Back Office Outsourcing Solutions for the Retail Sector

by | Last updated Dec 27, 2023 | Published on Jun 27, 2022 | Back Office Outsourcing

Retailing has emerged as one of the most competitive and swiftly changing industries wherein new trends arise every single moment. Novel trends in business approach have made retailers handle many responsibilities and rely on back office outsourcing solutions to perform these tasks efficiently in a cost-effective manner. Technology has completely revolutionized the way companies run stores and customers shop. With online shopping trends, customers now expect an immediate solution, or they will simply move on to the next retailer. Retailers, on the other hand, have drastically changed their approach from offering goods without analyzing the market trends to basing all the merchandising and good assortment decisions on the needs and demands of consumers.

Outsourcing in the Retail Industry – Key Benefits

In simple terms, outsourcing is the process of hiring an external expert, agency, or business to provide goods or services as opposed to hiring someone to do the work in-house. The first step to outsourcing is to figure out which specific tasks are consuming the most of the time. Always consider outsourcing tasks that are – commonly delegated, cost-effective to outsource and simple for others to perform.

Today, retail companies are under tremendous pressure to run business based on challenging economic conditions and changing customer demands. The need to reduce costs, gain a competitive advantage and improve their connection with shoppers has forced many retailers to adopt back office outsourcing services as a strategic tool to meet these challenges. Even firms like Walmart and Best Buy that have traditionally avoided outsourcing have embraced it.

There are several benefits that outsourcing in retail industry can offer –

  • Provide multi-channel customer support – Todays, contact center is designed to support multiple communication channels like – phone, e-mail, live-chat and a variety of social media platforms – that consumers use. By handling multiple channels, the contact center becomes an extension of the retail or ecommerce business handling multiple customer queries across every available channel that customers use.
  • Better flexibility and scalability – Retail tends to be a seasonal industry with certain seasons (like Christmas) being extremely busy, while others are much slower or average. Outsourcing can provide additional support to retailers when they have extra workload. With outsourcing, retail executives do not have to choose between cost reduction or process improvements. As companies save more through outsourcing, they can reinvest resources toward processes that will position them towards growth and competitiveness.
  • Big data collection and analysis – Outsourcing provides clear metrics and real time analysis. This involves providing quick feedback on data like – questions related to a product, which items are selling more and which items are being returned more frequently. This type of data collection and analysis enables the retailer to make adjustments at specific points where required, like adding stock in anticipation of sales trends, or reducing prices to move items that are not selling well.
  • Enhance data security – Securing information and other related data about key business operations has become more challenging. Regardless of how advanced your technology is, hackers can ruin business operations by accessing important data and information. Managing your business with an outsourced support team can help prevent such activities and secure valuable business data. By outsourcing IT support, it is possible to bolster overall data security and reduce vulnerabilities.
  • Drive business process efficiencies – Generally, business process overhead tends to be high due to the nature of the retail industry. By using intelligent methodologies, a professional outsourcing partner can improve processes such as HR, IT and finance and accounting while bringing down costs and increasing productivity. By taking professional support to handle strenuous, repetitive, and time-consuming tasks like data entry, you can focus more on key business functions that drive revenue and growth.
  • Improved competitiveness – By outsourcing retail manufacturing, small retailers can compete with larger and more established firms. For instance, if inventory started overflowing for a retail firm, the company can outsource warehousing and distribution to a third-party logistics provider so that the in-house team could focus on managing growth and keep up with the changing, high demand.
  • Access to advanced technologies – Instead of investing a lot of money in new software and hardware, outsourcing back-office functions allows you to take advantage of the benefits without additional expenses. Reliable BPO companies will upgrade their infrastructure and technology as per industry standards, and thus serve their clients better.

Retail Industry – Which Activities to Outsource?

Running a retail business involves knowing a bit about the nature of business and doing a lot of – everything. A busy retailer in such cases can start delegating and outsourcing some of the tasks that are keeping them busy and away from growing their business. In retail, there are many tasks that can be outsourced. Here listed are a few tasks in retail business that can be outsourced –

  • Accounting – Typically, retail managers tend to spend a lot of time handling accounting tasks such as paying employees, keeping tax records, and filing tax returns. By using an outsourced accountant to handle these tasks, retailers can free up time spent doing book-keeping. This, in addition will increase accuracy in accounting. However, when outsourcing an accounting firm or individual, make sure that they are accredited and have solid experience in the retail field with good reviews.
  • Marketing – Advertising a retail company can take up a lot of time and energy. Outsourcing to a top marketing agency can help promote your business in the right manner. This includes areas like web development, SEO, social media marketing, graphic design, email marketing and paper marketing. In some cases, retail managers tend to take up roles like – social media marketing and email marketing on their own so that they can maintain a personal tone (particularly, if it’s an independent business). However, tasks like web design, SEO and graphic design can yield better results if they are placed in the hands of experts. Hiring a reputable back office outsourcing company can help generate better leads and maintain brand consistency.
  • Warehousing and Delivery – Often, warehousing and delivery is a task outsourced by many retail stores. Spending more time on handling and packing boxes, printing labels and shipping orders can be challenging. Outsourcing warehousing and fulfillment is an effective way to grow the business without increasing the burden on the retail team. By outsourcing these tasks, retailers can better utilize their time and effort on marketing, sales, and other important aspects of a business. A reputable and reliable warehousing and fulfillment partner will store goods, quickly ship out orders as they come in, and even manage returns.
  • IT Maintenance and Development – Many modern retail stores are heavily dependent on working digital software or a working ecommerce site. However, broken IT equipment can cost time, money, and potentially customers. In most cases, fixing bugs and maintaining applications requires specialist expertise, which is why it’s worth outsourcing to an IT company. If a company has their own retail software or paid for a custom-built retail website, the developers of this software/website will likely be able to maintain it for you. This may involve an ongoing fee (in the case of website maintenance). It could also be worth having a local IT technician on call to fix IT problems and possibly give advice on improving the digital infrastructure. However, make sure to check reviews and assess credentials when hiring IT technicians.
  • Administration Tasks – Outsourcing administrative tasks is an effective way for any retail business to free up resources and time. Virtual assistants (VA) can help with all your day-to-day office needs. Depending on specific needs, a VA can help with emails, light marketing work (deploying email or social media campaigns), blog/website management, HR, managing payroll, and many other tasks.

When it comes to security, order management, and seamless customer experience, retail companies require a great deal of support. Back office outsourcing is a great way to find the time and resources to focus on big-picture issues in the retail business, and also free up time for a healthy work-life balance.

By hiring the services of a reputable back office outsourcing company, retailer client companies can focus on their core business activities. Such professional providers have adequate industry expertise with in-depth process knowledge, and the use of advanced technologies to organize and efficiently handle their client’s back office processes.

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