The customer experience is continuously evolving as new technologies are introduced into stores by retailers. In a recent study conducted by RIS News and IHL Group, 66 percent of retailers planned to increase their in-store IT spending in 2016, mainly to implement technologies such as point-of-service (POS) hardware and software, mobile POS, in-store mobile devices for managers and associates, and digital signage. In total, these investments led to a 5.5 percent average increase in store technology spending from 2015.
Of course, the more technologies retailers add to the stores, the more complex and challenging the procurement process becomes. Common mistakes, such as purchasing too much or too little, buying at the wrong time, or failing to effectively negotiate contracts, can have a negative effect on the retailer’s bottom line and put the entire project at risk. With razor-thin margins and tight deadlines, retailers simply can’t afford to make these mistakes. Fortunately, a consolidated approach can make the procurement process far more efficient and effective by dealing with a single retail IT support partner. Here are four ways retailers benefit from taking this approach.
1. Single Point-of-Contact
Each vendor or original equipment manufacturer (OEM) may excel in one technology or solution, but they may lag behind in others. As a result, retailers often require up to a dozen vendors or OEM relationships in order to get the right equipment into their stores. For small IT departments, managing this can quickly become challenging. A consolidated approach simplifies the procurement process and gives retailers a single point-of-contact, the retail IT support partner, for everything from purchasing to service level agreements and warranties. This makes the entire process more efficient and reduces the burden on internal IT staff.
2) Getting the Right Equipment
Whether it’s due to poorly defined requirements, vendor lock-in, or simply not having the time required to properly research alternatives, many retailers end up purchasing the wrong equipment. Either it’s something they don’t actually need, or it just isn’t the best fit for their existing store infrastructure. An OEM independent provider can work with retailers to identify their needs, research equipment vendors, and customize solutions depending on the individual store footprint and infrastructure, giving retailers the best technology for their unique needs.
3) Scale and Volume Discounts
One of the most common mistakes retailers make is buying a large volume of equipment or technology before they actually need it installed in the store. Most of the time, this is done because of a price reduction or volume discount. However, any immediate savings are quickly wiped out due to storage costs, and many times the equipment ends up sitting on a shelf until it is obsolete. Instead, retailers can partner with a retail IT support provider, giving them access to volume pricing while only buying what they need, when they need it.
4) Lower Total Cost of Ownership
In addition to these upfront savings, a consolidated approach to procurement can lower total cost of ownership, a critical factor for retailers operating on slim margins. By taking advantage of the partner’s size, scale, and ability to keep inventory on hand, retailers can purchase equipment in line with the store implementation schedule. This reduces the time between purchase and implementation, leading to lower storage and transportation costs, while mitigating the risk of equipment going unused. They also benefit from the full warranty period and a longer lifespan of equipment. When dealing with hundreds or thousands of store locations, these benefits can quickly add up to big savings.
Overcome the Procurement Puzzle with a Consolidated Approach
Procurement is complex, and it will only become more difficult as stores introduce more technology in order to build a better customer experience. Partnering with a retail IT support provider can help simplify this process and reduce the burden on internal IT teams. Rather than dealing with multiple vendors and OEMs individually, retailers gain a single point-of-contact that can provide the scale, buying power and expertise needed to get the right equipment at the right price.
Done right, your IT can provide a big competitive advantage. If you want to learn more about the common mistakes retailers make and how you can overcome them, download our Point of View – Finding a Strategic Advantage with Retail IT.
Feel free to leave a comment about your own experiences, or to ask a question.