According to Forbes, while 21% of retail purchases in 2023 will be made online, this figure will shoot up to over 24% by 2026 alone. With the global eCommerce market valued at $6.3 trillion, optimizing eCommerce processes through advanced digital and automation tools is critical.
Some concerns that eCommerce retailers face include cart abandonments, technical problems such as malfunctioning applications and websites, and supply chain issues. In addition, eCommerce units also have to deal with fraud, which amounted to $41 billion in losses in 2022 and is expected to shoot up to $48 billion in 2023. In short, while retail sales will mostly go online in the coming years, technology is needed to address various issues plaguing retail businesses.
An enterprise resource planning (ERP) solution designed for eCommerce businesses addresses all the problems retailers face while helping them implement omnichannel strategies, leading to increased revenues and improved bottom-line figures.
This article examines ERP eCommerce integration, its features, and its benefits.
What is an eCommerce ERP integration?
An ERP is a complex software solution that allows organizations to automate and streamline various business processes ranging from finance, inventory management, Human Resources, customer relationship management (CRM), sales and marketing, etc. While ERP tools are used by various organizations, from governmental agencies to manufacturers and retailers, eCommerce-specific ERP solutions focus more on product and catalog management, order fulfillment, supply chain logistics, and other related functions.
ECommerce businesses often use eCommerce platforms such as Shopify, Magento, WooCommerce, and others to sell products on websites and mobile applications. However, eCommerce platforms do not offer ERP features. Hence, it is pertinent to integrate your eCommerce platform with an ERP.
An eCommerce ERP solution ensures seamless synchronization and data flow, improving efficiency, enabling real-time updates, and eliminating silos.
How does eCommerce ERP work?
ECommerce platforms such as Magento, Shopify, and BigCommerce help sell products via web and mobile interfaces and provide basic backend features. These differ from a full-fledged eCommerce ERP solution that bridges the gap between front-end and back-end processes. Nevertheless, there is a strong relationship between eCommerce platforms and ERP.
Integrating a retail ERP with your eCommerce platform helps unify data and streamline various processes efficiently. Most importantly, ERP eCommerce integration is simple and quick.
To connect your eCommerce platform with a retail ERP, you need to consider the following points:
● If your ERP system is cloud-based and delivered via SaaS, contact your vendor for clear instructions on integrating it with your eCommerce platform. Integration may require more effort and time if your ERP is on-premise or uses a hybrid approach, with some modules on the cloud and others on-premise.
● You can establish a direct connection between modules of an ERP and your eCommerce platform using a point-to-point method.
However, the downside of this method is that you will not be able to scale or rapidly customize existing ERP modules.
● An enterprise service bus (ESB) makes things simple, a central hub connecting different applications by acting as middleware.
● You can also use an integration platform as a service (IPaaS) or a third-party integrator to connect your ERP and eCommerce platforms.
Before integrating your data, deciding whether to do it in real-time or periodically in batches is important. Regardless of your chosen method, cleaning and structuring your data is essential prior to integration. Priority offers an integrated eCommerce management system to easily and quickly connect various eCommerce platforms with its ERP solution.
Benefits of eCommerce and ERP integration
There are several business and operational benefits of integrating ERP with eCommerce platforms. Let's discuss the key benefits of e-commerce ERP integration.
Enhanced Data consolidation
A quintessential concern of modern use of technology is data being stored in silos, resulting from using multiple software programs for different operations. Unfortunately, this results in data duplication, human errors, and a lack of synchronicity across channels. Integrating ERP with an eCommerce platform ensures all back-end processes are in sync with front-end operations and provides access to a single, consolidated, and constantly updated data library across different modules.
Improved inventory management
Understocking and overstocking can lead to customer dissatisfaction and attrition. Retail businesses with eCommerce operations often require support in efficiently fulfilling orders, particularly during sudden increases in demand. Integrating the eCommerce platform with ERP allows your back-end teams to monitor all order requests and ensure timely replenishment, improving inventory management KPIs.
Streamlined order processing
One of the biggest challenges in eCommerce management is a high shopping cart abandonment rate. Not addressing this particular order management KPI results in lower average order value (AOV) and increased cost per order and shipping fees. Integrating your eCommerce platform with an ERP helps ensure that your order fill rate remains manageable with steady replenishment based on real-time and historical data insights, helping you streamline your entire order-processing workflow.
Improved customer relationship management
Access to real-time data across all departments is crucial for true omnichannel commerce. This is only possible when you integrate your ERP and eCommerce platforms so that backend teams can process orders quickly while support teams can address customer issues. As ERP eCommerce integration results in a single but continuously updated dataset, support staff across channels can access updated customer interactions and conversations. This helps everyone work in unison to deliver better customer support and execute better customer relationship management.
Reduced operational costs
Accessing real-time information from multiple sources ensures timely order fulfillment and eliminates product wastage, shipment delays, and order mismanagement.
Key features of an integrated eCommerce ERP
After deciding to integrate your eCommerce platform with ERP, ensure that your integration includes these key features:
Omnichannel commerce
Omnichannel retail operations allow customers to purchase products, seek support anytime, anywhere, and return products through multiple channels. This is achieved by integrating e-commerce platforms with sales, marketing, CRM, inventory management, and shipping and delivery modules.
CRM
Integrating your eCommerce platform with ERP is essential to ensure better customer relationship management. This includes providing support and implementing loyalty programs, ensuring customers can redeem their points while purchasing online, and rectifying any issues arising from these processes. An efficient integration ensures an ERP CRM module is closely woven into the eCommerce platform.
Financial management
Integrating ERP with eCommerce platforms allows for improved financial management, including tracking receipts, invoices, and orders. With all financial data stored in a single database, insights can be gained for spending less, finding the best suppliers, and selling products at a profit.
Inventory control
Integrating ERP and eCommerce systems can significantly improve inventory management, which in turn can help businesses achieve a successful omnichannel strategy. This seamless integration enables timely replenishment of stocks, more efficient use of warehouse space, streamlined order fulfillment, and the identification of opportunities to restock items running low. With this integration, businesses can optimize their inventory control and ensure that their products are always available to their customers.
Shipping & logistics
It is common for customers to keep a close eye on the status of their order through online channels. It is highly recommended to incorporate shipping and logistics functionalities into your eCommerce platform to facilitate this process. This will provide customers with real-time updates on their orders and shipping status. Additionally, if a customer misses a delivery, sending reminders through their preferred communication channel is a good idea to ensure a smooth delivery experience.
Supply chain management
Efficient supply chain management is crucial for eCommerce success. Integrating eCommerce and ERP ensures sufficient stock at nearby warehouses, reducing delivery time and shipping costs.
Integrate your eCommerce platforms with ERP for enhanced efficiency.
Integrating an ERP system with eCommerce platforms offers many benefits, such as consolidating data, improving inventory management, enhancing customer relationships, and reducing operational costs. Connecting all suitable ERP modules with your eCommerce platform is crucial to ensure the smooth flow of real-time data.
If you are in doubt, speak to your ERP vendor to ensure that the integration enhances omnichannel operations and improves other processes such as CRM, shipping and logistics, and supply chain management. Priority's retail ERP is a holistic solution for eCommerce businesses that can easily connect with platforms like Magento, WooCommerce, Shopify, etc.
Priority supports your data management during and after eCommerce ERP integration. Don't hesitate to contact us with any questions or concerns.
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