To ITO or Not to ITO: Retailers Ask the Question
Information technology outsourcing (ITO) enables organizations to cut labor and infrastructure costs, improve operating efficiencies and increase flexibility in the IT department. Although certain aspects of retailing are ideally suited to out-of-house automation via ITO, the retail industry as a whole has not embraced ITO as much as some other industries.
That said, ITO is not an appropriate strategy for every company, IT department or IT-related situation. So how can a retail executive making IT decisions determine when they should outsource and when they should keep things in-house? Following are three situations where a retailer should at least seriously consider using ITO as a means of increasing efficiencies while reducing costs.
Don’t Sweat the Small Stuff
One area of any enterprise where ITO can prove hugely valuable is in the management and processing of low-level processes and data. Generating large volumes of individual transactions both on the front and back ends of the business, retailers typically execute numerous low-level processes and collect reams of low-level data (more on that in a moment).
By moving some or all of the processing of their “small stuff” to outsourcing providers, retailers can shrink their IT budgets without sacrificing any solutions or personnel focused on handling more important areas of the business. In addition, IT employees are freed to spend more time developing, implementing and managing higher-level systems that perform more mission-critical processes and tasks.
No Task is Too Big
On the other end of the ITO spectrum, sometimes IT-related tasks that require expensive and complex systems and/or highly trained personnel are best left to outsourced experts. For example, all those low-level transactions retailers execute every day produce tiny nuggets of data that don’t mean much individually, but when holistically combined and analyzed as “Big Data” can offer unparalleled insight into the enterprise.
Harnessing and leveraging Big Data to obtain the actionable insight hidden within is neither cheap nor easy. Rather than going to the considerable time and expense required to develop in-house Big Data competency, retailers may find it much more effective and efficient to outsource Big Data operations to a third-party expert. This also applies to other leading-edge IT-related activities that are becoming more crucial to everyday operations, such as social listening and monitoring, mobile integration and personalized marketing.
Call for Help
Say the word “outsourcing,” and many people think of someone wearing a headset in a call center. Call center was one of the original outsourcing practice areas, and remains a major outsourcing competency. However, modern call center outsourcing encompasses much more than routing customer complaints to a phone representative in a distant office. Using sophisticated systems, ITO providers can automatically screen all forms of customer contact (including email, IM, text, and online/social commentary as well as phone calls), categorize and prioritize them, and route them to a specific expert for prompt resolution. In some cases, automated response may be sufficient. ITO can also be applied to internal call center operations, such as IT help desks.
So while ITO is not a panacea for all retailer IT needs, it is a viable option that should always be part of the technology conversation.
ICSC: Consumers starting holiday shopping early
New York — Procrastinating is out this year when it comes to holiday shopping, with most consumers (62%) planning to finish their gift buying on or before Dec. 16, according to a survey by the International Council of Shopping Centers.
As in most years, the top shopping day of the year is expected to be Black Friday. However, Cyber Monday will follow close behind across most demographic groups, overtaking Super Saturday as the second busiest holiday shopping day of the year.
The hottest gift category this year is expected to be toys and games followed closely by consumer electronics. Gifts receiving the most specific mentions include smart phones, tablets, game consoles, digital cameras and televisions.
Other key findings include:
- 37% of women list "seasonal discounts" as their top motivating factor while only 20% cite "gift practicality." Men were more evenly divided between "seasonal discounts" (30%) and "gift practicality" (27%) as the driving factor influencing their holiday shopping.
- Men are more likely to shop for consumer electronics this year while women intend to buy games and toys.
- Respondents aged 18-34 are significantly more likely to shop for consumer electronics this holiday season than any other age group surveyed.
- Approximately one-third of respondents from households with a combined annual income of $100,000 or more are expected to shop on Cyber Monday versus Black Friday. The opposite is true for respondents from households with a combined annual income of less than $35,000.
- Respondents from lower income households are more driven to find the perfect gift for their loved ones this year, with 40% of respondents in the $35,000-and-under income category saying that "finding the perfect gift" is the factor most likely to influence their holiday shopping.
Amazon to deliver Sundays
Amazon.com is working with the U.S. Postal Service to deliver packages on Sunday, starting in the Los Angeles and New York metropolitan areas, and plans to roll out the service to a large portion of the U.S. population, including Dallas, Houston, New Orleans and Phoenix, in 2014.
Amazon Prime members, who receive unlimited, free two-day shipping, are eligible for the service.
“If you’re an Amazon Prime member, you can order a backpack for your child on Friday and be packing it for them Sunday night,” said Dave Clark, Amazon’s VP of worldwide operations and customer service. “We’re excited that now every day is an Amazon delivery day and we know our Prime members, who voraciously shop on Amazon, will love the additional convenience they will experience as part of this new service.”
“As online shopping continues to increase, the Postal Service is very happy to offer shippers like Amazon the option of having packages delivered on Sunday,” said Patrick R. Donahoe, Postmaster General and CEO. “With this new service, the Postal Service is now delivering packages seven days a week in select cities. Customers can expect the same reliable and valued service that the Postal Service currently provides.”