Retail WMS Buyers' Guide
Your customers want your products, and they want them right now. Can your warehouse deliver on that forced promise?
Retailers are being pulled in a million different directions with traditional channels competing against online ones, and your marketing and other segments are trying to figure out how to adjust. Unfortunately for you in the warehouse, you just have to be ready to do it all, whenever the customer wants.
If you’re not handling operations with a warehouse management system, or WMS, for retail efforts, then you could be spending too much time and money while potentially failing to meet deadlines and order requirements.
So, we put together this guide to help you understand:
- How to determine retail WMS requirements
- Features available in WMS retail packages
- Thoughts on how software can help you balance online and brick-and-mortar channels
- Where to start with cost estimates
- A few retail WMS vendors to consider
We hope you find this useful and starts you on a journey to getting a top-quality WMS in the retail industry.
How should you determine your retail WMS requirements?
To generate a list of features that your WMS needs, we recommend starting with a breakdown of your existing processes, partners, and mapping out where orders originate. Retail businesses have tentacles in a broad set of industries and spaces, so your WMS needs to be able to support each arm.
Consider the processes you use to source or create your products too. Those different elements may enter your warehouse in a unique way compared to how you distribute final products. Or, if you’re looking at a digital model, you may want a focus on 3PL and other partners who do the heavy lifting for you.
Define your business processes and you’ll see a clear path towards defining a WMS that supports you.
Which retail WMS features do you need?
Core requirements and functionality
You may need real-time support for an omnichannel retail presence, or you could be selling through a single location, whether online or physical. The shifting digital landscape is bringing about a whole host of solutions, including some retail WMS specific to dropshipping, so take these suggestions as a starting point to get your motor going.
Here are a few features you will likely consider to be mission-critical:
- Bulk, pre-pack, and break-pack. Even if you’re just working on a warehouse management module that’s part of larger retail software, you should demand control over your inventory within a system. That means working with goods as they come to you in bulk, packaging and kitting them as you need, or breaking down packs when you have inventory and need to fill an order.
- Carrier integration. As you grow, you’ll be in a better position to negotiate with carriers to get special rates based on your volume. This conversation gets much easier if you’re integrated with carrier systems because you can show them your business and volume, plus automate purchasing based on zones or other information.
- Cycle and physical counting. Inventory counts need to happen regularly and occur in a variety of ways. Automating your inventory counting is a must, and can make your cycle counting more effective. Moving away from a manual process also means you’re less likely to have errors and face other challenges. Learn more about those and high value counts here.
- Directed putaway. It matters where you put your goods. Workflows and usage and allotment can all make a difference in your daily operations. Look for a cloud-based WMS that supports smart putaway of inventory with rules you define and algorithms that make suggestions for better locations per SKU and pallet.
- eCommerce integration. If you work online, you need a retail warehouse inventory management tool that integrates directly with your online carts and order creation features.
- Mobile device support. The retail warehouse is fast-paced, so you’ll want a system that can support a variety of devices all inputting at once. Quick, reliable barcode scanning for in and out of the warehouse is a must. Look for support at your peak levels.
- Multiple-location support. Not only do orders come from different locations, but they’re often filled from different locations for retailers. We suggest at least a basic support for multiple warehouse locations to help you have a system you can grow with over the years.
- Order consolidation. All your channels point to the same warehouse or fulfillment operation. So, they should be aligned and consolidated whenever possible. This can help you reduce your logistics costs as well as provide better management of your data and workforce.
- Real-time data. In some areas, a warehouse system won’t always need real-time data. However, this focus in a must for any WMS in retail. This level of insight allows you to best allocate inventory, workforce, and other assets to respond to your business needs.
- Receiving and returns. Returns; the downside of any retail operation. They happen, and unfortunately, they can happen more when your sales increase too. Plan for them by having a solution that makes it easy to receive shipments and process returns, putting them back into your inventory counts after being re-scanned and checked.
- Wave picking and distribution. If you’re working with wholesalers, you’re going to need to keep orders running regularly. One of the best methods to keep up with regular interval orders, as well as support new orders and smaller batches, is wave picking.
Advanced options for your retail WMS
Beyond some of the basics, there are a few features that you’ll want to look for specialized support in the retail space. Think of things like Lightspeed retail software and WMS integration, or connectivity with your other POS systems.
Some WMS in retail will have basic versions of these functions, like cross-docking, but there are ways to take this to the next level. Look for retail-specific assistance so you can best utilize the features.
- Preferred partner integrations. Some WMS in the retail space can integrate with your existing partners and channels. This might mean Amazon and eBay or ERP software, Shopify, shopping carts, and any custom tools you might use from partners.
- Cross-docking. If you’re in a fast-moving segment, such as FMCG, CPG, or fashion, you might need to start distributing goods as soon as you get them. Cross-docking from trailers or rail to your outbound can help you stay on-time with orders and reduce your storage requirements and costs. The retail difference is having a platform smart enough to manage this process with a wide range of order sources and destinations.
- EDI support. Electronic Data Interchange support can turn a bland WMS into a powerhouse. Support for this type of data usage allows computers and different programs to share information. In the warehouse space, this often means supporting more order, payment, analytics, and business process optimization tools. Advanced support means going beyond the common initial point of linking purchase orders to invoices.
- Front counter tools. If you have customer-facing staff in retail locations, or in your main office, you may want to look at options that allow them to interact directly with your warehouse. This can be sending order requests or starting the billing process from a terminal or computer. Or, you might want them to have clear visibility to see what rush orders can be fulfilled that day. It can be especially important if you’re a local-focused retailer and are considering using your existing fleet as a mobile warehouse for small orders.
