What is Retail Software?

Key Components of Retail Software

Point of sale (POS) and eCommerce systems are the most commonly used forms of retail software, but many other tools are available. Let's look at some key software solutions used by retailers to run their businesses:

Point of Sale (POS) Systems

A point of sale (POS) system is used to accept in-person payments. Think of it as an enhanced version of a traditional cash register. POS systems can record transactions, take payments, and collect or track customer data.

For example, many brick-and-mortar retailers request that customers provide an email address or mobile phone number during the purchase process. These contact details are used to send out a digital receipt, but with the customer's consent, they can also be used to send discounts and marketing materials.

Integrating the POS with other systems, such as the CRM and inventory management system, can deliver detailed insights into customer preferences and purchasing trends, driving better decision-making.

Inventory Management

Today's inventory management software helps retailers keep track of current stock levels and flag items for restocking, and it can also automate the purchase process and schedule alerts for overstock issues. With real-time visibility into inventory, multichannel retailers can better manage their stock levels, benefiting from up to 1.5x higher inventory turns.

Retailers that sell a high volume of goods may benefit from advanced features to keep track of sourcing prices across multiple suppliers. By tracking prices and triggering purchases at specific price/stock levels, retailers can save time on manual inventory management and potentially reduce their inventory overheads.

Order Management Systems (OMS)

Order management systems track orders from placement to fulfilment, and provide visibility into each part of the order lifecycle. These tools can integrate with inventory management systems, customer relationship management systems, and vendor management tools to ensure the customer is kept up-to-date as the order is processed, inventory levels are properly updated, and any products sold are restocked if required.

Integrating more capable POS and order management systems can enable market-leading retailers to use their store networks as fulfilment hubs, cutting their last-mile costs by 31% and improving order fulfillment speed.

Customer Relationship Management (CRM)

Customer Relationship Management software helps retailers and other organizations keep track of customer interactions and data, send out marketing materials, and personalize marketing efforts. A CRM platform can also integrate with other retail software applications to track information about customer purchasing habits and preferences to help manage loyalty programs, recommend other items during site visits, and send out more personalized marketing offers.

According to a recent Accenture survey, 74% of shoppers have abandoned an online shopping cart in the last three months because they felt overwhelmed by the product choices available. Using consumer information to help provide curated product suggestions to improve customer retention.

eCommerce Platforms

eCommerce platforms provide a convenient way for customers to browse inventory and place orders. By integrating online storefronts with physical stores, retailers can offer  unified shopping experiences.

An omnichannel retail platform (that includes or integrates tightly with eCommerce capabilities) can unify digital and in-person experiences, allowing for things like network-wide inventory visibility, cross-channel returns, and holistic views of customer transactions across all touchpoints. This improves the customer experience and provides retailers with invaluable data about customer habits.

Vendor Management

Vendor management software helps retailers organize inventory, track product sources, and generate reports to assess supplier performance. For retailers who deal with multiple suppliers, vendor management tools can help reduce friction and ensure they get the best deal.

Retail software can also assist with other areas of vendor management, such as compliance and record-keeping. Retailers may need to consider legal, financial, and compliance requirements when working with third parties. Vendor management tools can alleviate some of those administrative challenges and make a complex process more efficient.

Marketing Automation

Using sales data and customer information pulled from the CRM platform, retailers can automate and personalize the delivery of marketing and promotional material. For example, online retailers can automatically send out reminders for abandoned carts, and service providers can send discounts or loyalty offers to customers identified as a churn risk.

AI-driven marketing tools are becoming increasingly common, and to make the most of these tools, retailers need access to enough customer data to provide personalized content and special offers. The more information retailers have available about their customers, the more granular the customer profiles they can build will be.

The core features listed above have been a part of retail software for many years and are the key features required for a scalable and reliable platform. Businesses wishing to offer seamless customer experiences across online and physical channels may benefit from a retail software solution with more advanced features, such as those outlined below.

