Selecting the right technologies plays a pivotal role in facilitating connectivity, driving efficiencies and ensuring seamless operations as businesses scale and become more complex. Building the right eCommerce tech stack is an increasingly important consideration for ambitious online retailers, particularly when deciding whether an Enterprise Resource Planning (ERP) system is the right investment.
Simon Curd, Chief Product Officer at Linnworks, discusses what an ERP system is and why it may not be the best technology solution for ambitious online retailers.
What an eCommerce Tech Stack Should Include
An effective eCommerce tech stack should provide the flexibility to support growth without adding unnecessary complexity. Rather than relying on a single platform to manage every aspect of the business, many retailers benefit from integrating specialist solutions that work seamlessly together. Choosing the right technology mix can improve operational efficiency, enhance connectivity across sales channels and provide a stronger foundation for long-term eCommerce growth.
When Does a Retailer Need an ERP?
ERP systems are designed to help retailers make informed decisions, identify trends and respond quickly to changing market conditions, ultimately reducing costs and improving the customer experience. They also streamline communication between departments, enhancing collaboration and efficiency, particularly in areas such as HR and finance, where centralised data can simplify payroll, employee management and financial processes.
While the idea of having one system to run your entire business may sound attractive, an ERP system can create more problems than it solves for many retailers.
Determining the right time to implement an ERP can be challenging. While these systems offer clear advantages for large-scale enterprises, their complexity, cost and lack of flexibility can outweigh the benefits for smaller or fast-growing eCommerce businesses.
Typically, businesses begin considering ERP once they surpass a revenue threshold of $100 million or more, when more advanced financial reporting becomes essential. In many cases, it is the need to manage financial reporting beyond the capabilities of a dedicated accounting platform that drives ERP adoption. However, implementing an ERP system is not without significant risks.
Navigating the Risks: Is an ERP an Unnecessary Expense?
It is well known that implementing an ERP system is a lengthy and costly process, and one that rarely runs entirely smoothly.
The scale of an ERP project can limit a retailer’s ability to adapt its strategy after implementation. This lack of flexibility presents a challenge for online retailers operating in a fast-moving and often unpredictable market. According to Gartner, between 55% and 75% of ERP implementations fail, presenting a substantial level of risk. Even partial failures that require businesses to retain legacy systems can introduce additional complexity and create inconsistencies across the organisation.
Customisation is often essential to meet a business’s specific requirements, but it brings ongoing costs alongside the initial implementation and support fees. As a result, retailers also need the in-house expertise to manage both deployment and long-term maintenance effectively.
Building an Agile eCommerce Business
As retailers increasingly require more sophisticated reporting and operational tools, the cost and complexity of an ERP system can sometimes restrict rather than support growth. Implementing ERP too early may reduce a retailer’s ability to respond quickly to new opportunities because of its limited flexibility. In many cases, businesses find themselves returning to specialist systems, adding unnecessary layers of complexity while increasing costs and creating fragmented data.
Instead of adopting a one-size-fits-all approach, retailers should consider building an eCommerce tech stack using specialist solutions that are designed for their operational needs. Integrating platforms such as Shopify, BigCommerce or WooCommerce with purpose-built eCommerce software provides greater flexibility while supporting future growth.
With around 50% of online sales taking place through online marketplaces, specialist solutions also deliver deeper integration with platforms including Amazon, eBay and Walmart, while enabling retailers to connect quickly with emerging marketplaces and take advantage of new opportunities.
By combining best-in-class technologies from specialist providers, retailers can create a highly efficient and customisable technology ecosystem. This approach supports faster innovation, greater agility and easier adoption of new technologies without waiting for large-scale system upgrades.
Conclusion
For ambitious, high-growth retailers, committing to a lengthy ERP implementation programme may not always deliver the expected business benefits. Instead, investing in an agile eCommerce tech stack built around integrated specialist solutions provides a more flexible, lower-risk technology strategy that delivers immediate operational improvements while creating a strong foundation for sustainable long-term growth.
