Four Business-Critical Issues in Retail to Solve with Application Integration Middleware

Olga Annenko know-how 0 Comments

Application Integration for Retail

When it comes to retail (and eCommerce), it is no secret that this industry is experiencing some pretty exciting but challenging times. We all know the questions any retailer asks themselves, as these are, actually, not that particularly unique to the retail business:

  • How to optimise customer satisfaction and increase customer retention?
  • How to lower my operating costs so that IT can focus on strategic initiatives that really impact my business?
  • How to find that one competitive advantage that will help me strengthen my market position and generate more revenue?

These challenges have been talked through over and over again, and there is no need for me to put my two cents worth in too.  

Instead, I would rather address with this article the challenges that retail companies face due to inefficient application integration. There are, in fact, four major issues common to many retail businesses that I would like to highlight. In addition to that, I will suggest some possible integration scenarios that can help solve these issues and show how exactly these solutions will likely help retailers deal with other challenges, which seemingly have little to do with application integration per se.

Issue #1: High Dependency on Manual Processes

Manual processes are time-consuming, error-prone, require many resources, and are a bad fit when a retail business is growing and needs to scale. And yet, astonishingly, many retailers still handle a good amount of business-critical operations manually.

The range of cases is endless: Some use manual processes for taking orders, verifying deliveries, and updating orders as soon as they have been fulfilled. Others “go manual” for payment processing and necessary order changes like cancelling items that should no longer be fulfilled.

Yet some retailers are basically forced to handle certain processes, e.g. fulfilment, manually, because their supply chain partners or 3PL warehouse have different EDI file standards that cannot be dynamically mapped and automated.

Another common scenario is when a retailer is using multiple components to manage various customer and business-related processes, which sometimes happens when a company manages more than one business models. An example would be a company that on the one side, sells dietary supplements for weight loss and on the other side, features a team of medical specialists who provide healthcare services to individuals with weight issues. In this case, when it comes to streamlining data, the staff is forced to re-key data between different components manually. Plus multiple databases have to be checked in case a complete overview of a customer’s interaction history is needed.

Integration scenarios for reducing manual work

When speaking about automation of order processing, a good solution would be to create automatic data mapping from order management system (such as Shopatron, Unicommerce, or Orderhive) to inventory, shipping, and/or warehouse management systems of suppliers and distributors. This will help retailers at the very least increase the capacity to process those orders.

In addition to that, one could automate invoice generation and delivery to all internal as well as external suppliers, partners and customers.

In order for fast-growing companies to be able to effectively manage inventory of products, a good solution would be connecting their order fulfilment management systems like the ones from NetSuite or Sage with warehouse management system of their choice, especially if they use 3PL warehouse. This will ensure that a product won’t be out of stock when least expected.

In general, connecting customer, warehouse, order and logistics management solutions (just to name a few), eliminates the need to re-key data over and over again, thus considerably decreasing manual work. This, in turn, frees both IT and non-IT to actually focus on the business development rather than on pure business maintenance.

iPaaS enables retailers to greatly reduce manual work, thus improving operational efficiency.Click To Tweet

Why implementing a standardised application integration middleware

An important thing to consider at this point is different data formats to juggle with. EDI interface is still a pretty much common solution for data exchange in retail, even though it is very tedious, expensive in terms of resources consumption and quite error-prone.

More lightweight modern solutions for retail will offer API for integration, but retailers will very likely have to deal with both when connecting order management systems with warehouse, fulfilment management, and databases.

In order to decrease or completely eliminate excessive manual work, it makes sense to automate a number of business-critical processes through a standardised integration middleware like iPaaS, as opposed to doing this with point-to-point integrations. In addition to its (default) integration capability, such a standardised integration middleware provides an easy way to translate various data formats between applications, systems and databases, including both APIs and EDI.

Issue #2: Too Many Efforts to Gain a for 360° Customer View

It is hardly debatable that customer data is crucial to retail business success. The more of it you have, the better you can optimise new product recommendations, marketing campaigns, buying incentives, – simply to name a few opportunities.

But just having customer data and having it all in one place makes a huge difference in timely reactions, operations efficiency and eventually, in customer retention.

Integration scenario for gaining 360° customer view

In order to effectively manage customer relationships, one of the most crucial integrations is the one between your ERP solution, such as Dynamics NAV or SAP Business ByDesign, and CRM solution, such as Dynamics CRM, SugarCRM or Salesforce.

This enables retailers to get access to all business activity including the most recent one, improving customer care and making it easy to adjust interaction with customers based on their past shopping history.

Additionally, it makes sense to integrate solutions like MailChimp or Mailjet for better and more streamlined marketing efforts.

An application integration middleware makes it for retailers easier to gain 360° customer viewClick To Tweet

Why implementing a standardised application integration middleware

Gaining a 360° customer view is a very complex matter. As indicated above, connecting ERP and CRM is already a good start, but it is only a start. Eventually, you will need to add more and more systems and platforms, like social media platforms and website analytics.

The complexity of such integration will be huge and extremely challenging for effective maintenance. Let alone the fact that adding more and more “points” will result in costs increase and long project implementation cycles.

