The holidays are a time when we think of retailers raking in the cash while consumers spend it. While the latter part of this statement is true, the former is not as true as it could be according to a survey released by Brightpearl. Although retailers see a peak in spending and sales during the holidays, they are also losing or wasting money by not taking advantage of technology to its fullest.
Brightpearl, which provides retail management systems, found that retailers are mostly ignorant of the best ways to streamline business processes during the holidays (and anytime for that matter) which results in a loss of revenue. Derek O’Carroll, CEO at Brightpearl said,
“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.”
Although companies like Brightpearl tout the many advantages of automation, the survey found that those in retail management positions still cling to old-fashioned methods as a means to prepare for the peak holiday rush. The survey asked respondents about their business operations during the holidays and these were three key findings:
Firstly, over half of the retail decision makers are making plans to hire additional staff for the holidays. They believe this is the best way to meet the demands of the holiday rush. Companies are hiring an average of 98 full-time seasonal employees. Up to half of the respondents will hire even more (190). The cost of this is more than what it may seem like at first glance.
Calculating each employee at minimum wage for a full 40-hour workweek would cost the company an extra $312,816. This doesn’t take into account the time it takes to train them. By investing a fraction of that into technology that would handle some of the “busy” work, retailers wouldn’t need as many employees. The savings would be significant.
Secondly, 40 % of those in the retail industry significantly increase their inventory during the holidays. The problem with this practice is the merchandise may not sell, then the retailer has to move it for clearance prices or suffer a greater loss. There are software programs that predict inventory needs by analyzing data from the past. Instead of picking a random amount of extra inventory to order, software tools provide a more accurate number.
Lastly, only 58 % of retailers invest in technology to streamline their retail processes. However, 35 % said they are very likely to begin investing in technology that would help with “back-office and inventory processes.”
According to the Brightpearl research, retailers could be saving close to 60 days of time by automating many repetitive tasks. When time is saved, money is saved also. In addition, customers are more satisfied because you eliminate human error when some tasks are automated. One retailer, DUDE Products, Inc., discovered the convenience of implementing software technology. The CEO, Brian Wilkin had this to say,
“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. In turn, we expect to fully optimize our 2017 holiday sales spike because we’ve built up an informed safety supply during Nov/Dec.”
Derek O’Carroll, CEO at Brightpearl says that retailers “could save precious time and money during their busiest season.” He highlighted how with the competition from online retailers like Amazon, brick and mortar retailers need to utilize the full array of technological tools. “Short-term, inefficient solutions like hiring more staff or increasing inventory levels often end up hurting their bottom line.”