An increasing number of retailers are turning to retail outsourcing to solve the challenges of rising operational costs, talent shortages, changing demands from consumers, and tougher competition. By offshoring business functions, such as Customer Service, Sales, Dispatch, Logistics, Merchandising Assistance, Finance & Accounting, and others, retailers can better keep their growth and expansion on track. Due to the many benefits of offshoring solutions, a growing number of midsize to big retail brands are now increasing their offshore capacity to improve operational efficiency and future-proof their business.
Benefits of Retail Offshoring
Retail outsourcing allows retailers to tap into the expertise of talent overseas, helping them fill in critical roles, improve operational efficiency, meet seasonal increase in customer demands, and provide better customer experiences.
- Digitize operations. One of the hindrances to eCommerce adoption is the lack of resources needed to push digital initiatives. Offshore outsourcing allows retailers to hire tech talent overseas to achieve their digital transformation and eCommerce performance targets.
- Improve customer service. One of the most common outsourced business functions is customer service. An experienced team of customer care representatives who are highly skilled and experienced in communicating with clients via phone, chat, and email is a game-changer to any retail business. It allows timely resolution of customer issues, meaningful interactions with customers, and a consistent customer experience.
- Improve digital presence. The Philippines is one of the top social media users in the world. The country has a rich pool of highly skilled and experienced digital marketing professionals that support global businesses in improving their digital presence. From social media strategists, analytics specialists, and SEO & SEM experts, companies can hire almost any type of digital marketing role the business requires.
- Enter new markets and expand operational hours. With offshore employees working in various time zones, retailers can easily expand into Asia, the United States, and other locations. They can also extend their operational hours, ensuring that customer care specialists are present to cater to the needs of customers in real time.
- Better handle seasonal increases in demand. Retail operations are heavily influenced by seasons. Having an offshore team can help brands keep up with growing customer needs during the holidays. Having an offshore capacity makes it easier to scale the team up or down depending on seasonal requirements.
- Free up capital to fund innovation initiatives. One of the main offshoring drivers for businesses is cost reduction. Offshoring helps retailers save 70% on employee costs annually. This allows them to funnel resources to fund new systems and innovation initiatives.
Getting into Retail Outsourcing
While many retailers are looking into offshore outsourcing as a viable growth strategy, starting the journey may not be as easy without an expert outsourcing partner leading the way forward. Here is a comprehensive guide to ensure retailers can get the most value and ROI out of their outsourcing strategy.
Assess Your Retail Needs
Assessing your current operations is crucial in understanding your retail outsourcing needs. To begin, you can identify your current company’s pain points by:
- Gathering employee feedback – Ask your employees about operational challenges. Understand their workload and check if your in–house team lacks specific skills or expertise or is overwhelmed with tasks.
- Process inefficiencies – Map out your entire process and identify the areas that are time-consuming, prone to error, or labor-intensive.
- Capacity constraints – Observe if your in-house team is capable of handling tasks or functions without backlogs and missed deadlines.
- Seasonal or fluctuating demands – Check if your business experiences peak seasonal or fluctuating demands and what period it is.
- Customer feedback – Monitor the satisfaction level of your customers. Do they complain about long response time, poor product quality, or difficulty reaching support?
- Industry benchmarks – Research your industry benchmarks and best practices. See what your competitors are doing and identify critical areas you are falling behind.
Once you have identified your pain points, determine which tasks and functions are suitable for outsourcing. You must identify your core business operation’s critical tasks or functions because these activities are typically best kept in-house. Determine whether the tasks require specialized skills that are unavailable in-house or not cost-effective in-house. You should also consider time-sensitive tasks or those requiring 24/7 availability to mitigate challenges and delays in critical areas of the operations.
Be clear about your outsourcing goals. Whether it is cost reduction, operational efficiency improvement, access to technology, and highly-skilled talent, you need to put it in writing to have better alignment and smooth collaboration with your offshoring partner. In addition, clear objectives allow you to evaluate potential offshoring partners based on their expertise, track record, and capabilities.
Research and Select an Outsourcing Provider That Can Meet Your Needs
Finding a reputable and experienced partner is crucial in your entire outsourcing journey. A reputable outsourcing partner can deliver high-quality service in building your team, possess industry knowledge and expertise, navigate challenges smoothly, and contribute to your growth. Here are several ways to assess your prospective outsourcing partner:
- Evaluate their industry expertise and track record –There are plenty of ways to check your prospective offshoring partner’s expertise. You can explore their website and examine their client portfolio. You can look for case studies or proof that they have specialized retail industry experience. You can review clients that are similar to your business and how the provider handled their needs from the due diligence stage to onboarding an offshore team. You can also look for recognition and awards from the retail sector and their body of experience in the industry.
