Retail's biggest challenge isn't inventory, it's talent - a cloud ERP retail view from Acumatica's Josh Fischer

Jon Reed Profile picture for user jreed July 29, 2022 Audio mode
Summary:
When I asked Acumatica's Josh Fischer about retailers' biggest obstacle, I expected either inventory or inflation. But his answer was talent - and the reasons point back to why ERP and commerce systems need to be unified in the first place. Enter Acumatica's B2B news with Shopify.

Onboarding training culture employee experience concept © Rawpixel.com - shutterstock
(© Rawpixel.com - shutterstock)

Retail is all about getting the timing right. When ace pitch person Megan Nielson sent me a tempting Acumatica retail story, I was chasing others, including one on Acumatica's new CEO John Case. Then, Acumatica issued some retail news of its own: Acumatica Broadens Strategic Relationship with Shopify to Enhance Experiences for B2B Buyers

Why do I like the Shopify angle? Because e-commerce solutions like Shopify and BigCommerce have finally narrowed the e-commerce experience gap - enough to give companies legit storefront choices beyond Amazon. The timing was now right; I soon found myself on a video chat with Josh Fischer,  Director of Product Management, Retail-Commerce Edition at Acumatica.

The biggest retail challenge? Employee recruitment and retention

So I asked Fischer: with so much retail upheaval going on, from inflation to B2B/B2C conversion, what are the top retail issues Acumatica customers? I thought Fischer would go straight to inventory, but he surprised me:

There's obviously inventory challenges, and there's timeline challenges. But one of the things I'm hearing over and over again, is: just finding employees is very difficult. Staffing your organization is difficult, and the staff don't last long.

Old school ERP systems might be able to duck that challenge. But modern cloud ERP,  by definition, must engage the frontline workers. As Fischer explains, that includes retail associates:

We had a meeting with a customer a couple weeks ago, and they were talking about how their ERP has to be easy enough that an hourly worker can understand how it works, and do their job within the ERP system within the week. There's a good chance they're not going to be here in three months, and then somebody else is going to come in.

So when you're working through things like returns management, you're going to have an hourly worker on the phone working with customers, and you have to make it as streamlined and as seamless as possible... So the ease of use is incredibly important.

But hold up: when Fischer said "the staff don't last long," he ran into one of my bones of contention. Out came my retail-worker-tirade: I believe retailers need to start paying wages that encourage a little more longevity. I get that turnover is never going to go away. But I'd like to see retailers figure out how to keep their employees around longer, because I think their employee well-being usually translates to customer well-being.

Yes, maybe automation requires fewer associates, but invest more in the ones you have. It's not just wages: one underrated aspect of employee fulfillment is being equipped with better tools and information. When customers walk into a store, they have gobs of product information on their phones. They want to talk with someone who can meet them on that level.

I'd like to think a solution like Acumatica can at least help retailers with this employee morale problem, by giving them tools that help them to have satisfying interactions. End rant. Fischer's reaction?

Nobody ever thinks about a retail career... I'm basically working the register now. That puts you in a position where the people that are working for you, they're not learning about your products, because they're not taking things seriously. And that comes back to how much value the employer is putting into the employees.

So I completely agree with you that that needs to be fixed. And the thing is, we're building all these tools to make things as automated as possible for the employers. There's definitely money that's being saved there. And a simple reinvestment into your people could make that customer experience so much better.

Acumatica's Shopify news - retailers need a business platform, not a storefront

So let's get back to that Shopify news. With so many B2B companies pushing into B2C, they need e-commerce options. With its Retail Commerce Edition, Acumatica supports multiple options, including BigCommerce, Amazon, and the now-enhanced Shopify integration - which enables Acumatica customers to support B2B and DTC (direct to consumer) stores on one platform. So is this a milestone announcement for Acumatica? Fischer:

When COVID hit, the world changed. All of a sudden, everybody wanted to sell online. So we got thrown into that fire, which obviously was a good opportunity for us. What we're seeing now is, in a matter of two years, the entire retail market has changed... Consumers have become so accustomed to the ease of buying products that it's now the new norm.

Tools like Shopify can make it easy to sell online, but the merchant faces another problem: how do I scale this? Acumatica realized it needed to address that entire scope:

In the beginning, they're selling out of their garage, or out of their spare bedroom. Next thing you know, they're a 10, 20, or $30 million brand. These are people who don't have a background in supply chain; they don't understand distribution. They understand their product, or whatever their focus is.

