Technology Ignorance Will Cost the Average Retailer More Than $300,000 this Holiday Season
The research reveals that omnichannel retailers risk poor customer experiences and inability to fulfill orders or meet increased demands due to lack of process automation, as well as reliance on inefficient business operations.
Key findings from the survey (conducted online in September and October 2017) of more than 350 senior retail decision makers, with retailers ranging in size from small to very large, include:
- Hiring & Store Hours – 53% of retail decision makers believe they can remain competitive by simply hiring extra staff, while 17% will extend opening hours
- Inventory – 40% of retailers will increase their inventory significantly to cope with peak periods (despite the potential for wasted resources);
- Technology – 35% of retail decision makers are ‘very likely’ to adopt a new technology solution that would help to effectively streamline their back-office and inventory processes; 58% of retailer and wholesale decision makers currently invest in technology to manage sales spikes.
Derek O’Carroll, CEO at Brightpearl, said, “These findings highlight how many retailers neglect to invest in technology that could save precious time and money during their busiest season. This doesn’t bode well for mid-sized retailers who find it challenging to compete with the likes of Amazon Prime – especially if they continue to ignore the operational advantages of technology. Short-term, inefficient solutions like hiring more staff or increasing inventory levels often end up hurting their bottom line.”
Respondents reported that, on average, they hire the equivalent of 98 full time additional seasonal staff to manage busy shopping periods. The top 50% hire approximately 190 holiday staff. Brightpearl researchers calculated the business costs of hiring 98 FTEs based on average minimum wage of $7.98 at 40 hours/week per hire. Retailers employing extra staff members to help during the 10-week holiday season running Thanksgiving through New Years can expect to spend, on average, an additional $312,816 (or $3,192/hire) in wages alone. This does not include taxes, the burden of training new staff, costs incurred from mistakes by inexperienced employees, and extended work hours for existing staff.
For the 2017 holiday shopping rush, retailers must start by examining any missteps from previous seasons and look to apply technology solutions to future strategies, urged Brian Wilkin, co-founder, DUDE Products, Inc., manufacturer of personal hygiene products. “It’s important that retailers have flexibility built into their DNA. It’s the only effective way to manage holiday demand and provide the level of customer experience shoppers expect.”
“We see a quarter of our sales, across online and brick-and-mortar retail stores, over the Holidays. During the 2016 season, retail management software enabled us to scale, abandoning spreadsheets for order processing and fulfillment via our warehouse. Smart cloud technology helped ensure adequate safety stock, sped order processing, automated Shopify downloads/real-time updates, and streamlined operations,” explained Wilkin. “In turn, we expect to fully optimize our 2017 holiday sales spike because we’ve built up an informed safety supply during Nov/Dec.”
Brightpearl customer research has found retail automation technology helps retailers save the equivalent of 57.5 days a year by eliminating time spent on repetitive administrative tasks. The likelihood of negative customer service because of human error has also been reduced by up to 65%.
O’Carroll, added, “Forward-thinking retailers need to make the most of this holiday season by using technology to refine back-office functions like processing, fulfillment, shipping and billing. Those who do will better manage increased demand and offer the level of service that customers expect.”
Retailers curious to find out more about their performance and understand just how much time they can save by automating their systems, should visit this new interactive tool, from Brightpearl. An Infographic with study findings is available at:
Brightpearl is a powerful-yet-simple retail management system that helps mid-sized retailers and wholesalers expand and compete with larger rivals by streamlining sales and supply chain functions across multiple online and offline channels. Brightpearl’s cloud-based software and services enable omnichannel merchants to manage the heart of their business by combining purchasing, inventory management, CRM, order processing, accounting, fulfillment, and reporting into a single reliable system. Founded in 2008 with offices in the U.S. and UK, Brightpearl is used by more than 1,200 merchants around the world.
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