How a Supply Chain Approach Helps Retail & IT Store Growth

June 15, 2017 | Post by Tom Jacobs | 0 Comments

Purchasing Retail Technology Solutions

Today’s retailers are masters of getting merchandise into stores. Most have turned their supply chains into finely tuned operations that can get the right number of products to the store at exactly the right time. This scale and efficiency reduces storage and other costs, creates a competitive advantage, and has revolutionized the way stores handle inventory.

Why then, do so many retailers struggle when it comes to purchasing their own retail technology solutions for their stores? Imagine the savings if retailers were able to apply the same just-in-time approach to their in-store equipment as they do to their merchandise.

Over the years, I’ve watched retailers make similar mistakes. And when deployments involve hundreds or thousands of stores, these mistakes can quickly snowball into delays or budget overruns that impact the entire project. But by taking a strategic approach, retailers can tie the purchasing of technology to the store refresh schedule and avoid many issues.

Why Purchasing Retail IT is Different

Technology purchases are often irregular or sporadic. They are typically large and complex decisions that impact the wider organization. IT departments need to get the best price possible to stay within budget, and the equipment needs to be available on-site when it is time to install it in the store.

With already limited resources, the IT department is not in a position to manage every vendor relationship individually while making separate purchases for each store. Instead, they simply buy a large volume of equipment when there’s a discount or sale and keep it in inventory until it is needed.

However, with this approach retailers end up with equipment well before it is needed for the stores, or they purchase too much or too little because they don’t have a clear understanding of how much is needed for the project. Despite some initial upfront savings, this quickly becomes a costly waste of time and money.

Since the stores are not ready for the new equipment, everything must be warehoused and stored in inventory until it is needed. This ties up capital and uses up the warranty the entire time the equipment sits on the shelf. And with technology changing so quickly, it’s not unusual for the equipment to become obsolete before it is even used, making the entire purchase a waste.

Finally, managing the logistics of getting the equipment from the vendor to the warehouse, and from the warehouse to the stores, quickly becomes a headache that requires a lot of work for your retail employees. Surely, there must be a better way.

Taking a Strategic Approach to Purchasing with a Retail Technology Solutions Provider

With the help of a retail technology solutions provider, retailers can tie the purchasing of technology to the store refresh schedule and buy only what they need, when they need it. This lets them deploy it into the store right away, rather than warehouse it for later. This is similar to how merchandise gets put on the shelf as quickly as possible.

This can be done with the help of a partner who has the ability to acquire equipment from multiple sources, and store the inventory themselves. This means there is always product available when the retailer needs it, and they can gain access to the right price without committing to large volumes at once. Plus, it mitigates the risk of waste and reduces all the costs and inefficiencies associated with buying upfront.

Put your Capital to Better Use

Most importantly, by avoiding inventory, retailers can free up capital and resources for other, more strategic uses. In such a competitive and fast moving environment, this can be a huge benefit for retailers looking to invest in multiple projects.

Similar to how retailers have made their supply chains incredibly efficient, they can do the same when purchasing their own retail technology solutions. By taking a strategic approach and aligning the purchasing with the store refresh schedule, each store gets the right amount of equipment at the right time. The result is less risk of costly delays or setbacks. With the right partner in place to source the equipment, manage the logistics and keep everything on track, retailers can let their IT departments focus on other strategic initiatives, comfortable knowing that they are making efficient use of their investment in technology.

We explore retail IT equipment strategy further in Finding a Strategic Advantage with Retail IT POV.

The content and opinions posted on this blog and any corresponding comments are the personal opinions of the original authors, not those of CompuCom.

  • Tom Jacobs

    Tom is Field Logistics for Enterprise Support at CompuCom.

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