Now they're omni-channel sellers,  trying to figure out, 'How do I organize this business into something that can actually scale?' They need a fundamental business management solution.

Welcome to cloud ERP:

Many of these brands, especially the smaller digital native brands, don't even know about ERP. I have to define the acronym for a lot of people. And then, when they hear that term, they're thinking of these really large businesses.

These digital native brands are starting to recognize the importance of having this software - and they're not tolerant of software they can't use themselves. They have to have their hands on it; it has to have tools that they can adjust. They don't want to call a partner and ask for help. They want to partner for consultation and advice. And then the omni-channel brands are selling in 12, 15, 20 different marketplaces or stores, and all these orders are starting to flood them. They need a way to organize  their back office. We're attracting more of those kinds of organizations.

Supporting multiple commerce engines can be tricky, but customers need choice:

We have this great relationship with Shopify, and a great relationship with BigCommerce. It's a balancing act sometimes, making both of them happy, and now we're working with Amazon. Same thing. Through those deep partnerships, we're working with their product teams, understanding the trends they're seeing, understanding what the market looks like, and then we're building alongside them. That's what the press release about this B2B integration is all about. We spent about a year and a half on Shopify on that.

Retailers are re-inventing storefronts

We hit one more topic I don't want to miss: the revenge of the store. Because I don't believe it's the revenge of the store - it's the potential of the redefined store. I told Fischer about how I almost (stupidly) bought a Nespresso machine, something I definitely don't need, at an NRF store tour. Nespresso is serving up piping fresh coffee from their machines. Before long, I'm kicking tires. Yes, the over-used "experience" buzzword comes into play here, but the point is, things are changing. Fischer shared a customer story, where the back-end and front-end come together:

Businesses running on cobbled solutions are just frustrated people. In general, nothing's ever accurate. Nothing's ever in sync. Whenever you show that one platform can replace six platforms, it makes the conversation so much easier financially.

There's been an increase in manufacturers opening up showrooms. Some of these are your typical manufacturers or distributors of building supplies, like granite or carpeting. But there's one particular customer we're working with, Clive Coffee, that's been outstanding.

Yep - very cool company. If I had one of their machines, I'd have turned into a coffee bean by now (see: The future of cloud ERP is vertical - Acumatica customers share proof points).

It's high-end coffee machines, and a really well-run business, mainly of younger people. In Portland, they opened up a showroom, so people could come in and try out the coffee machines. You wouldn't think of them as needing a POS system. I was surprised, but it worked out really well. I don't know if it's enough to say it's a trend. But I was surprised when I started looking at the numbers, of how many of these manufacturers were almost like pop-up stores.

My take - from storefronts to online aggregators

One weakness I see in omni-channel thinking: it doesn't take the transformation of the store far enough. But Fischer says that changes are coming:

Retail stores are going to turn into an experience and distribution center. Today, if you can buy everything you need on your phone, why do you have to go to a store? The way retailers are going to win people back is by creating experiences in those locations that pull people in.

I've read plenty of people that are theorizing what retail looks like in the future. One example I remember reading, which completely makes sense, is a retail location that feels like a restaurant, where everything you touch and see inside the restaurant is available for purchase. You can put the order in at the end of your meal. 'Do you like the  silverware that you're eating; do you like the wine glasses that you're using? They'll be shipped to your house next week.'

We could fill five blogs with the challenges retailers face in an inflationary, supply-chain-disruption environment. I believe industry-based cloud ERP can make a difference here. Try to integrate and analyze data from a proprietary set of retail systems, pull it into a finance system, and tack that into a distribution system. If that's your setup, have fun competing with the retail giants.

That said, all ERP retailers have work to do - the industry is changing too fast to think otherwise. Fischer told me about an interesting project underway. His team is working with a small group of customers to see how they can integrate a retailer presence on multiple marketplaces. "If you talk with ten different retailers, each of those ten is going to be interested in five or six different marketplaces," he explains.

So how can Acumatica make that happen? One option could be working with marketplace aggregators, such as Feedonomics:

So basically, your inventory - everything's inside of Acumatica. You're pushing it out to your e-commerce platform, that's pushing it out to Feedonomics. Then Feedonomics has 150 Different marketplaces that you can push those items to, and then orders flow back through Feedonomics, and back into Acumatica through the e-commerce system.

Fischer says they haven't decided yet if this will become a dedicated integration - it will depend on the results of these early customer tests. But it's one more example of the kind of forward-thinking automation retailers need, to help level the commerce playing field. I look forward to updating on what Fischer's team learns.

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