- Incident tracking. Things happen. How you respond to them can protect your business or leave you at greater risk of an incident happening again. Consider a WMS in the retail industry to be another partner to protect your bottom line, by allowing you to identify and resolve issues quickly.
- Advanced automation. If you have the budget, try to get close to a full automation in your processes. Start with your ordering processes to see more immediate gains and improve your overall customer lifetime values. An end-to-end push will automate a variety of steps in order creation, inventory selection, and fulfillment.
- Predictive analytics. Nearly all retail spaces have their cycles. However, there might be other trends hiding in your data that take a smarter tool to uncover. Tools that support demand planning or better optimizing and staging of inventory can save you significantly on a year’s budget.
- Hybrid business model support. Flexibility might be the key to your future in the retail space. So, you might consider a retail WMS that’s designed to support in-store and online solutions as well as dedicated warehouses, storerooms that double as warehouses, or even mixing order completion between your operations and a 3PL or dropshipper.
Blending eCommerce with brick-and-mortar
While both eCommerce requirements and physical retail needs will show up in your functionality lists, we invite you to take a minute and think about the future of your operations and what warehouse needs will look like in the future.
While eCommerce was once thought of as a way to establish a customer base that you can eventually leverage into success on physical shelves, the balance is shifting. In many markets, brick-and-mortar operations are making significant efforts to get into as many online channels as possible. New sales are trending digital, and it can help reduce a variety of costs around your business.
So, if you’re in a market where digital is becoming competitive, then look for a WMS that can support you in five years, whether that means a jump to online sales or eventual growth into supporting retail partners who have several types and volumes of product orders.
The Amazon elephant
You knew we were going to discuss Amazon and its Fulfillment by Amazon (FBA) system that makes it easy for you to sell online through Amazon’s platform. The behemoth is adding hundreds of thousands of small and mid-size sales partners each year, giving your competition a short path to online sales.
In 2017, Amazon captured 4% of all U.S. retail sales and 44% of the eCommerce market.
Typically, FBA will operate completely separately from your own warehouse and your WMS. You’ll essentially be treating Amazon as a corporate customer who places specific restock orders when they sell enough product. It doesn’t have to change that much.
However, it can change your operations if you work heavily with the data that FBA provides. Amazon’s service has robust capture and informational analysis that you can use to refine your targeting and other online sales techniques. If you have a WMS that allows for demand forecasting based on datasets — including those you can input but aren’t tied to current warehouse operations — you might be able to uncover larger trends.
Finding a retail WMS that supports eCommerce and some Amazon integration may be your best path to staying viable in the near future.
How much does retail WMS cost?
Pricing for retail-specific warehouse software as well as general WMS software that integrates with retail websites is very difficult to pin down because costs vary dramatically.
You may end up with a system that costs a few thousand dollars to install and implement, then a few thousand more each year for your user fees, maintenance, and support. Or, you could end up spending more than $50,000 just on implementation because you’re operating across so many locations and channels.
Vendor pricing documentation that’s available online tends to be vague or only show you the lowest options — think “starting at $99 per user each year” — because they don’t want to scare off small retail outlets.
Here are a couple of rules of thumb to keep in mind:
- The more features you need, the more likely you are to see costs rise.
- Same goes for more users, locations, and channels.
- Perpetual licensing will look much more expensive at first, but in the long run, it might end up saving you more than a subscription license. It’s all about how well you pick and how long you stick with your platform.
- Subscription packages tend to rise in chunks of about $500 to $1,000 per year per facility as you move through more advanced tiers. However they may separate out some modules retailers need to increase their revenues for complex customers but keep things low for less sophisticated warehouses.
- Maintenance and support tend to be recurring costs, and sometimes they’re even added separately on subscription services.
Which retail WMS vendors should I consider?
Now the big money question: who do you start with when considering a WMS retail supply chain partner? It’s tough because WMS for retail is broad and varied, just like retailers. Here are a few different brands that will support you, however
The Oracle Retail Warehouse Management tool is designed to work with large retail operations and support very complex fulfillment. Out-of-the-box it provides a task management module with more than 100 rules for labor optimization, based on your users and equipment. It’s channel agnostic and supports fulfillment from a variety of fixed, in-store, and other warehouse setups.
Vin eRetail WMS
Vin eRetail WMS is a cloud-based system for companies supplying businesses and selling directly to customers. It’s a leader in the eCommerce side of things, so there’s plenty of integration with Amazon and other online stores. A nice note is that it gives smaller retailers a detailed set of tools, such as the ability to segregate out inventory for different clients.
Brightpearl aims to be a single platform for managing all your retail needs. It includes POS and CRM tools alongside traditional warehouse and fulfillment modules. The company aims to streamline your operations and integrate with all the partners you could use, including brands like MailChimp and Shopify.
On the B2B side of things is TradeGecko. It supports traditional and online retail, with integrations designed to support B2B brands and wholesalers. It can provide you with a good guide for a usable UI, especially if you operate across both B2B and B2C channels.
CentralBOS offers its retail WMS as part of a larger cloud ERP focused on warehouse management. So, you get tools designed to help manage workforce and inventory levels, track shipments and receipts, plus keep an eye on assets and logistics across multiple locations. The platform prioritizes real-time data with dashboards specific for common decisions warehouse managers face.
Those are just five of the warehouse inventory management systems available to retailers like you. The selection was chosen to represent a broad list of capabilities and supported sizes, so you can start piecing together what is right for you. For your next step, consider using a WMS requirements template to help you determine what to include in your WMS RFP.