Primary Retail Brands Hiring More Third-Party Contractors
Traditional retailers face serious challenges in 2016, ranging from demanding customers and a complicated path-to-purchase across devices to competition from e-commerce giants such as Amazon. To meet the challenges of an ever-connected retail universe, more retailers are relying on third-party contractors to help with everything from deliveries and sales to service and support. These workers have become valuable resources that retailers count on to please customers, keep store technology functioning properly and much more.
But what if customers are dissatisfied with those workers? What if communication and quality failures lead to service gaps that actually weaken retailer reputations — driving consumers online or to competitors? That is what a recent survey of 200 companies (61 percent were retailers) by ClickSoftware found: Partnerships between businesses and contractors, it turns out, are not as solid as they were believed to be and should be. Retailers now realize that more needs to be done to improve and support overall customer satisfaction, in order to boost customer loyalty, reduce service costs and improve profitability.
“Primary retail brands are hiring more third-party contractors to provide service or product support for their customers,” Mike Karlskind, director at ClickSoftware, told FierceRetailIT, which has cited Walmart and Target as examples of big-box retailers investing heavily in fulfillment. The publication also pointed to seasonal businesses such as retailers that specialize in home improvement as particularly keen on using third-party contractors. “This use of contractors as an extension of in-store personnel is an increasingly important way for retailers to differentiate against pure e-tailers, while avoiding overhead costs related to maintaining a pay-rolled field service and delivery workforce,” Karlskind said in the interview.
The survey found, however, that retailers receive more customer complaints regarding their contractors than other industries — about everything from scheduling issues and late arrivals to work taking too long.
“Contractors have become an essential part of the service delivery equation for many companies, but there is a need for more visibility into the contractor’s workflow, as well as better tools that would help contractors complete their work in a more timely fashion,” Karlskind said. More than 80 percent of contractor managers in the survey expressed a desire for a tool that would help them better monitor and communicate with their contractors and subcontractors.
The modern retail organization has changed almost beyond recognition over the past couple of decades. Enterprise retailers looking to stay competitive in 2016 have begun embracing an operating model that provides flexibility in terms of costs and allows them to be operationally nimble. They need to be able to scale their team without sacrificing visibility, quality or control. An on-demand workforce of independent contractors allows them to do just that.
Now, technology can help retailers solve these issues with blazing speed and simplicity. They finally have a better way to monitor and manage their on-demand workforce — allowing them to prepare for spikes in demand, respond instantly to in-store malfunctions and handle product roll-outs on the fly. They can slash operating costs, accelerate the time-to-market for new products and improve customer responsiveness.
The use of independent professionals and third-party contractors is only going to become more common, Karlskind concluded in his interview with FierceRetailIT. “The challenge for the in-house managers of contracted work is to support their contractors better, and make communication so transparent and instantaneous that customer satisfaction—and brand reputation—can only go up,” he said.