The Future Of Retail Management System: Trends To Watch

Not too long ago, many theorized that the Internet would eclipse brick-and-mortar stores. Yet while the  Internet has certainly had a tremendous impact on retail, fifteen years after the craze the brick-and-mortar stores are still in place. In fact, the Internet has proved to be a great extension to brick-and-mortar stores. Most large retailers have embraced the Internet with multi-channel sales strategies, including e-commerce, online advertising and online product information, specifications and comparisons.


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Meanwhile, brick-and-mortar retailing has continued to evolve with customer-centric promotions at the point of sale (POS) , digital signage, loyalty- and registry-based kiosks, self-checkout and “save-the-sale” inventory look-up at the POS. Despite the huge growth of Internet retailing, today’s brick-and-mortar stores process 95 percent of retail sales transactions, and almost all of those transactions are conducted through a traditional POS terminal.

Some retailers innovate in-house; elsewhere, startups are bringing modular improvements to the in-store experience. Online sellers are making advances in logistics while growing their marketplaces to include wide varieties of new and used goods sources from a network big and small businesses. Here we’re tracking the latest developments.

The Way We Buy Is Changing

While retail commerce is still overwhelmingly in-store, the very notion that “in-store” and “eCommerce” are discrete has begun to dissolve. Big stores are trying to figure out how to engage customers on smartphones while web-native retailers like Amazon and eBay are extending their services into in-store territory with same-day fulfillment options. As the nature of the store changes, store operators are hunting for new technologies and partners who can help them figure out loyalty, in-store behavior, comparison shopping and what to do with social networking.

Areas of Frustration for Big Retailers

Here are the areas of frustration for big retailers surveyed according to an interview-based study by the consulting arm of electronics-maker Hitachi. Here are the pain points which might be the most feasible to address with a startup software product.

Hitachi Consulting conducted qualitative interviews with 20 of the leading retailers, including Debenhams, Waitrose, River Island, Halfords, Shop Direct Group, Thorntons Plc, TK Maxx, BHS, Argos, Signet Trading and ATS Euromaster among others. The report identified these areas of IT focus (and frustration) for retailers:

  1. Managing business expansion into new markets, including through joint ventures and franchises
  2. Tailoring brands, ranges and promotions to multiple or new channels and markets
  3. Reporting capabilities not keeping pace with business demands
  4. Customer data locked in source systems and not available in corporate information systems
  5. Difficulty in extracting and manipulating meaningful data from corporate information systems
  6. Almost every job function is less than very satisfied with their Business Intelligence provision
  7. Those in online are significantly more satisfied with their Business Intelligence services than those in multichannel
  8. Business Intelligence is not closely enough integrated to the business process
  9. There’s a strong appetite to get closer to real time information
  10. Information requires significant rework before it can be presented
  11. ‘Spreadsheet Spaghetti’ is still prevalent
  12. Desire to improve data reporting capabilities, including dashboards and complex analysis
  13. Mobile is still not central to Business Intelligence plans

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Is Retail Management Software The Key To The Future Of Shopping?

A retail report cited in an article on the Minneapolis Star Tribune’s website predicts that over the next decade consumers will shop closer to home and make more frequent purchases rather than one weekly trip to a big department store.Retail management software is the key moving forward.

When it comes to smaller stores, it’s easier for shoppers find what they need and get out quickly without having to deal with long lines and difficult parking. Granted, the downside of smaller retail stores is that they lack room for a wide breadth of products.

But technology is solving this problem. These small retail shops can use the Internet to extend their space. If retailers are able to help customers order products online while they’re in the store and have those products shipped to the customer’s house, they’ll win a lot of business. This is great customer service, but of course it requires retail management software.

These smaller stores can offer convenience, speed and personalized customer service without needing to stock every item. However, since shoppers know that the odds of these retailers carrying everything they want are low, store owners and managers need to make the shopping experience convenient, easy, simple and pleasurable.


Right Choice – Makes the Difference

The retail and Point of Sale (POS) software market is highly fragmented and has many vendor options. While there are a few large retail software vendors for larger companies, the retail software vendor market is dominated by many different smaller vendors that focus on different industries (such as restaurants, retail stores, etc.). While some vendors offer an integrated accounting and POS solution, others offer POS solutions that integrate with some of the more general financial/ERP software systems. The following are some of the key retail functionality that you should consider as you evaluate retail software solutions.

Supply Chain Integration

Using real-time insight, retailers can fine-tune customer programs as necessary and immediately address problems with supply chain, merchandising, or marketing departments of their operations, among others. For example, using real-time inventory data, a retailer can re-organize the supply chain to ensure that the right product is delivered at the right time. Not only does real time analytics allow easy and time-saving inventory, it also cuts costs for extra inventories, which means more money for the business.

Customs Consultant / Brokers Integration

Global trade is more of a challenge today than ever before. Businesses must navigate complex trade agreements, maintain compliance with a host of international regulations, and keep the heightened importance of national and international security top of mind. Businesses soon will get rid of the manual customs form filling and will switch to automated forms filling referring to the online product catalogs with detailed Tariff Codes and the latest pricing form the vendors published.