The benefit of a standardised application integration middleware is that it comes with pre-configured integration connectors to multiple applications, databases, platforms and systems. These usually act as templates that are basically ready for immediate implementation but can be easily modified and adjusted if necessary.

Additionally, quite a number of such application integration middleware offerings give developers self-service tools to build their own connectors to homegrown or yet missing systems. Plus it provides a dashboard for consistent monitoring of integration flows.

All this makes adding as well as maintaining new “integration points” considerably easier, less resources- and time-consuming.

Issue #3: Difficulties to Scale

It is a common scenario for many retail businesses: They start small and don’t need many systems to handle e.g. order processing, fulfilment and/or delivery. But with the increase in delivery volume or in the case of rapid expansion, they are suddenly faced with the problem of handling high delivery volumes or managing multiple delivery locations and/or points-of-sale. 

We have already mentioned that excessive manual work seriously impedes retail companies’ ability to scale their business. But with the scenarios described above, the reason why scaling can become difficult lies in the sudden surge of locations that need to be monitored and maintained all at the same time, which requires many resources and often leads to increase in errors. Additionally, sometimes the applications and systems that used to be a great fit just don’t scale together with the business.

iPaaS allows retailers to easily scale their business when needed.Click To Tweet

Integration scenario for scaling business

If your business is stuck with an application or system that cannot handle high transaction volumes, for example, a supply chain platform, you will most likely decide to replace it. The most obvious integration scenario here would be swapping it for another similar application that does scale, and then as a next step, integrating it with the existing IT estate. 

If you’re struggling with the scale because of the increased number of delivery locations and/or points-of-sale, one of the likely integration scenarios would be connecting your own warehouse management system to shipping, inventory and warehouse management systems at delivery locations and POS, and then to order management system. This way, orders will go from warehouse straight to POS, and from there back to order management, allowing to handle delivery more efficiently and within shorter time frame.

Why implementing a standardised application integration middleware

In the case of the first example, when an unscalable application and system needs to go, integrating its successor with all existing applications and systems can likely become a nightmare, both in terms of its complexity and costs. When you use an application integration platform, you can considerably facilitate this process because:

  1. You will have a set of ready-to-use connectors to most mainstream retail applications,
  2. You’ll have the tools to build connectors to missing applications within a few days and not weeks as it is usually the case, and
  3.  All connectors are independent of each other, e.g. there is no hard-coded point-to-point integration, which makes interconnecting 3 or more systems much easier. Plus it allows replacing other applications if needed in the future with considerably less development effort

The third point is also especially true for the second scenario described above, when you get more and more systems and applications to monitor and more business processes to maintain. Additionally, a good integration middleware provides a dashboard from which you can monitor and maintain all the integrations, regardless of how many of them you have up and running.

By the way, when speaking of scaling, it is, of course, important to pay attention that such an integration middleware is not only scalable but also delivers high performance with low latency to enable fast data transaction.

Issue #4: Unsatisfactory Speed of Delivery and Order Management

There are several ways to become a retailer of the year and smash the competition, and ensuring fast delivery is one the most desirable, and yet difficult to fulfil. The keyword here is real-time.

Either due to excessive manual processes (which has already been discussed earlier) or inefficient data transfer between web stores and other systems involved, orders can be delayed by an hour in the best case scenario, and by a day in the worst one.

Integration scenario for faster delivery and better order management

In order to ensure faster delivery, first thing that needs to be tackled is real-time integration between your own web store (for example, built on Magento, Shopware or commercetools), third-party web stores like Amazon, Etsy or eBay if it’s your case, and an ERP system (NetSuite, Sage, SAP ByDesign, and Co). Thanks to such integration, every new order placed on a website will appear in your order and fulfilment management system only a few seconds after it was placed on a website. But this is not all.

To be able to safely promise your customers that their order will be shipped on the same day if the order is made, say, by 5PM, you will need to take care of real-time integration from the ERP (or directly from the web store) to a warehouse and logistics partner systems, no matter whether you ship by UPS, DHL, or FedEx.

This is one part, which concerns faster delivery. In order to have effective order management in place too, you will need to additionally integrate your inventory system, and possibly your supply chain partners. This will help you automate and streamline inventory adjustments, shipment status notifications, even manage fulfilment across multiple locations if that’s your case.

Retailers can greatly improve delivery time and customer experience by using iPaaSClick To Tweet

Why implementing a standardised application integration middleware

This is bound to be a very complex integration bundle that will be tricky to efficiently maintain with in-house point-to-point integrations. The major benefit of a standardized application integration middleware in this scenario is not even the easiness with which systems can be “plugged in” and “plugged out”. It is rather its capability to provide a complete overview of the status of your integrations, when they run, how many items have been processed, and what exactly went wrong in case an order hasn’t been processed properly.

Conclusion

The ultimate benefit of standardised application integration and integration middleware is not only automated retail-related processes. In the end, with less manual work, faster delivery, better customer and order management, you as a retailer can help your IT considerably streamline many operating processes, eventually reducing their operating costs. In addition, you’ll be able to deliver extraordinary customer experience, which is ultimately what any retail business lives on.


About the Author

Olga Annenko

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Olga Annenko is a tech enthusiast and marketing professional. She loves to write about data and application integration, API economy, cloud technology, and how all that can be combined to drive companies' digital transformation.


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