As an independent UK merchant you are probably using one of the following: an aging software system built for the industry, a generic accounts package with a “bit of order processing” or benefitting from a cutting edge, modern system built for today’s challenges and providing you with a competitive edge.
Whilst upgrading to these newer, purpose-built systems might seem costly and invasive, many UK Independent merchants are making the move and this blog explores the fundamental differences, benefits, and their reasons for doing so.
Merchants tend to replace their systems less frequently than other similar sized businesses. The average would be every 10 years but it’s not uncommon to find systems out there which are 20 years old (older than any other piece of capital equipment or essential tool within the business). These older systems are often referred to as legacy; whilst they work, they receive a decreasing level of research and development, upgrades, and reduced levels of support; all three pose a risk to your business as time marches on.
A lack of research and development (R&D) will inevitably lead to your system being less efficient, less automated, and less proactive than the one used by the merchant “down the road”. Theirs may automatically send SMS texts or emails to customers alerting them that their special order is in or that they are close to their credit limit; while yours may be reliant on staff to call the customer or waiting until the customer’s account is put on stop.
In a matter of minutes, the newer system may dynamically calculate stocking levels on a daily or weekly basis using trends, seasonality, and importance of that stock item to the business. Whereas you may be relying on a store person walking round the yard and trawling through sheets of sales analysis (probably once a month, if you are lucky) with the effect that your stock profile is far detached from the requirement (resulting in lost sales and overstocks).
Alert mechanisms are built into these cutting-edge computer systems which enable you to set rules which, when broken, dynamically notify you on your dashboard or by text and email as they happen (not at the month end when it is too late). These are available to all staff making the business as administratively efficient as possible and provides the very best tools to enforce your customer service levels.
The handful of features in the last 3 paragraphs (and there are so many more) would likely justify an upgrade to any independent merchant in terms of operational efficiency and customer retention. As important still is the lack of R&D in legacy systems that can pose a direct threat to your business. As the system ages it becomes less compatible with today’s hardware and operating systems opening you up to the risk of cyber-attacks (when did you last check your cyber insurance for exclusions?) or, at a more basic level, you just can’t get the spare parts, or the skill set when something serious goes wrong.
The generic systems (like Sage, Pegasus, etc) are designed for the mass market and not specifically for merchants. Whilst they do receive plenty of R&D and do a sterling job for the masses, they don’t fit a merchant well at a functional level, unless significantly modified or bolted to third party add-ones. Typically, they won’t handle rebates, timber tallies, haggling, directs and back to backs, trade counter type processing with refunds and exchanges leading to a slower experience for the customer at the trade counter. With features such as the stock profiling, as above, resulting in a number of manual sub systems to compensate a “square peg in a round hole”.
When we install systems, it is typically a 50/50 split between customers coming from legacy systems and those coming from the generic systems. The reaction from the former is that the core functionality that we provide matches well with what they would expect from a genuine merchant system but they soak up the technology, like a sponge, to put efficiencies in place where they never could before. Suddenly they are provided with a system which not only does what it says on the tin for merchants but they can adapt and flex their system (without our help in most cases) to combat new challenges and fine tune their business in these competitive times.
Those using generic systems pretty much assume that the new system will have the same or better technology than the one that they are moving from, that it looks and behaves as a modern system should but are spoilt for choice when it comes to all the new merchant specific features that they have access to.
Invariably, in both cases the customer goes live with the new system with the core functionality and then continually look to adopt new features or apply the modern technology on a continual basis; ever more efficient, ever more customer focused. They are safe in the knowledge that their upgrades are applied frequently, and their system is both secure and well supported.
Today, if your company is not in the position to adopt a truly modern, purpose-built merchants’ system you should be aware of what they can do, as when faced with a systems issue or competitive threat in the future you will know what can be done to combat it.