The 4 most important things to outsource when starting your retail business


The importance of retail business is in its statistics. According to one study, the U.S. retail sales exceeded US$5 trillion in 2017.  The U.S. boasts 1 million retail establishments employing 29 million people. These are big numbers attracting people to enter retail businesses. Retail business is the last mile connectivity between ultimate customers and manufacturers including service providers. As such, retail businesses have an important role to play in the retail supply chain.

There are several types of retail businesses such as online stores, department stores, discount stores, supermarkets, specialty stores and convenience stores. Each of these serves ultimate customers giving them immense choice of products and personalized services.

The functions of a retail business include among others ordering in bulk quantities and breaking these into units suitable for retailing. Retailers also order different brands of the same product so that the customers get choice of brands increasing the probability of completing a sale. The retailers’ main function is to attract customers to their retail stores through appropriate communication and presence on high streets followed by excellent salesmanship and motivational pitch. The retailer is the bridge between the brand and the customer and also a market information carrier for the brand.

In such a scenario, retail businesses have to be on their toes 24/7 if they have to succeed in their businesses. Since retail businesses carry out a host of specialized functions they are well placed to leverage the outsourcing business that thrives in the market place.

There are 4 areas that retail businesses can look at seriously for outsourcing as follows:


Marketing is a specialist function that requires professional touch. While retail businesses can undertake the marketing planning functions, they can outsource the implementation to marketing agencies that can handle the myriad sub-functions that constitute a marketing program. Advertising and sales promotion strategies need to be implemented precisely targeting specific groups of customers. With the proliferation of Internet access the time has come for personalized targeting. Online media is a tricky business and if not handled properly can bleed a retail business badly. Moreover, online media are evolving and everyday something new crops up and it would be difficult for businesses to handle the function in-house adequately. The other important plus point with targeted marketing is the accountability that is possible and pricing can be based on customers served.

Customer interaction service

Customers are the lifeline of retail businesses. They need to be nurtured properly to build a lasting relationship so that retailers can retain them and they keep coming back for more purchases. In today’s age of technology and big data handling large number of customers is a specialized task best left alone to experts in the field. Thus, the telephone (now smartphones) along with social media forms the backbone of any customer centric business. In the case of retail businesses the individual customers run into millions and handling customer enquiries, complaints and post-sale services is a humongous task for any business. Thankfully, there are agencies that are adept at such tasks and it is extremely important for retail businesses to look for competent agencies to handle all customer interactions professionally. They can add value to businesses by employing all the tools such as machine learning and artificial intelligence available through multiple communication channels such as smartphones, emails, live chats, social media and online channels.

Contract packaging

As mentioned earlier, retail businesses cater to a large number of customers buying a variety of consumer goods according to their preferences. The retailer is required to match the customers’ preferences with the products they seek. This is a tall order when there is large number of customers and the products are numerous. This is again a difficult task for the retail business to undertake in-house. There are professional contract packaging services available in the market place and it is advantageous to retail businesses to hire such agencies. They bring a professional touch to the business resulting in increased customers, timely deliveries and as per one study 7-9% of savings in operational expenses. Thus, hiring contract packaging companies is worth their weight in gold.

Finance and accounting

Finance and accounting is a specialized function requiring the services of qualified CPAs and finance professionals. This function is critical for the health of the retail business as the business must manage a host of activities such as payroll, accounting, capital investments, costing, pricing and statutory and regulatory filing. The finance professionals can also advice the retail business on the ways to reduce costs and improve the bottom line. This function is a perfect candidate for outsourcing.

The four areas described above are among the most popular areas suitable for outsourcing. However, the nature of retail business and its characteristics determine the areas that qualify for outsourcing.