See how Candela Plus is helpful to manage integrated supply chain, customs consultants and shipping powered by automated forms filling and workflow automation.

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Merchandise Planning

Merchandise planning helps retailers more accurately track and assemble data to help improve buying, distribution and store operations throughout the year, thereby improving efficiencies, reducing inventory, and increasing sales. This includes budgeting and forecasting for daily, weekly, monthly, and seasonal budgets; assortment planning to deliver the right mix of products and value for targeted customers; merchandise changes to make adjustments such as new classes of product; and seasonal adjustments which allow the retailer to adjust pricing, markdown dollars by period, and plan seasonal sales targets.

Price Management

Retail systems help retailers manage and optimize item pricing and allow the home office to download any changes to specific stores or across the enterprise. Price management functionality includes: promotional pricing for items with effective dating, giveaways, “Buy X, Get Y” discounts, and program price changes. Retail systems also allow corporate/volume price breaks and tiered pricing discounts based on rules set up and maintained within the system.

Employee Management

Employee management includes workforce scheduling for each store and the entire sales force. This information can then be used to predict what days and hours to staff up or cut back. The system also tracks the register used by sales clerk, credit items sold to appropriate sales clerks, labor cost, associate selling budgets and the assignment of system security levels for each employee.

Cooperative Advertising – Cooperative advertising is the ability to track advertising efforts between your organization and trading partners and suppliers. Advertising costs can be shared among multiple companies and retail systems offer the ability to track these agreements and the sharing of these costs.

Customer Relationship Management

CRM for retail aims at helping retailers understand customer-buying habits and provide better customer information across departments and throughout the organization. CRM can be used to promote marketing and merchandising across channels, provide consistency across all customer contact points, and target valuable customers. CRM provides the capture of customer detail, such as demographics, preferences, purchase history, problem history, account balance, and credit information. It allows the retailer to analyze individual and chain-wide buying trends by region/time of day/season/location, shopping frequency, and purchase amounts. The retailer can then push sales, conduct relationship selling to targeted customers, and focus efforts on selling extended warranties to customers who recently purchased serviceable items.

Integrated Solution

In old days, for most retailers, POS was a category of software that is chosen separately from back-office and other in-store systems. But today it is extremely important that most of the different systems should be in-built.

Peripheral Hardware

Retail software products have integrated with hardware vendors to provide peripheral POS compatible hardware such as touch screens, printers, barcode scanners, scales, line displays, cash drawers, and magnetic card readers. Some of this hardware will also attach to tablets, and smartphones. These peripheral devices interface with the retail and business systems to offer a completely integrated retail system that eliminate the need to manually enter data from one system to the other.


Bar codes allow the tracking of inventory from the moment it arrives from suppliers, through the stocking and inventory process and sale of the merchandise. This functionality has revolutionized product and inventory controls in a retail organization. Both internal bar codes and universal UPC codes can be printed and used.


Retail software is moving towards the development of wireless technology such as Radio Frequency Identification (RFID). RFID uses intelligent computer chips placed on the tag of a merchandise item which then communicates with a handheld device, such as a tablet, smartphone, other handheld device, or central computer. The benefit of this technology is that inventory stocking and locations can be maintained in real time. The computer can automatically reorder inventory that is low as it has a constant, real-time view of inventory levels. Physical inventory counts become unnecessary as the computer has a view of the entire inventory on hand. Another key advantage is that security is improved as the RFID chip communicates its location in the store. POS registers may eventually become unnecessary, as RFID technology provides the ability to automatically charge a person’s credit card as they pass an RFID scanner with the item they are purchasing.

Floor Layout Planning

Floor layout planning assists the retailer with the optimization of the layout of the selling floor to increase sales and improve convenience for consumers. An example of this is the placement of smaller, low priced items at the register to induce impulse buying by the consumer while they are waiting to check out.

Store Opening & End-Day Reporting

This functionality allows sales associates to conduct the steps for sign-in and store opening. It also includes the store closing at the end of the day with the ability to view and print journals from any register by batch and/or receipt number, and run X, Z, and ZZ reports. Retail software maintains transaction history along with an audit trail of voided receipts, date and time changes, etc. Other audit functions are standard reports such as cash receipts balancing, bank reconciliation, and detailed audit reports.

Time Clock

POS terminals/registers/handheld devices can function as an employee time clock by allowing sales associates to check in and out of the register. The central computer can then identify the sales associate that is operating each register and integrate to the back office general ledger and payroll software.


For customers needing assistance, retail systems offer the ability to lookup items and display the item’s picture, description, location, and price. For retail chains, this lookup capability allows visibility to other stores to direct customers to nearby locations that may hold an item that is out of stock. Inventory searches can be done using “wildcard” information such as partial words, and attributes can be searched such as keyword, color, size, vendor, price, etc.

Customer Information

Retail software offers visibility of customer information (buying history, payment history, customer contact information, demographics, total sales, number of visits, and last visit date) at the POS terminal/device. This provides more personal service, enables the sales associate to suggest add-on items and sale items, provides volume discounts, and makes it possible to do automatic discounts and differential pricing for special customers.

