The existing economic uncertainty has impacted the retail sector to a large extend with retail sales hitting a low world over. In U.S., the retail sales during holiday season grew only by 4 percent which is 6.5 percent lower than that of 2011. In U.K., the retail expenditure for 2012 was a mere 1.2 percent. This has been the lowest for U.K. in 40 years.
With the economic melt-down and increased retail hurdles, the industry has been undergoing several organizational and operational changes, with many retailers opting for outsourcing in retail.
Challenges faced by retail industry
Retail hurdles are on the increase due to market saturation, increased multi-channel purchases, high operating expenses, decreasing customer loyalty, less disposable income for buyers and rising influence on purchasing decisions by digital media. Some of the challenges faced by the industry are:
- Supply chain risk management
- Increased overheads
- Shipping and logistics
- Focus on analytics
- Digital transformation
- Growth of E-retail
- Increased globalization and market saturation
- Pressure on margins
Outsourcing in retail
Retailers in U.S. and U.K have risen to the occasion by focusing on new strategies to overcome the economic slump. These companies have started relying on BPO/BPM and analytics to find solutions to their retail problems. Outsourcing in retail has the following benefits.
- The services offered by the outsourcing providers will include processes which will bring down losses, utilize available resources efficiently and link risks with the strategic goals.
- Service providers in shipping and logistics and retail will have adequate technology and domain expertise to tackle issues and complex systems and reduce inaccuracies in those areas.
- BPM/BPO companies have domain experts who help retailers formulate as well as execute intelligent business strategies through a vertical approach.
- Outsourcing companies will be able to garner sufficient data which will be useful for retailers to get accurate insight so as to take the right decisions to improve business outcomes.
- Relying on outsourcing companies is useful for tackling issues like online fraud by using the advanced technology and skill-set of the outsourcing companies.
- Retailers will be able to impart a personalized shopping experience to the customers and will be able to reach them through multiple channels, with the help of outsourcing services providers.
- Retail companies can rationalize costs, implement efficient processes and have access to smart methodologies by partnering with analytics and BPM/BPO solutions providers.
On partnering with the right outsourcing services provider, retailers have a lot to gain. The benefits are not only in terms of tactical gains, but also winning strategies that will propel the growth of the companies during economic turbulence.