Agentic AI Integration

The integration of Generative AI into the supply chain commerce sector is not just an emerging trend – it’s a game-changer. Chatbots are an increasingly popular AI investment in retail self-service thanks to their 24/7 responsiveness. But most retail chatbots are impersonal, rigid, and often struggle with complex requests—often leaving customers frustrated. Manhattan Active® Maven for customer service is different: it’s an Agentic AI assistant that delivers elevated experiences and elevates customer service productivity. You can learn more about how GenAI and its impact on retail from this informative ebook.

Endless Aisle

According to a recent consumer survey, 72% of shoppers still rely on physical stores as their primary shopping method. When a shopper walks into a store looking for a product, they want to be able to buy it immediately. Stockouts negatively impact the shopping experience and the shopper's goodwill toward that store.

The same survey found that 9% of consumers choose to buy nothing at all if a product is out of stock, while 37% opt to purchase an alternative product from a different brand. Leading retailers will do everything they can to satisfy needs while the customer is still in the store, rather than risking losing that sale to an online rival.

If a product is out of stock or available in another store, a retailer has a small window of opportunity to satisfy that customer, either by offering a similar alternative or a convenient way for them to buy the item. Endless aisle enables customers to purchase items that may not be available in a particular store, which helps retailers save the sale, reserve more shelf space for faster-moving products, and drive customer satisfaction.

Manhattan's endless aisle technology is optimized for omnichannel retailers. By exposing global inventory across all stores, distribution centers, and suppliers, store associates can access products a customer may be interested in and place delivery or pickup orders for that customer, helping retailers reduce potential lost revenue and negative customer experiences.

Supply Chain Planning and Execution

Demand forecasting is essential for avoiding stockouts and overstocks—but forecasting alone isn’t enough. True agility comes from unifying planning and execution.

Modern platforms like Manhattan Active® Supply Chain Planning go beyond collecting POS, eCommerce, and CRM data. They generate real-time forecasts, replenishment plans, and allocation strategies—then power execution from the same system.

By connecting planning with Warehouse, Labor, Transportation, and Yard Management, businesses eliminate silos and act on insights immediately. As demand shifts, the system auto-adjusts: re-slotting inventory, reallocating labor, rerouting shipments—no integration delays, no data disconnects.

Execution spans:

• Warehouse management
• Labor management
• Transportation management
• Yard management

Built on a cloud-native architecture, Manhattan Active ensures planning and execution share a single, real-time source of truth. Every decision—whether storage, staffing, or shipping—is informed by shared intelligence.

Unified Visibility, Automation, and Adaptability

Retailers gain visibility into the entire network:

• Inventory flow and availability
• Workforce productivity and requirements
• Fleet capacity, costs, and routing
• Yard and dock utilization

Built-in intelligence highlights risks, suggests actions, and automates repetitive decisions, ensuring issues are addressed before they escalate.

A Continuous Loop of Improvement

Operational outcomes—such as fulfillment accuracy, service levels, and transportation efficiency—feed back into planning, sharpening forecasts and improving responsiveness with each cycle.

By unifying all aspects of the supply chain, modern retail software helps retailers maintain optimum stock levels at all times and reduces the friction associated with logistics. These tools help retailers balance supply and demand and get better visibility into everything from fleet routes to facility utilization, fuel requirements, shift schedules, and holidays.

Managers can keep track of employee performance using sophisticated dashboards, set targets for fleets and drivers, and use gamified challenges to improve performance. Simulations and real-time data tracking help improve service levels while maintaining compliance and flag issues in the supply chain before they become a problem.

Warehouse Management Systems (WMS) and Transportation
Management Systems (TMS)

Warehouse management systems (WMS) help retailers and logistics companies receive, store, and ship inventory efficiently and cost-effectively. These solutions reduce labor costs, optimize warehouse space, and orchestrate the movement of goods from distribution centers to customers.

