How to Reduce Costs in Retail the Smart Way

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 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 gets results.

There are three ways Scandit Smart Data Capture can help retailers reduce costs. Here’s how:

One way to reduce costs is to optimize workflows by improving routine task efficiency, effectiveness and accuracy.

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.

In a recent study, pricing accuracy was an issue on 7.7% of items checked at the till.

Scandit’s price 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.

Case in point:

Office Supplies retailer Staples implemented Scandit leading to time savings of over 80% for employees, 99% price-checking accuracy, and the discovery (and mitigation) of revenue-impacting price inaccuracies.

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.

Deploy MatrixScan Count to 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.

Case in point:

Supply chain solutions provider Agrippa Solutions implemented Scandit to capture multiple barcodes at once, saving 4.5 man hours daily on receiving tasks.

Efficient order picking

According to Shopify, annual global e-commerce sales will hit $6.3 trillion in 2024. 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.

Case in point:

By introducing a smartphone app equipped with Scandit Smart Data Capture, discount supermarket retailer OK Corporation shortened the picking time per item by 60% and reduced the picking error rate to zero.

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

Compliance impacts all retailers. 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 to stay on top of compliance. Here’s how Scandit’s solutions can help:

• ShelfView gives retailers constant shelf visibility and actionable insights. It highlights if a shelf-label price is wrong, helping them avoid regulatory fines for mispriced products.
• ID Scanning: 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.

Case in point:

A retail delivery service provider scanned over 1 million IDs annually for age-restricted goods. During a pilot using Scandit ID Validate, an average of 1% of the IDs were found to be fake, equating to a considerable compliance risk of around 10,000 illegal deliveries to minors.

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 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.

Case in point:

Watch while Juan Vega, Head of Digital Product for Retail, explains how Landmark Group optimized store operations with a cost-efficient BYOD strategy by deploying Scandit Smart Data Capture.

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 that further accelerate workflows.

Contact us to learn how easy it is to make substantial cost savings in your retail stores.