Recession Pushes Retailers to Outsource

Recession Pushes Retailers to Outsource

Analyst firm Datamonitor said retailers would opt to outsource their businesses this year as the market tries to win over the upshots of recession. The increase in IT and business process outsourcing demand is attributed to firms aiming to earn by focusing on their customer's interests while trimming down costs. 
 

“Many retailers are looking to technology and services to help cut the cost of managing inventory, non-critical business processes and store operations," Datamonitor retail technology analyst Christine Bardwell said. 

 

“Cutting down on staff and inventory offers a twofold opportunity for outsourcers, as retailers will be looking to service providers to help cut costs across the business; and will also be short of staff, or having trouble managing correct stock levels so will look to outsourcers to provide the solution," she added.

 

Datamonitor's report further showed that retailers plan to modify existing outsourcing contracts to bring out more money value from business partners.

 

“Large-scale infrastructure overhauls are less common. Instead, retailers are requesting a mixture of services on lower-value contracts, or transformational deals over longer periods of time," Bardwell said. 

 

“As capital expenditure must go a lot further than a year ago, retailers now require outsourcers to offer flexible payment structures, for instance by offering shorter-term contracts with monthly payments.

 

However, retailers are becoming conscious with the advantages of outsourcing, overshadowing issues that may arise. Such concerns were incited by offshoring jobs, language barriers and access to retail sector expertise.