In addition, you can also request client references and reach out to them for possible feedback. Ask about their experience working with the offshoring company, success stories, and satisfaction level.
- Check their resources and ability to meet retail-specific needs – Check if they can smoothly handle your workforce requirement. Make sure to ask about the following points:
- Their recruitment process, the length of hiring individuals, and if they can handle your manpower needs.
- Their technology infrastructure and capabilities. Ask about their tools, hardware, software, and communication systems to ensure the proper extension of your onshore team.
- Their talent market knowledge relating to the roles you require.
- Evaluate financial viability and cost-effectiveness – Check how their pricing models and cost structure align with industry standards. Compare the cost of going in-house versus going offshore. Some company websites offer savings calculators, so you can check this out. See if their pricing is transparent and provides you with the flexibility to scale up or down depending on your business needs.
- Request for a proposal and conduct interviews – There’s no better way to know your prospective offshoring partner better than to request a proposal and talk to them. By doing so, you can assess alignment with your business needs, understand their service, determine if it’s a cultural fit, gauge reliability and commitment, clarify concerns first-hand, evaluate other key aspects, and make a well-informed decision.
Create a Comprehensive Outsourcing Strategy
In close collaboration with your offshoring partner, you can create a comprehensive outsourcing strategy that matches your business. Your offshoring partner can help you in several key aspects, such as:
- Scope of Offshoring and Functions to be Offshored – Based on your initial assessment, your offshoring partner can help you determine key roles that you can offshore to achieve your strategic objectives, whether it is Customer Service & Sales, Back Office Administration, Inventory Management, or Order Processing role.
- Timeline for Implementation – Your offshoring partner can also collaborate with you to establish specific implementation timelines. They will consider factors, such as the transition’s complexity, your business’s readiness, system integration, data migration, if necessary, and testing and quality assurance.
- Expected Outcomes or Key Performance Indicators (KPIs) – They can also help you define the expected outcomes, such as improved efficiency, cost savings, enhanced customer experience, or faster turnaround times.
- Risk Management – The comprehensive strategy also includes an assessment of the risks involved within the entire outsourcing. It has potential risks such as legal and compliance risks, service disruptions and continuity, data security and privacy, intellectual property protection, vendor dependency, cultural communication and challenges, and more.
Onboarding and Training Processes
Developing an onboarding plan is crucial. The good news is your offshoring partner will collaborate closely with you to facilitate your offshore team’s seamless and efficient transition by:
- Providing Expertise – Your outsourcing partner can offer expert advice and share best practices to ensure a seamless onboarding process. Their assistance extends to all aspects of establishing the process, enabling you to build an offshore team that mirrors the capabilities and dynamics of your onshore team.
- Process Alignment – Your offshoring partner can work with you to coordinate procedures and processes between the onshore and offshore teams. They can assist in creating uniform operating systems (SOPs) that streamline your offshore teams on the company standards.
- Training – Your offshore partner can also assist you in producing a comprehensive collection of training materials, including:
- Knowledge Base or Wiki – A principal storehouse of knowledge with instructions, questions and answers, and best guides that your offshore team can refer to.
- Virtual Training Sessions – Facilitating interactive learning and clearing doubts by giving recorded training sessions on particular subjects or skills.
- Job-specific Training Materials – Create job-specific materials that ensure proficiency in carrying out tasks by offering thorough instructions, illustrative examples, and sample exercises related to particular job roles.
- Mentorship Program – Integrating new team members with experienced colleagues who can provide valuable support and guidance during the training and coaching process.
- Assessments and Quizzes – Seasonal assessments to determine the comprehension and development of offshore team members, pointing out areas that need more attention or improvement.
- Continuous Learning Resources – Facilitating industry announcements, disclosures, online resources, or outside training programs to promote ongoing education and professional growth.
- Culture Training – Your outsourcing partner can help connect cultural and language gaps if your offshore team has a different culture. They can aid the onshore and offshore teams’ successful communication, offer training in cultural understanding, and offer language support. They can identify cultural differences – history, tradition, festivals, and other norms and share with both onshore and offshore teams and have a better understanding of each other.
