How to Reduce Costs in Retail Without Hurting Your Business

Reducing retail costs will always be a high priority. Not least to combat the challenges of economic uncertainty, supply chain issues, and fierce competition.

Managing costs is vital to support growth. Even when conditions and optimism around consuming spending are on the up.

“The benefits of improving demand are at risk of being offset by rising costs: higher business rates, wage inflation, supply-chain disruption and increased security investments.”
Source: KPMG Think Tank

But how do you reduce costs without compromising retail productivity?

By making smart choices.

Combining existing technology with smart data capture can increase efficiency (same output, less input) or productivity (more output, same input).

Scandit Smart Data Capture has been helping leading retailers, including three of the top five global retailers, reduce costs for over a decade.

Reducing costs in retail doesn’t need major investment or new hardware. Deploying a smarter and more performant way to capture data and generate insights gets results.

There are three ways Scandit Smart Data Capture can help retailers reduce costs:

• Workflow optimization
• Increased compliance
• Technology investments and use

Let's get into the details

The fastest way to cut costs with workflow optimization is by eliminating manual, repetitive tasks and streamlining frontline processes. In retail, this often means using technology and automation to reduce wasted labor hours and errors.

Automating workflows like pricing, shelf management, and inventory management with high-performance smart data capture allows associates to do more work during their day.

Fast and accurate pricing and promotions

Manually updating prices and promotions is one task that drains expensive labor time and where inaccuracies can cost money. Lost revenue and potential fines, not to mention disgruntled customers, can ensue if items are incorrectly priced.

Scandit’s Smart Label Capture capability transforms retail shelf management by automating the pricing process.

The ready-to-scale solution enables store associates to scan shelves, capture pricing data, and compare them to the correct ERP system prices.

Cost-saving typical scenario

A retailer has 300 stores and 10,000 SKUs – 25% of which are on weekly promotion. Spending 4 seconds to check each price equals a total annual labor cost of $873,600 across all stores ($18/h). Using Scandit reduces the time spent to check each label to 1 second, saving $590k in labor costs that can be deployed elsewhere.

Precise inventory management

Inventory management is essential, but it can be tedious. The more SKUs and stores there are, the greater the time and cost burden.

Retailers suffer when inventory management goes awry due to demand forecasting and counting errors.

The combined cost of lost sales and disposals (known as inventory distortion) has reached alarming levels.

Whatever the retailer’s size, manual and one-by-one stock counts are time-consuming and could be better spent with customers, generating sales.

Scandit Smart Data Capture integrated into smart devices turns manual inventory management into a fast and accurate process.

Boosting productivity with smart data capture

A large Middle Eastern retailer achieved a 30% productivity gain in inventory management and other scan-heavy tasks by adding smart data capture to existing associate devices. There was no need for new technology or more associates, just technology working harder and associates working smarter.

MatrixScan Count can accelerate productivity further. The out-of-the-box solution speeds up inventory and counting workflows by up to 10x by scanning and counting multiple barcodes simultaneously.

Efficient order picking

Retail ecommerce sales worldwide will reach $6.419 trillion in 2025, growing 6.8% YoY Consequently, retailers spend more time fulfilling orders as fast and accurately as possible to secure customer loyalty.

Finding, scanning, and coordinating in-store orders makes fulfillment complex and labor-intensive.

Any savings significantly impact profitability.

Scandit Smart Data Capture integrated with existing technology, speeds up the order-picking process, reducing the workload on store associates and improving efficiency.

Advanced capabilities such as MatrixScan Find further boost order-picking and assembly efficiencies, increasing the pick rate by 30% for hard-to-find items.

Expiration date management and markdowns

Over a billion tonnes of food are wasted every year (UNEP Food Waste Report, 2024). And retail is responsible for 12% of this. Expired fresh produce can't be sold and must be disposed of. Plus, it's a missed opportunity to generate revenue.

Efficient markdown processes help prevent food waste and recoup much-needed revenue from expiring produce.

But done manually, markdowns still have a significant error-rate.

By automating the process with Smart Label Capture, associates can capture barcodes and expiration dates simultaneously and be guided on the action to take using on-screen AR - preventing waste and lost revenue.

How much food waste and revenue loss can you prevent?

Try interactive calculator

Summary table - traditional vs optimized retail workflows

Workflow	Without Scandit	With Scandit	Supporting data
Price audits	Checking prices one by one takes 4 seconds per label.	Capture multiple labels at once and reduce the time to 1 second per label	Staples Canada saved thousands of hours during weekly price checks at 100% accuracy
Inventory management	Manual counting leads to errors and inventory distortion.	Batch-based scanning speeds up counts and reduces errors.	Agrippa saved 4.5 hours daily on receiving tasks
Order picking	Finding, picking, and packing items manually is slow and error-prone.	AR guidance with fast, accurate scanning cuts time per pick.	OK Corporation cut picking time per item by 60% and reduced the error-rate to zero.
Markdowns	Manual markdowns have an average 4% error rate.	Automated Smart Label Capture manages expiry dates and reduces errors.	Up to $10 million per year can be saved through error reduction.