 Transportation management systems (TMS) address the broader logistics process, managing both inbound shipments from suppliers to distribution centers and outbound shipments to retail stores and malls. Manhattan Active TMS helps retailers and logistics providers reduce transportation costs, lower their carbon footprint, and improve delivery performance across the network.

Together, WMS and TMS solutions provide end-to-end visibility and control—from the moment inventory leaves the supplier to the moment it reaches the customer. Thanks to recent advances in supply chain technology, both retailers and consumers can track products at every stage of their journey. Real-time shipment tracking, delay mitigation, and route optimization help maximize delivery efficiency and service levels.

Switching from a legacy point of sale system or siloed eCommerce platform to a more unified and modern retail software solution can offer many benefits in terms of efficiency, visibility, and scalability, particularly when those applications are deployed through a versionless, API-first cloud model. The key benefits of modern retail software platforms are outlined below.

Improved Operational Efficiency

By streamlining and automating routine tasks, retailers can save time and money while elevating the customer experience. Modern retail software improves efficiency across several areas of a business.

Inventory Management

Modern retail software drives full visibility and connected intelligence, synchronizing inventory levels across the network and ensuring smooth shopping and fulfillment experiences all day, every day. Automating order fulfillment and inventory management ensures retailers are always prepared to satisfy their customers, even during peak shopping periods.

Warehouse and transportation management solutions help reduce issues with lost or missing deliveries. By providing detailed inventory management options and the ability to track stock through its entire lifecycle, companies benefit from more accurate data and records.

Purchases and Returns

From streamlining the checkout process to facilitating returns, retail software solutions can save associates time and improve customer satisfaction. For example, omnichannel retail solutions may support fast RFID scanning and mobile checkout capabilities, providing a streamlined in-store shopping experience. They may also offer consumers the option to order items from a different inventory location and have them delivered to their home.

Unified inventory and order databases mean retailers can accept returns at any store, so a consumer can purchase an item while on holiday and return it to a local branch. This customer-focused flexibility builds goodwill and improves customer satisfaction.

Better Staff Morale

Legacy retail systems are often slow, unreliable, or difficult to use. Training and onboarding staff on legacy systems and burdensome processes is time-consuming and expensive, and both the associate and customer experience suffer if things like returns and discounts are difficult to execute in-store.

Modern point of sale systems that are both intuitive and consistent across both fixed and mobile device types enable faster employee training and smoother workflows, whether tasks are routine or less common. By enabling quicker access to cart, customer, and catalog information, associates are in turn empowered to provide better customer experiences.

Simplified Compliance

Taxation and compliance can be challenging for businesses operating in multiple territories. Modern POS and eCommerce tools can be configured to calculate VAT and sales taxes for each geography, simplifying the fiscalization and localization process.

Cloud-based retail software can be automatically updated and more easily maintained to ensure percentages and calculations are always based on the most current tax laws, greatly simplifying the accounting process. Retailers can request a report each month or quarter and receive a breakdown of the totals for each tax category.

Enhanced Customer Experiences

Consumers are becoming increasingly sophisticated. Features that were once considered differentiators are now things consumers expect as commonplace. For retailers to impress customers, they must work even harder to provide a sophisticated digital experience.

A logical next step in digital transformation for many retailers is the incorporation of artificial intelligence into their operations and customer engagement solutions. Things like machine learning tools to help retailers provide automated, data-driven recommendations to customers or agentic AI that personalizes customer service interactions are becoming more and more common.

While the number and complexity of touchpoints increases, consumers still expect continuity and personalization when interacting with brands. Market-leading retail software solutions help simplify complexity, while serving as a single source of truth, bringing together information from all channels to help deliver seamless omnichannel experiences to customers.

Enhanced Inventory Control

Effective demand forecasting and inventory control can significantly affect a retailer's revenue. Leading retail software solutions offer the ability to dynamically adjust purchasing decisions to reduce overstocking or stockouts.