- Facilitating Collaboration – To encourage teamwork, knowledge sharing, and smooth coordination between the onshore and offshore teams, your outsourcing partner can help with communication channels, arrange collaboration tools, and create regular online meetings.
- Performance Monitoring and Support – Your outsourcing partner can also monitor your team’s performance. To ensure the offshore group meets performance expectations and proactively acts against any challenges. They can create metrics, handle periodic audits, and provide support and feedback.
- Continuous Improvement – Your offshoring partner may gladly contribute to the ongoing performance enhancement of the offshore team by utilizing and improving their knowledge. Based on industry movements and best practices, they can pinpoint areas for development, advise process improvements, and offer creative solutions. Your offshoring partner assures you of the value of continuous improvement.
- Team Engagement – Your outsourcing partner can also support the development of a better working relationship with the offshore team as your strategic partner. They can organize teambuilding activities to link the offshore and onshore teams, promoting efficient communication, collaboration, and camaraderie.
Ensure Quality Control and Consistency
Once the offshore team has been successfully onboarded, the subsequent steps entail maintaining a high standard of work quality and ensuring consistent performance. Here are five practical ways that you can do to ensure quality control and consistency of your offshore team and your partner.
- Establish Quality Standards for your Offshoring Partner and Metrics for Your Offshore Team
Quality Standards for Your Offshoring Partner:
- Quality – To ensure the outsourcing partner’s work exceeds expectations, creating quality standards and metrics is the priority. Some examples include IT reliability and following established procedures and guidelines.
- Cost-Related Metrics – Evaluate cost-related metrics to determine the financial impact of offshoring, such as cost savings, return on investment ( ROI ), and other indicators of the value offered by the partner. By measuring these metrics, your offshoring partner can accurately assess outsourcing initiatives’ productivity and economic advantages.
- Compliance and Security – Create metrics and standards for adherence to information security, confidentiality, and legal and regulatory requirements. Verify that your offshoring partner provides a stable environment for handling sensitive information and complies with all required compliance standards.
Productivity and Efficiency of Your Offshore Team
- Create productivity metrics such as output rates, utilization rates, task completion percentages, and efficiency gains from process improvements to track the effectiveness of your offshore team. You may also establish metrics for timeliness, such as task turnaround time, response time to customer queries, project deadlines, and others.
- Determine how well your offshore team meets your customer’s needs and expectations. You can use surveys, suggestion mechanisms, and other tools.
- Regularly Monitor the Metrics – This is crucial because it gives your company real-time information about the efficiency and performance of your outsourcing operations. You can identify trends, track and measure progress, and make data-driven decisions to enhance your offshore teams’ efficiency and effectiveness. Regular monitoring enables proactive administration and the capacity to make immediate modifications or improvements, ensuring that offshoring initiatives align with strategic objectives and produce the desired results.
- Implement feedback loops and continuous improvement processes – This is another essential step for gearing your outsourcing partner to be more sustainable in the long run. You can do performance evaluation tests, surveys, and regular webinar sessions with your outsourcing partner. You must also monitor progress and failures continuously to maintain ongoing growth and fix missteps early.
- Listen to Your Outsourcing Partner – You also need to actively listen to your outsourcing partner and study the source of the problem. Two-way communication is the key to addressing issues beyond the expected benchmarks. As a business owner, you must take time to address gaps. You need to solve even the most minor issues that you see.
- Maintain open communication – Choose a steady online communication channel for messaging, calls, and webinar conferences, such as Zoom, Slack, Microsoft, and Google Meet. Foster friendly and encourage two-way communication with your outsourcing partner to ensure successful daily operations and proper handling of issues and concerns. Keeping open communication channels boosts trust, enhances collaboration, and facilitates a positive stakeholder experience.
Start Your Retail Offshoring Journey with Satellite Office
Building an effective offshore strategy is way easier if you have a trusted offshoring outsourcing company. You don’t need to create it from scratch and spend months or years to finally implement it. With the right offshoring partner, you can always begin today.
Satellite Office has a proven track record of assisting businesses to leverage the benefits of outsourcing by building them a dedicated, highly skilled, and cost-efficient offshore team in the Philippines.
Our tailored offshore outsourcing solutions give businesses full control of their remote team’s productivity, output quality, and targets while we provide comprehensive support that makes managing offshore employees as simple as possible. Experience a full-service model, including premium facilities, HR, IT infrastructure, account management, and payroll support services, with no hidden fees.