Survey finds that neglecting tech investment could cost retailers $300,000 this holiday season.
Neglecting appropriate tech investment could cost mid-market retailers and wholesalers big money this holiday season, even as they hire more staff and add more inventory to help them cope with peak holiday demand, according to a survey conducted by Brightpearl, a provider of retail management systems. The research found that omnichannel retailers are at risk of negative customer experiences and an inability to fulfill orders or meet increased demands without proper investment in process automation and efficient business operations.
Key findings from the survey of more than 350 senior retail decision makers included:
Over half (53 percent) believe they can remain competitive by simply hiring extra staff, while 40 percent said they would increase inventory significantly to cope with peak periods.
58 percent of retailer and wholesale decision makers currently invest in technology to manage sales spikes, although barely more than a third of those surveyed (35 percent) said they are 'very likely' to adopt a new technology solution that would help to effectively streamline their back-office and inventory processes.
“These findings highlight how many retailers neglect to invest in technology that could save precious time and money during their busiest season,” explained Derek O’Carroll, CEO at Brightpearl. “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.”
On average, the study found, retailers can spend up to $312,816 in wages alone on holiday hires, not including taxes, training costs, costs incurred from mistakes by inexperienced workers, and extended work hours for existing staff.
Brian Wilkin, co-founder, DUDE Products, Inc., manufacturer of personal hygiene products, says that retailers need to learn from their past mistakes and look forward to technology solutions to these challenges. He said, "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."
O’Carroll concluded, “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.”