Study: Poor technology planning will cost retailers $300k this holiday season
Retailers that fail to invest in technology to meet peak holiday demands will land them right on the naughty list with holiday shoppers.
In fact, these poor decisions could cost retailers more than $300,000, according to a study from retail management systems provider Brightpearl. The survey tapped more than 350 senior retail decision makers across companies ranging in size from small to very large.
According to data, retail automation technology helps retailers save the equivalent of 57.5 days a year by eliminating time spent on repetitive administrative tasks. The likelihood of negative customer service because of human error has also been reduced by up to 65%.
That said, mid-market retailers’ and wholesalers’ “technology ignorance” will give them a clear disadvantage in meeting peak holiday demands — especially compared to online and large retail giants. These decisions will lead to poor customer experiences, the inability to fulfill orders or meet increased demands due to lack of process automation, and inefficient business operations.
“These findings highlight how many retailers neglect to invest in technology that could save precious time and money during their busiest season,” said Derek O’Carroll, CEO at Brightpearl. “This doesn’t bode well for mid-sized retailers who find it challenging to compete with the likes of Amazon Prime — especially if they continue to ignore the operational advantages of technology. Short-term, inefficient solutions like hiring more staff or increasing inventory levels often end up hurting their bottom line.”
When it comes to hiring, 53% of retail decision-makers believe they can remain competitive by simply hiring extra staff. On average, they hire the equivalent of 98 full time additional seasonal staff to manage busy shopping periods. The top 50% hire approximately 190 holiday staff. The business costs of hiring 98 full-time employees based on average minimum wage of $7.98 at 40 hours/week per hire.
Retailers employing extra staff members to help during the 10-week holiday season running Thanksgiving through New Years can expect to spend, on average, an additional $312,816 (or $3,192/hire) in wages alone. (This does not include taxes, the burden of training new staff, costs incurred from mistakes by inexperienced employees, and extended work hours for existing staff, the study explained,)
Beyond hiring, 40% of retailers will increase their inventory significantly to cope with peak periods (despite the potential for wasted resources). Meanwhile, 35% of retail decision makers are ‘very likely’ to adopt a new technology solution that would help to effectively streamline their back-office and inventory processes. Further, 58% of retailer and wholesale decision makers currently invest in technology to manage sales spikes.
Online giant preps to open seventh warehouse in Canada
Amazon is bolstering its fleet of fulfillment centers in the Great White North.
The online giant will add a 600,000-sq.-ft. warehouse in Calgary’s Rocky View community. The depot is the first in Alberta, and Amazon’s seventh in the country.
The fulfillment center will create more than 750 new full-time associate roles. These employees will pick, pack and ship items ranging from aviator sunglasses to zebra costumes, according to Amazon.
The fulfillment center is expected to open next fall, according to The Calgary Herald.
The new associates will join a team of more than 2,000-full-time fulfillment employees across the country. In total, Amazon employs more than 4,400 employees throughout Canada, working at corporate offices, development centers, and other facilities.
Calgary is hoping Amazon’s decision to open a warehouse in the city is a positive sign of things to come — Calgary is among the many cities that made a bid to be the hometown for Amazon’s second North American headquarters, The Calgary Times reported.
Specifically, Amazon attracted 238 bids from cities and regions in 54 states, provinces, districts and territories across North America, all eager for the opportunity to be considered to host the online giant’s new headquarters, which it refers to as “HQ2.”
Amazon’s HQ2 team is currently evaluating each of the proposals, and plans to announce its decision next year.
UPS predicts a ‘record-breaking’ holiday season
Expecting shipping volume to jump 5% this holiday season, UPS is on track to shatter its holiday shipping records.
The carrier plans to deliver more than 750 million packages globally in the 25 days between Thanksgiving and New Year’s Eve. This volume is approximately 5% above last year’s holiday peak shipping season volume. During 17 of these 25 days, UPS expects to deliver more than 30 million packages.
To ensure it can get packages into recipients’ hands in a timely manner, the company is launching UPS Saturday Ground, a service that features five additional ground pickup and delivery days between Thanksgiving and Christmas. This service will add approximately 6,000 permanent, year-round jobs when fully implemented.
Overall, UPS plans to employ 95,000 temporary seasonal workers, including drivers, delivery helpers who ride with drivers, package sorters, and loaders, according to the company.
“Retail industry sales forecasts indicate another strong holiday season. UPS is working hand-in-hand with our customers to meet consumer demand for nearly double our normal daily residential and business-to-business deliveries,” said Kate Gutmann, UPS chief sales and solutions officer. “Online and mobile commerce has transformed the retail industry, and UPS is ideally positioned to serve both our consumer and business customers during even these busiest of times.”
To further streamline these deliveries, UPS continues to invest in operational and consumer technologies, and facility improvements. Customer visibility tools, “increased consumer convenience with expanded UPS Access Point network options, and new Saturday ground delivery and pick-up services are all part of the expanding solutions UPS is providing our customers, and their consumers, to take full advantage of the holiday season,” she added.
The company is also investing in its facilities to streamline holiday deliveries. For example, UPS completed four new and expanded facility projects in 2017, creating about 1 million sq. ft. of additional automated operations. Both package sorting and delivery capacity is increasing by about 6% over last year.
Meanwhile, advanced package scanning and sortation technology is increasing processing speed, accuracy and efficiency. It also enables package routing flexibility to meet growing customer shipping demands, the company said.
UPS’ holiday expectations come on the heels of its announcement on Wednesday to increase shipping costs by almost 5% on Jan. 1, 2018.