Tech ignorance will cost the average retailer $300,000 this Christmas

by | Nov 7, 2017 | Public Relations

New research from retail management systems provider Brightpearl finds that the majority of retailers and wholesalers will face a clear disadvantage meeting peak holiday (Black Friday and Christmas) demands when compared to online and large retail giants. Costs associated with adjusting business processes and operations could run the average retailer more than $300,000.

The data reveal that omnichannel retailers risk poor customer experiences and inability to fulfill orders or meet increased demands due to lack of process automation, as well as reliance on inefficient business operations.

Key findings include:

Hiring & Store Hours

Fifty-three percent of retail decision makers believe they can remain competitive by simply hiring extra staff, while 17 percent will extend opening hours


Forty percent of retailers will increase their inventory significantly to cope with peak periods (despite the potential for wasted resources);


Thirty-five percent 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; 58 percent of retailer and wholesale decision makers currently invest in technology to manage sales spikes.

Tech ignorance will cost the average retailer $300,000 this Christmas

“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, in a news release. “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.”

Respondents reported that, on average, they hire the equivalent of 98 full-time additional seasonal staff to manage busy shopping periods. The top 50 percent hire approximately 190 holiday staff. Brightpearl researchers calculated the business costs of hiring 98 FTEs 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.

For the 2017 holiday shopping rush, retailers must start by examining any missteps from previous seasons and look to apply technology solutions to future strategies, urged Brian Wilkin, co-founder of DUDE Products, a manufacturer of personal hygiene products, in the release. “It’s important that retailers have flexibility built into their DNA. It’s the only effective way to manage holiday demand and provide the level of customer experience shoppers expect.”

“We see a quarter of our sales, across online and brick-and-mortar retail stores, over the Holidays. During the 2016 season, retail management software enabled us to scale, abandoning spreadsheets for order processing and fulfillment via our warehouse. Smart cloud technology helped ensure adequate safety stock, sped order processing, automated Shopify downloads/real-time updates, and streamlined operations,” said Wilkin. “In turn, we expect to fully optimize our 2017 holiday sales spike because we’ve built up an informed safety supply during Nov/Dec.”

Brightpearl customer research has found 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%.

“Forward-thinking retailers need to make the most of this holiday season by using technology to refine back-office functions like processing, fulfillment, shipping and billing,” O’Carroll added. “Those who do will better manage increased demand and offer the level of service that customers expect.”

The survey was conducted online in September and October 2017, of more than 350 senior retail decision makers, with retailers ranging in size from small to very large.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter