The first thing you might ask is, "what exactly is the definition of a Retail Management System?" A retail management system (RMS), is essentially an integrated set of digital applications that the retailer uses to operate their business. Retail management software typically includes: Point of Sale (POS), Customer Relationship Management (CRM), Sales Order Management, Inventory Management, Purchasing & Receiving, Reporting and data driven Dashboard applications. Some also offer ecommerce applications as part of their suite.
There are countless options for POS software and many software companies advertise as “retail management systems,” but while researching, it can be hard to determine what retail POS features are actually included in the software. We thought it might be helpful (as software providers ourselves!) to explain what our definition of an RMS is and why we think it’s important.
At the very least, most retailers use simple cash register-like systems to transact sales in the store. These systems actually grew from cash registers and function mainly as accounting packages. Many have limited or non-existent CRM and offer limited sets of “canned reports”. Some are entirely without purchasing/receiving, transfer, count, or flexible reporting and dashboard functionality. They are useful as a means to accept payments in the store and for simple reporting and accounting, but not for much else. Depending upon your need, this might be adequate, so it's important to really think through how you want to run your business. If you're focused on growth and need your retail platform to respond, you're going to need more flexibility and features.
One of the primary benefits of using a POS with true RMS capabilities, is that all retail operations occur in the same technology footprint allowing the retailer to run the business end-to-end with one system. Information is easily available so the retailer has visibility on how the business is doing across all functions. Even better, with a web-based application the retailer is able to access this critical data in real time from any web device (smart phone, tablet, laptop etc.)
For example, with an integrated RMS you can track and report on the entire lifecycle of an item in one system. From its start as part of an initial purchase order, to its receipt in the store or warehouse, as it is transferred between locations, when it is counted and re-counted – and eventually as part of a sale from the POS. Using CRM functionality the retailer then can see who purchased the item and what they purchased along with it – and many other important data points. Many of the simple cash register-like systems out there just take payments. They don’t handle the lifecycle of the product or the customer.
Some retailers choose to operate an RMS by assembling the various pieces from different software vendors: a POS system from Vendor A, an inventory management system from Vendor B, purchasing management from Vendor C, a business intelligence tool from Vendor D, an ecommerce system from Vendor E and so on. The costs of implementing multiple disparate systems and getting them to work together in harmony is prohibitive for all but the largest retail businesses. Each link in the chain has its own integration that needs to be built and managed, which is costly upfront and over the long term. An integrated retail management system will help you avoid the pain of integrating a variety of separate applications.
So why should you choose to use an integrated retail management system? Ultimately, because an integrated RMS has less technical overhead than separate, disparate applications, and because it puts you in a better position to understand and manage the flow of your entire business. You’ll be able to see a unified view of the data across your business functions and across your stores and all sales channels in one system. And lastly, because it amplifies productivity for your entire workforce (here's a great article on that).
Want to learn more about Springboard Retail's RMS features and how they can help your retail business boost productivity and margins? Our consultants would love to share their insight! Let's talk.
Topics: POS software