Customer Checkout

POS software customer checkout functionality includes easy data entry via hot keys and shortcut keys, unlimited line item entry, the automatic computation of tax, post voids and process returns. Another great feature is the ability to serve others while keeping a stalled transaction on hold and to continue making transactions should the in-store network go down. Handheld devices such as tablets offer the ability for sales associates to check people out at any location throughout the store.

Multiple Payment Types

Retail software offers the ability to accept multiple forms of payment like cash, check, credit card, gift certificates, gift vouchers, coupons, government stamps, and store credit accounts. POS software also includes credit card swipe links to online credit authorizations. POS systems allow partial payments of transactions, allocation of a payment to multiple transactions, the processing of deposits on orders, layaways, and in-house credit.


Retail software ensures that each receipt clearly identifies the register to which the receipt is associated. Some products sequentially assign numbers for each receipt. Other products include intelligence with the number such as the register and the year that the transaction occurred. POS systems include the reprinting of receipts, printing of kit components on a receipt, customization of receipts with a promotion for new products and specials.


Periodic upload (polling) of each store’s POS system can be setup to allow the headquarters to have a real time view into the operations of the stores and enable management of company wide changes such as sales and promotions. It also enables the headquarters to plan for the chain as a whole including the movement of inventory. Alternatively, if you have implemented a Cloud solution (access the system through the internet) then your data will all be stored at a central location, eliminating the need for polling.

Inventory Management

Retail systems enable the visibility of inventory at a single store as well as for the company as a whole including all stores, warehouses, and in-transit inventory. They allow the transfer of inventory between stores and commitments of “Out-of-Stock” inventory with the ability to notify customers upon receipt of merchandise. Serial numbers can be tracked, kitting of multiple products can be sold as one parent product, and consignment inventory can be maintained. Inventory plans are setup to include inventory turn targets by class, determine overrides or exceptions by period, calculate stock to sales amounts, receipt plan and period open to buy amounts, stock-turn review, stock to sales ratios, and markdown planning.

Commissions – Commissions are unique to every organization. Retail software offers flexibility for the tracking of sales information and commission calculations.


Flexibility means being able to respond to business requirements on the fly. Flexibility means a retailer can adapt the software at their head office and then instantly download changes to the stores so that the store systems are updated in minutes rather than months.

Operating System

Although DOS and the various desktop versions of Windows are still frequently found at the point-of-sale, Windows 2000 and XP seems to be widely regarded by retailers as the operating platform of the future. The momentum behind XP as the operating system of choice for POS has been building.

Because of its higher levels of stability and security, XP is penetrating the store level both at the POS and the in-store processor much more strongly than the desktop versions of Windows. In short, the software should be a windows based and should support 2000 and XP.


You never know what can happen in a retail business. A new format may be developed, or a merger or acquisition may take place, changing the strategic direction of an entire company overnight. It’s important to be prepared, and to have a POS system that can scale to accommodate the very largest or the very smallest of stores. Retail management software should be modular. It should grow with you.

Multiple classes of retailing – (Garments, Grocery, IT, Food)

POS software should be able to accommodate different classes of retailing. The applications should run in multiple retail environments varying in format, size, volume, product assortment, and promotional structure.

Out-of-the-box usability

For the vast majority of retailers, it’s a much better idea to buy out-of-the-box POS software than try to develop home-grown systems. Buying an out-of-the-box software offers substantial cost benefits, since the software vendor is able to distribute the development costs over multiple clients. Vendors can also typically do a better job with support. But that doesn’t mean retailers should be satisfied with a “one-size-fits-all” solution. A packaged software product should be easily customizable by the retailer, without the need to alter internal source code.

Ready for Future – Ongoing Upgrades

Retail management software vendor should be continually enhancing its product, driven both by its expertise in how it sees the marketplace unfolding and by customer requests. When he does this, the result is significant advantages to its retail customers.

“Future vision” is another important aspect of long-term vendor reliability – the ability to anticipate development needs in advance of their becoming critical.

A good Retail management software vendor should demonstrate enough “future vision” to have already committed substantial resources to support new forms of technology such as data synchronization.

Easy to install, learn and use

Finally, a Retail management software should be organized in such a fashion that it shoulders the responsibilities of a retailer. Despite the power and scope it must be easy to adapt, learn and use. That means you save money on the training and implementation. You save huge money on manpower and employee turnover can be handled easily.


Vendor reliability – Evaluating a retail management software company

As discussed earlier, buying retail management software is no time for experimentation. A retailer should choose a vendor with a proven track record of installations and a large enough organization to be credible. A retailer should also want to have confidence that the vendor will be around for long, and that it will be able to respond to needs quickly and provide custom development services when necessary.

Along with product cost you must ask for any hidden cost like training and support charges, Software Updation charges, and Annual maintenance charges (AMC) and Data conversion charges.

  • Do they provide barcode and pos hardware? If yes what are available options.
  • How much time they take to respond a service call?
  • What if the software has a bug and they don’t fix it?

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