Retailers focus on savings to avoid becoming another high street casualty

Dave Locke, Field CTO at World Wide Technology, explores how retailers can reassess their 2019 strategies and reduce outgoings in an increasingly challenging environment.

As high street retailers digest the trading losses from the worst Christmas in a decade, 2019 shows no signs of conditions improving with rising business rates, increasing competition and further store closures expected. 

Following a catastrophic 2018, which saw over 1200 stores close in the UK alone, retailers are under mounting pressure to save costs and improve competitiveness. However, all hope is not lost for the high street: retailers are stepping-up their efforts to tackle the wide-scale disruption in the sector. Investment in technology is expected to exceed £159 billion in the next six months as retailers adopt a more technology-enabled approach. An area that’s attracting growing attention is experiential retailing – Amazon pioneered this approach in 2018 with their flagship check-out-free store in Seattle and is expected to open 3000 new stores by 2021.  

One approach from retailers is to reimagine the store as a showroom space, which doesn’t need to provide as many direct physical sales as the online component, but which serves to enhance the e-commerce process. The store becomes primarily an offline experience that helps customers decide what they want to purchase online. This allows customers to enjoy the tangible and immersive experience of a real store while also taking full advantage of the benefits of an online platform. 

Retailers are also using connected technologies in-store to blur the boundary between the online and offline worlds. Click-and-collect is the most established example of this, but a raft of new technologies can be brought into the store to enhance the shopping experience. Virtual Bluetooth Low Energy beacons, for instance, can act as an extension of WiFi-based location services to provide precise location data for customers during their in-store journey. This allows retailers to react to customer browsing patterns and send detailed product information, or promotions, to their smart phones instantly.

However, as retailers attempt to balance investment in innovation with the associated costs, businesses are increasingly looking for ways to save money. 

An untapped source of revenue can be unlocked through Telecom Expense Management (TEM), a market that is attracting attention from retailers and is expected to grow to $3.43 billion in 2019¹. TEM enables an extensive mapping of a business’ communications network, identifying utilisation and costs for each segment. This data can be used to reduce expenses by consolidating suppliers and contracts and removing any dormant links. Effective TEM, applied as a comprehensive portfolio management solution, can save $2.5 to $4 million in costs for the average retailer² – a huge saving for companies whose profit margins are already eroding. 

TEM is an invaluable means of getting full visibility of a retailer’s underlying infrastructure and current cost base. By reducing costs, the capital can then be re-invested into digital initiatives, allowing retailers to translate their innovative ideas into real business outcomes, while releasing valuable resources currently locked away in inefficient legacy systems.  

The modern retail market is difficult to navigate, even for well-established organisations. Many retailers have a “store of the future” plan but struggle to identify and implement the technology needed to achieve their digital vision. The previously separate worlds of online and offline commerce are becoming more and more intertwined. The retailers who will excel in this increasingly digital world are those who take a holistic approach: combining physical and digital components effectively while also managing costs. TEM can help retailers cut costs, stay connected and integrate IoT and wireless technologies to stay profitable and competitive.

_{[1] Market Guide for Telecom Expense Management Services, 2018, Gartner, 2nd May 2018
[2] IDC, Telecom Expense Management: Order in a Complex World, June 2018}