Achieving cost efficiencies in retail

By Derek Buchanan, CEO, Episys.

This article is brought to you by Retail Technology Review: Achieving cost efficiencies in retail.

Reducing operating costs is a vital element for most businesses at the moment, especially retailers, many of whom are seeing very little light at the end of the tunnel.  Here, Derek Buchanan, CEO of Episys, discusses the pro-active measures retailers can take to run businesses more efficiently and effectively.

Many companies are thinking in the long-term and are spending in order to save, seizing opportunities that may provide them with additional income even when economies are struggling in the current downturn.

One area of retail which may appear anodyne but requires attention and can generate notable savings is labelling and signage.

From the start, it is vital for retailers to take responsibility for price tickets at a store level so that any change in prices can be reflected immediately. In some situations, automated product labelling solutions have reduced the cost of producing all store signage by 80 per cent as well as cutting design time by 30 hours per week.

The retailing world has to react to the needs of the customer and to encourage them to buy anything, you need to communicate effectively.

We live in a fast moving society that wants almost everything to be easy to get to and going to a shop is no different. You would think that placing signs and labels in easy-to-see places with the correct information would be simple. It seems that it isn't.  Accurate, consistent information for customers, internal and external to the store, in an easily accessible, flexible and appropriate format is vital.

Speak the language

As we move toward an ever more global society there is growing pressure on businesses to meet the needs of customers more closely. Indeed, Governments in some countries, for example, are imposing regulations on retailers, which require them to print in store product labels in dual language such as Arabic and English in an attempt to combat fraud and counterfeiting which has reportedly been rife in certain states.

Translation is the primary problem, with most systems unequipped to deal with the conversion of such diverse languages. Next is consistency – the signage must equally reflect both English and Arabic, with only legalities allowed in the latter. Including dual language could be problematic on small scale items but there are products available which offer robust and extremely accurate labelling and signage solutions which relieve the pressure for retailers and provide a long-lasting solution.

The exception to the rule is Saudi Arabia, whose first language is Arabic which poses the opposite problem; to convert Arabic labels into English. However, systems such as Episys enable organisations to communicate in the most appropriate language.

Such legislation offers consumers better protection and understanding of products, which is a natural and important way to go. Indeed, it's encouraging that retailers want to rid the supply chain of counterfeit goods to give consumers the best deal.

Retailers need to realise that resource is no longer an excuse when it comes to the demands of global harmonisation. Implementing the latest technology is not just about keeping up with current standards, it is an enabler that can allow companies to differentiate themselves from other players in the market, leverage new benefits, drive innovation and put their business ahead of their competitors.

Taxation changes

In most parts of the world, VAT and other tax rates change from time to time depending on the economy and Government policy. This can have a major impact for retailers who find themselves with already stretched resources having to spend time re-labelling products.

An automated labelling system can remove this headache at the touch of a button by calculating multiple taxation levels and printing the appropriate labels for any number of goods in minutes.

Typically with a large price change or a percentage reduction across a department, many retailers printed a label for everything that changed. With an integrated signage system that interfaces with the retailer's inventory system and retailers only get the labels that need to actually be put out. If a store does not stock the item with the price change or has no stock, it does not receive signage for that item. Therefore there is no wastage of paper or time by the store associates having to sort out which of the signs sent to them is relevant to their store.

Perhaps more importantly, consistent signage and labelling enable the brand image to remain intact and enhance the customer experience.

Embracing digital signage

The issue of a high carbon footprint through using paper signage, powering printers, using toner cartridges and printing too many signs can be reduced with digital signage. One form of digital signage is electronic shelf-edge label display units, which replace traditional paper shelf edge labels. A major benefit to the retailer is the elimination of labour costs in putting up and taking down signs, which has to be weighed against the cost of digital signs versus paper signs. Less negligible carbon is expended on planes, cars, taxis and training rooms and fewer trees are expended on training manuals compared to electronic learning courses.

It's all about me

So by following these practices, retailers can drive down costs but at the same time save on costly marketing initiatives by getting closer to the consumer through targeted and consistent in-store communications, which support their wider multi-channel activities.