Accurate compliance processes reduce fines, prevent waste, and protect margins. By automating labeling, traceability, and expiration management, retailers lower error rates and ensure regulatory standards are consistently met.

Adherence to strict regulations is complex and varies from country to country and even within US states.

For instance, selling goods that are inaccurately priced or age-restricted risks potential and often hefty fines (up to $50,000 for selling alcohol to minors).

It pays via reduced retail costs to stay on top of compliance. Here’s how Scandit’s solutions help:

• Price Compliance: Overcharging customers at the checkout can result in fines. For example, the North Carolina Department of Agriculture and Consumer Services found 11 stores guilty of price scanning errors in 2025, with one store fined over $42,000 for breaches. ShelfView gives retailers constant shelf visibility and actionable insights by capturing shelf data and analysing it in the cloud. It highlights if a shelf-label price is wrong and provides store associates with corrective action.
• Restricted goods compliance: Selling age-restricted goods to minors can lead to fines of up to $50,000 and the loss of licenses, severely impacting profit. Scandit’s fast, accurate, and secure ID scanning and validation software runs on any smart device. It scans and validates IDs in just one second, including 2,000+ identity documents worldwide. Built-in fake ID detection software reduces human error, prevents fraud, and aids regulatory compliance.
• Food safety compliance: In 2023, Asda, a large UK supermarket, was hit with fines exceeding £400,000 for selling expired food products. Using Smart Label Capture, store associates can capture barcodes and expiration dates at once and receive feedback on what action to take via augmented reality overlays. Reducing the risk of unsafe food being sold and compliance fines.

Retailers can cut hardware costs by replacing expensive dedicated scanners with standard smartphones running barcode scanning software.

This eliminates device purchase and maintenance expenses while giving employees a flexible, multi-purpose tool.

Retail workers want the latest technology to do their jobs. It motivates them, makes them more productive, and gives them a reason to stay. Yet many retailers underestimate the importance of technology in driving workplace loyalty.

But how do you strike the right balance of cost versus innovation to give workers the tools they need to be more effective and productive? There are two solutions to reduce costs in retail, depending on your specific technology infrastructure and needs. You can:

• Maximizing the ROI of your existing hardware by adding productivity-enhancing features
• Scale up with a bring your own device (BYOD) strategy

Maximizing the ROI of existing hardware

It’s always worth assessing the value of upgrading the capabilities of existing devices versus investing in new ones.

Adding smart data technology to an existing scanning device fleet, whether handheld computers, smartphones, or a mixed device estate, can transform productivity and efficiency. Integrating advanced software-based scanning capabilities can enhance data capture performance.

For example, with the right advanced software capabilities, such as multi-scanning and AR guidance enabled through the device’s camera, scan-heavy operational tasks, such as inventory counting, can be completed 5x faster on handheld computers than single scanning.

Enhancing the performance of what’s already available can often maximize the original investment.

Low-code and no-code smart data capture technology options, can even provide instant, no-integration solutions to enable these gains without using development resources.

Enable a flexible BYOD strategy

Scandit Smart Data Capture can be deployed on over 20,000 device types, delivering unmatched performance even on low-end smart devices, making it ideal for a BYOD strategy.

By enabling employees to use their own familiar smartphones, retailers can significantly reduce the upfront costs of new hardware.

But, high-performance data capture is a must. Anything less and the frustrations of low scanning performance will negate cost-saving hardware benefits.

No matter the size, efficiency gains can add up to amazing business results. This guide has highlighted many ways smart data capture can reduce retail costs and boost efficiency.

Cost reduction using transformative technology doesn’t have to be time-consuming. Our solutions can be easily integrated into different workflows, devices, and new or legacy applications without complex development effort.

Our out-of-the-box solutions make it easy for any retailer to use expertly built user interfaces and AR guidance that further accelerate workflows.

FAQs

What are the main drivers of rising retail costs today?

Rising costs come from wage inflation, higher business rates, supply-chain disruption, and increased security investments.

How can workflow optimization reduce retail costs?

Workflow optimization cuts manual tasks and errors. Automating pricing, inventory, and order picking saves labor hours, improves accuracy, and prevents lost sales.

What compliance risks lead to major fines for retailers?

Common risks include inaccurate pricing, selling age-restricted goods to minors (fines up to $50,000), and expired food sales (Asda was fined over £400,000).

How much food waste comes from retail, and how can it be reduced?

Retail is responsible for 12% of the world’s 1 billion tonnes of annual food waste (UNEP, 2024). Automating markdowns with Smart Label Capture helps prevent waste and recoup lost revenue.

How can retailers reduce scanning hardware costs?

Retailers can replace expensive dedicated scanners with standard smartphones, reducing purchase and maintenance costs. The Warehouse Group cut hardware costs by 3x by switching to smart devices.