Exposing the Myths of Retail Outsourcing

In the highly volatile retail sector, where consumer spending is influenced by many external factors outside a company’s control, the flexibility, cost efficiency, and transparency of outsourcing certain functions, such as merchandising and field marketing, can bring a wealth of benefits.

There’s an assumption that outsourcing comes at a cost.  That the business will not be in control, that it is more expensive than deploying an in-house team, and that it is simply easier to just ‘do it ourselves’. Yet in the highly volatile retail sector, where consumer spending is influenced by many external factors outside a company’s control, the flexibility, cost efficiency, and transparency of outsourcing certain functions, such as merchandising and field marketing, can bring a wealth of benefits. 

CROSSMARK’s director of client service Anthony Di Francesco, shares his five common misconceptions about outsourcing and explains how debunking these myths could be the key to surviving and thriving in the retail sector.

Myth 1: Outsourcing is more expensive

One of the most common myths is that outsourcing merchandising field staff is expensive.  However, many companies fail to look beyond the agency’s costs which include indirect costs of labour such as field operations support and technology.  If a financial analysis is undertaken, companies are usually pleasantly surprised at the cost savings that are gained from outsourcing, particularly for those with seasonal products as outsourcing offers scalable solutions that can be tailored around the company’s needs.  

Myth 2: An agency won’t understand my business

Just as a soap manufacturer knows everything about the research, development and production of soap, a retail merchandising company has its core function specialising in retail experience that can add value across a number of levels. Companies should consider whether the business would benefit from focusing its internal resources on things like product development and outsource retail specific functions to a field marketing agency that can leverage its team of experts to help drive in store sales.

Myth 3: Agencies won’t build meaningful relationships with retailers

When it comes to retail, relationships can be crucial to getting stock ranged and on-shelves.  Field merchandising teams manage multiple brands, scheduling multiple store visits and focus on fostering strong relationships with store staff at all levels from store managers to the category buyers and warehouse managers. As Mr Di Francesco explains, the value in this cannot be underestimated, noting that leveraging relationships through an agency can actually be a huge selling point for outsourcing. 

“Our team are in stores multiple times a week, which means we’re meeting with everyone from the store manager to the warehouse staff for longer to represent all our partner brands. For example, Bill in the back dock knows we represent X brand and we’ll tell him to look out for Y brand’s promotion that’s coming in next week. The amount of face time we’ve had with the store staff already means brands can tap into these existing relationships and hit the ground running,” notes Di Francesco.

Myth 4: In-house teams are more efficient

The perception that agency staff are not as hard working as an in-house team couldn’t be further from the truth.  A good agency has an obligation to be transparent and will prioritise accountability and efficiency due their desire to maximise their clients’ ROI. Companies who are concerned about team accountability should check what parameters the agency places around project timelines and staff shifts. For example, CROSSMARK is particularly stringent and uses its bespoke real-time software to ensure jobs are completed with live, unvetted and transparent reporting complete with photos. 

Myth 5: Agencies don’t consider long term sales strategies

Finally, one of the most valuable ways brands can benefit from a field agency’s retail marketing expertise is by asking the agency for input when developing sales and marketing strategies. While agencies can certainly provide short-term solutions by filling staff gaps during the Christmas rush, their expertise adds great value when they are invited to work alongside clients. The greatest advantage can be through collaboration and alignment with the brand’s future retail strategy. The data analytics extracted from an agency’s field reports and in-store observations can offer data-driven insights when developing long-term sales strategies. 

With retailing currently such a challenging sector, it’s critical that brands use whatever tools they can to optimise sales and (contrary to many industry myths) field marketing agencies are one of the most effective tools available. With access to world class technology, extensive experience and knowledge in retail marketing, agencies are well placed to help brands achieve peak performance in retail.

We simply love retail - to see how we can help your business or start a conversation about the retail landscape, please feel free to contact us via email or on +61 2 9439 1233.

Anthony Di Francesco

Anthony Di Francesco

Ant's divisions specialise in merchandising, field sales and experiential brand ambassadors. Anthony has developed his career off the back of 15 years of experience in retail, sales and marketing, working with clients to ensure first-class results are achieved whilst innovating best practice solutions with his team. His divisions work with a diverse mix of brands and retailers ranging from small Australian players to global market-leading brands.