When inventory is turned over quickly, it insulates retailers against price fluctuations, which can significantly impact profits in some industries. Not only does this reduce waste and improve inventory turns, but it also improves customer satisfaction.

Data-Driven Decision-Making

Modern retail software solutions offer easy integration with analytics and reporting tools; many leading solutions now readily offer these integrations out of the box. These analytics and reporting tools are invaluable to retailers that seek to make agile, data-driven decisions, adapt quickly to changing consumer tastes, and more confidently respond to fluctuating market conditions.

Data insights can also be used to improve the customer experience by empowering associates to give better customer service. Mobile point of sale platforms put real-time information into the hands of associates, so they can resolve issues more quickly and make more effective decisions on the fly.

There are several factors to consider when choosing retail software, including those outlined below.

Scalability

A good retail software solution can support a business today and in the future. Does the chosen retail software platform support plans for new locations, the expansion of multichannel or omnichannel capabilities, or the implementation of agentic AI?

Scalability is also important for online retailers. Does the current eCommerce solution meet customer demand during peak periods or when running a major promotion? Can the platform provide all the features the business wants to offer? Consumers have come to see once sophisticated features such as AR or VR shopping experiences as the norm, so possessing the ability to deliver these features is essential.

Integration With Third-Party Solutions

Data silos are a significant challenge for any organization. Those relying on legacy applications should consider whether the retail software they plan on using can integrate with older systems and databases. It's also crucial to consider how easy it is to integrate the software with other popular applications, should workflows change in the future.

Modern retail software typically offers API integrations to support communication with related applications. It may also provide the ability to import and export data in standard formats for reporting, marketing, and other purposes.

User-Friendliness for Both Staff and Customers

Another important consideration is user-friendliness for staff and customers. Brick-and-mortar retailers often rely on part-time or seasonal workers and have a high staff turnover. Choosing a POS system with a simple learning curve reduces onboarding time, improves staff morale, and helps speed up transaction times in stores.

Ease of use is also paramount for online stores. Consumers expect a familiar, simple, and frictionless shopping experience. If the store is slow to load or difficult to use on a mobile device, they'll look elsewhere for the products they need. Modern retail software offers versatile features for branding so consumers can enjoy a familiar look-and-feel whether they're interacting with a company website or an in-store terminal.

Robust Customer Service and Regular Functional Updates

Consumers expect to be able to interact with their favorite brands at their convenience. Downtime isn't acceptable, and expectations for quick issue resolution have grown in recent years. When evaluating retail software, review the support policy:

• What options are there for contacting tech support?
• How long does it take to reply to a ticket?
• How many tickets are resolved on the first contact?
• What level of troubleshooting and advice can the support team offer?

Cloud-native solutions remove the burden of software maintenance, backups, and updates from the IT team, enabling them to focus on other aspects of the business. For these reasons, it’s important to select a cloud-based retail platform that provides regular updates via stable internet connections.

Another benefit of cloud-based solutions is the ability of developers to roll out regular security updates and feature updates without disrupting daily operations. Retailers who choose a cloud solution with regular updates benefit from access to the latest features and innovations, so they can always offer the highest level of customer service.

Retail Software Streamlines Your Business

Retail software can help modernize and streamline retail operations, delivering better customer experiences while improving efficiency and cutting costs. Omnichannel retailers can benefit from modern retail software that helps unify each aspect of the business, delivering cohesive omnichannel experiences.

The Manhattan Active® Platform is a microservices-based, cloud-native solution that delivers solutions for all aspects of retail, including:

• Order management
• Point of sale
• Store inventory and fulfilment
• Customer service management
• Digital self service
• Warehouse management
• Labor management
• Transportation management
• Demand forecasting

Thanks to the platform's powerful APIs and easy integration with third-party solutions, Manhattan Active enables retailers to streamline their operations and elevate customer experiences. Whether planning an entirely new retail software implementation or embarking on a gradual digital transformation, Manhattan can help.

Contact Manhattan today to learn how we help transform retail businesses.