockchain) significantly optimize all internal supply chain management operations.

ERP tools help manage:

  • Inventory
  • Purchasing
  • Multiple stores
  • Large warehouses
  • Distribution and sales activities
  • Product demand

And more!

Why retailers need ERP to boost their business

Growing average life expectancy, emerging digitalization of many life areas as well as the global pandemic significantly increase customer expectations. And your customers’ expectations are the key factor when it comes to business growth.

No matter whether you’re B2B, B2C or D2C, your goal is clear: to grow your business and increase your profits. However, when your business is evolving, so does the complexity of your operational processes.

Every manager sooner or later faces the problem of miscommunication between departments and inefficient data management. This leads to inefficient operational processes and significant financial loss.

But what are the main signs that something went wrong?

Here are the factors, which indicate that you need to optimize some business processes:

  • Data is entered manually
  • Communication between different departments is inefficient
  • Reporting takes too long
  • KPIs are not optimized

Among others, retail ERP should include the following core features:

  • Integrated CRM for efficient customer management and support
  • Integrated point-of-sales
  • Materials and inventory management for accurate demand forecasting
  • Multi-location management of warehouses and stores
  • Retail & wholesale functionality
  • Vendor management
  • Accounting management for identification, measurement, analysis and interpretation of important financial information
  • Risk management
  • Order and return management
  • Advanced reporting and analytics for more accurate decision-making

With increasing business success, some managers begin questioning whether important internal operations work harmoniously. When there are some internal processes poorly configured, the company might suffer financial losses. For example, poor communication between departments leads to duplicated data and lost work hours. For a growing company, this can be a great obstacle to success.

Implementing an ERP solution might help solve problems related to poor management or miscommunication. Proper, well-designed ERP software optimizes operations, draws forecasts, and creates insightful reports.

Main retail ERP modules

Product information and inventory

Product information is an important factor when speaking about gaining and retaining potential customers. Centralizing relevant product details, including availability and price, can be game-changing.

The faster the business is growing and expanding, the more complex inventory becomes accordingly. To ensure smooth operation, product details should be properly processed and accessible.

Is the wanted product in stock? Where is it located? Is it in transit? When everything’s organized properly, managerial staff can access necessary information within seconds.

This module might include information about:

  • Information panels
  • Inventory valuation
  • Product moves
  • Inventory changes
  • Equipment maintenance
  • Equipment replacement
  • Procurement changes
  • Faulty products

Multiple warehouses and stores

Maintaining and managing warehouses and stores in multiple different locations might get quite complicated. But without proper organization, managers and warehouse workers might get easily overwhelmed.

This module might include details about:

  • Multi-location stores
  • Multi-location warehouses
  • Product prices
  • Seasonal discounts
  • Product barcodes
  • Serial numbers
  • Registered customers
  • Cashback programs

Financial management

Custom-built retail ERP solutions significantly simplify financial management and optimize investment flow. With the right tools, the retailer can overview and optimize logistic expenses, additional fees, rentals, wages, and other financial information.

This module might include:

  • Working shifts
  • Tracked sessions
  • Sick leaves and vacations
  • Payroll sheets
  • Salary disbursement
  • Monthly and annual reporting
  • Balance sheets
  • Income statements
  • Cash flow cycle management
  • Profit and loss statements

Risk management

Well-designed retail ERP solutions can provide for improved risk management. Having the right tool at hand, the retailer can track material demand and make quick changes, automate certain operational processes, facilitate cooperation between departments to reduce human error, and access business data to make thought-out decisions.

This module provides for:

  • Demand-driven planning
  • Error reduction
  • Compliance with legal regulations
  • Smart decision-making

Supply chain

In retail, no matter if we’re talking about online or offline business, partners, vendors and customers are key. This is, proper management of the supply chain is an important component of the company’s success.

ERP systems notably simplify order management, packaging, shipping, distribution and customer management. This means increased productivity, cost and time efficiency, as well as almost no delays in the supply chain.

Business analytics and reporting

ERP systems might provide insightful analytics and reporting by processing previously collected business data. Such data might include employee retention, warehouse and store statuses, cybersecurity information, investment and profit overview, and more.

This module provides for:

  • Quality data
  • Standard charts
  • Internal and external reporting
  • Insight-driven decision-making

A retail ERP system’s business benefits

Cost and time efficiency

Enterprise Resource Planning solutions are designed to optimize operational processes, including accounting, inventory, purchasing, invoicing, payments, human resources, sales, distribution, and everything in between. With a custom-made solution, business leaders can determine inventory needs and make quick adjustments, manage warehouses and stores, and better analyze expenses and revenue.

ERP systems also help to automate day-to-day processes, which usually notably overwhelm managerial stuff. Such processes include regular data entry, barcode scanning, regular inspections, incident reporting, and more.

Streamlined decision-making

ERP software provides access to important business data, which significantly streamlines decision-making. Simply put, business owners can generate insightful reports related to orders, returns, logistics, distribution, and other important processes.

ERP tools not only improve decision-making but also provide for business transparency. That means, everything happening within departments can be easily overviewed.

Improved sales

One of the greatest business benefits of custom ERP solutions is the completely centralized sales information. Omnichannel functionality is an important component to consider, especially when there are multiple locations (warehouses, stores, and more).

It might be difficult to organize sales information that contains information about orders, returns, and more. The right management tool can make this process more productive.

Customer relationships

ERP software might include CRM functionality for significantly improved customer relationship management. This integration can provide a central information repository, which contains important details such as demographics, tendencies, and more.

To increase your profits, attract customers, and scale your business, you need to improve your shopping experience. The right business solution can provide valuable insight on orders and returns, payment methods, new trends, registered customers, loyalty programs and other seasonal discounts.

When to implement custom-built retail ERP?

  • Data is entered manually

ERP systems reduce or eliminate manual data entry and help employees focus on more important processes. Smart solutions extract relevant data from PDF files, documents, images and websites, and display that data in a structured format (JSON, XML, CSV, etc.).

  • Communication between different departments is inefficient

ERP systems provide a centralized database with accurate, real-time data, eliminating repetitive daily routines. This means, that business data is no longer exchanged through calls, email chats, or messaging service.

  • Reporting takes too long

The right management tool can help to create accurate reports, schedule them, and automate the process. With a centralized database, managerial staff can forget paper documents and create comprehensive reports in seconds.

  • KPIs are not optimized

A tailored business tool can optimize business KPIs, including both financial and marketing KPIs, and more. With accurate, real-time information, business operations can be measured through benchmark comparisons, presentations, reports, and more.

Main advantages of implementing retail ERP

Managing multiple disjoint operations can be really challenging, especially when there’s miscommunication between departments, the reporting takes long, the KPIs aren’t optimized, and data is still entered manually. So how do you grow your retail business despite those many challenges?

A custom-built retail ERP can change the game.

ERP solutions help companies optimize their business operations, from accounting to proper customer service. These operations include accounting and payroll, inventory and purchasing activities, warehouse, store, employee and risk management, demand analysis and forecasting, customer relationships, and more.

ERP software integrates multiple business processes and ensures thought-out, reasonable resource direction. Modern solutions provide accurate, real-time data and smooth point-of-sale integration, automate navigation and rendering, eliminate duplication, and improve the omnichannel experience.