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Why Are Tech Stacks Important for Retail?
Virtually every industry is becoming increasingly data-driven and reliant on technology. Particularly for retailers, choosing the right tools is the key to greater efficiency, better data analysis, increased customer engagement, seamless inventory management – and success!
If you’re like a lot of retailers, you probably already have a point-of-sale system (POS) and maybe even an e-commerce system. But these tools are only the tip of the iceberg when it comes to creating a retail tech stack that can streamline processes, provide new insights, and catapult your business to levels of efficiency and profitability.
In this article, we’ll explain what a retail tech stack is and highlight some of its essential components.
What is a Retail Tech Stack?
A retail tech stack is the combination of software retailers use to streamline and facilitate their day-to-day operations, gather insights, and provide better experiences to their customers.
While people often relate “retail tech stack” to e-commerce operations, there are plenty of components that are also useful in brick-and-mortar stores – where an estimated 80 percent of retail sales still take place.
Regardless of size or specialty, building a business-appropriate tech stack is crucial for any retailer wanting to become more competitive today – and grow in the future.
7 Tools to Consider When Building Your Tech Stack
There are multiple considerations when building a retail tech stack for the first time. While every business is unique, the benefits of a well-chosen tech stack remain similar – think about things like optimizing operations, boosting efficiency, expanding growth potential, and improving the customer experience.
These seven tools touch on all of these objectives – and they’re a great starting point for retailers just getting started with a tech stack. Think about your business objectives and how technology might help you to achieve them, and then choose a combination of tools to help you get there.
1. Point-of-Sale (POS) Systems
A good POS system can serve as your tech hub by providing real-time transaction processing, sales tracking, and some degree of inventory management. POS systems are a combination of hardware, such as cash registers, and barcode scanners; and software that records sales data and tracks inventory. Advanced systems can integrate with other software in your stack to help you track customer behavior and analyze sales trends, providing insights that can help inform business decisions. For retailers that sell in-store and online, an all-in-one POS system is essential for inventory management because standalone systems can lead to delays in data synchronization, which can lead to stockouts and frustrated customers.
2. E-Commerce Systems
Think of e-commerce systems as online storefronts providing a user-friendly interface with customizable merchandising options, easy order processing, and efficient management of customer interactions. Common components of these systems include product catalogs, shopping baskets, secure checkout processes, and order management tools. Integrating an e-commerce system with brick-and-mortar operations can be low-hanging fruit for companies that haven’t yet expanded into online sales. In addition to opening up a new sales channel, these systems can collect a goldmine of insights into customer behavior and preferences, which retailers can use to personalize and better-target their marketing efforts and to inform future inventory choices.
3. Customer Relationship Management (CRM) Systems
CRM systems are the key to targeted marketing and better personalization by helping retailers track important information about customers’ interactions with the company, purchase history, and preferences.
To get the most out of a CRM system, it’s essential to choose one with advanced analytic capabilities that can provide meaningful insights to help drive intelligent marketing efforts. According to Zendesk’s latest CX Trends report, more than half of customers expect a personalized experience, and 70 percent spend more with companies that offer a fluid and personalized experience. Adding good CRM to your retail tech stack could help you cash in by giving customers what they want!
4. Enterprise Order Management Systems
If you sell through multiple channels or maintain various fulfillment locations, consider adding an order management system to your retail tech stack. These systems provide real-time overviews of order status and important inventory data and can streamline fulfillment and return processing.
In 2023, 17.6 percent of all online purchases were returned via online channels – and nearly half of all in-store returns originated online. Optimizing the return process can help secure customer satisfaction by providing timely refunds, and also reduce the operational costs associated with return processing.
5. Business Performance Platforms
Business performance platforms, like Plecto, can drive sales and improve customer service by uniting employees from multiple locations in a little friendly competition as they work toward shared goals. The system’s dashboards and slideshows keep relevant KPIs on everyone’s radar while gamification features like badges, instant notifications, and contests can ignite their competitive spirit!
Danish clothing brand Shaping New Tomorrow uses Plecto to motivate employees in various locations with shared and individual KPI dashboards covering important metrics for sales and customer service, as well as gamification elements in the customer care department.
This suite of tools has helped the company to achieve over 1000 percent growth in one year. Swiss telecommunications provider, Sunrise, has also achieved new heights of success since implementing Plecto across its 90+ brick-and-mortar locations.
6. Inventory Management Systems
If your business sells physical products, you could likely benefit from adding an inventory management system to your tech stack. These systems help companies avoid overstocking or losing business due to stockouts by providing real-time inventory updates. For companies selling online as well as in-store, many of these systems integrate with order management systems while their demand forecasting and supplier management capabilities are useful all around!
7. Point-of-Purchase Marketing Solutions
Point-of-purchase marketing has come a long way! Digital signage and interactive displays and kiosks have all but replaced the boring posters, cardboard cutouts, and on-shelf signage of years past. Today’s tech-enabled on-site marketing solutions increase engagement, build brand awareness, and drive sales far beyond the capabilities of their predecessors. Whether the purchase is happening online or in-store, adding a point-of-purchase marketing solution to your retail tech stack can enable you to create compelling promotions that influence last-minute purchasing decisions.
A Few Final Tips
The right tech stack has the potential to transform your business, but choosing the wrong tools can be an ongoing headache.
When weighing your options, don’t be lured by the lowest possible price – or constrained by your immediate needs. This is a long-term investment in the future of your business, so consider things like the frequency and availability of software updates, quality of tech support, integration opportunities, and future scalability.
Taking your time to compare multiple options and choose the ones that meet your unique needs will pay off for years to come.
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SAGE CRAWFORD
Content Manager
