Retail Back Office Systems: What’s Hidden from Your Eyes?

In this article, you will dive deeper into retail back office operations and discover more about crucial digital systems ensuring merchants’ prosperity: financial, logistics & distribution, and marketing & sales. This discovery will help you define the strengths and weaknesses of your merchant business and move forward in the right direction.

Following the Statista forecast, US retail sales will increase to $ 5.94 trillion by 2024. When clients see engaging storefronts, communicate with a friendly staff and purchase first-rate items, nothing can stop them.

But have you ever thought about what’s behind this magic atmosphere? Who puts the goods on the shelves while we sleep? Who cleans trade halls? Or who ensures in time delivery to our places?

Here, I want to tell you more about back office systems allowing people to surprise you in eShops and brick-and-mortar stores. It is time to reveal the secrets of retail back office operations.

Retail Back Office is… Are There any Ideas?

“The back office systems are the power that makes the internal retail business processes work. Automation aimes to make them optimized: faster, efficient, sustainable, cheaper. And even more: owing to automation, an advanced retail back office should disappear at some stage. A variety of processes, supported by staff, can be run without its direct assistance. They would be run by software and technology. Achieving this goal is one of the primary indicators of a complete digital transformation.”

Victor Kmita, XME.digital CEO

Retail is a complex system. Its goal is to ensure steady profit by a continuous goods turnover. It is wrong to believe that retailers are only trying to sell something at a higher price. Thus, everything that the buyer sees, and that hidden from the eyes, operates to support the goods movement.

So, the shell of this business does not surprise anyone. But what about the back office systems?

A retail back office system is an area of activity that covers a certain set of business processes. All retail back office systems are engines of the whole business existence. They act independently of the others. But put them into one box and you’ll see how they support merchant development goals.

Meanwhile, retail back office solutions interact closely with each other. For example, it is impossible to hire employees or develop marketing without the ERP functioning. And sure, everything that the client can directly perceive by ear, sight, etc. depends on the back office operation. That's why all components should:

• work smoothly and accurately

• be flexible and allow a retailer to satisfy a dynamic demand

• achieve goals for the sake of overall development

Today, it's hard to imagine these systems operating without technology. A fierce competition forces retailers to optimize business activity and move with time by implementation of robust software solutions. Therefore, the largest retailers, such as Kroger, Walmart, 7Eleven and others, are always pioneers in using new technologies

What Does the Retail Back Office Systems Comprise?

The retail back office is a complex structure including countless systems and subsystems. However, three whales support this domain from the inside:

• Financial Sector: Its principal task is the correct distribution of resources & investment.

• Logistics & Distribution: This area is responsible for the goods turnover, storage conditions, delivery, etc.

• Marketing & Sales: The system that develops consumer interest and works to speed up product turnover.

One more equally dominant factor in retail functioning is the back office management. It is a group of managers controlling the business development. They can see the bigger picture, which helps them to create strategies, set goals, monitor the performance of each area. Management is a link that keeps systems working jointly.

Financial Sector and Back Office Systems that Support It

The retail financial area includes accounting, legal support, and human resources management systems.

The accounting back office system controls the flow of funds. It's responsible for transactions, bills, checks, and taxes. It calculates the employees' salaries, financing of any projects, campaigns, etc. To service it, retailers usually buy ready-made digital solutions.

The legal subsystem is engaged in full legal support of a retail company: registration of deals, marketing campaigns, transportation, relations between the merchant and government authorities, and so on.

The human resources area generates and uses information about employees. Owing to it, businesses can analyze how many specialists cooperate with them and which skills they have. It allows optimization of the people's work, managing their time, productivity, etc.

Logistics & Distribution Back Office System: Its Tasks and Importance for Retail

This system regulates everything related to the transportation and storage of goods. By the way, the last one is handled by the warehouse management software. It helps determine volumes of warehouses, specific places for products in storage, etc. In addition, there is a control system for loading and unloading goods. Because of it, employees know what to load primarily and what - later.

It's also worth highlighting the transport management and route control systems. The first one determines the type, size of transport for goods delivery, and its maintenance schedule. While the last one is needed to optimize routes and spend less time on them.

Thus, logistics is the most difficult retail back office system. If properly structured, it can accelerate turnover and improve the retailer's position in the market.

Marketing & Sales: Structure and Goals

It is the last but not least system of the retail back office. The first marketing task is to grab the customer's attention and collect data for analyzing clients' behavior. The successful approach is when the retailer's response to demand is updated in real-time and meets new customer needs precisely. A prime example would be selecting recommended items based on previous customer experience.

The marketing field includes omnichannel interaction with the client. Its effectiveness is an indicator of the seller's growth. The essence of this system are multichannel communication with buyers empowered by intelligent data movement and seamless integrations between back office systems.

Integral parts of sales are also the product catalog and retail space management. The first one is responsible for the quality and quantity of goods. The second one is focused on item placement.

Thus, a system that unites everything related to marketing and sales helps retailers move the product from the manufacturer to the end consumer faster, increasing the client's demand and boosting customer experience.

Conclusion

A retail back office is a complicated system of independent but interconnected components. They can be divided into three primary groups: finance, logistics, and sales. Knowing the scale of this structure allows businesses to discover what strong sides help back office solutions support operations and what weaknesses slow down business development.

If you need to ensure a high-quality discovery stage to boost retail back office software, but don’t know how to do it right, let us help. Drop us a line, and our specialists will do their best to provide you with detailed data about your current conditions and ways of solving back office issues.

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