Outsourcing. A route to retail growth.

At the moment, cost is a key driver in outsourcing, and, as such, clients consistently trying to cut their costs or losses, means innovation is one of the first elements to be cut by suppliers. Innovation is labour intensive, and therefore, can be expensive.

But, if we are to achieve better growth in 2012 and beyond, companies must not only outsource to cut costs, but make money too. Grabbing some market share is a good as cutting costs; combine the two, you’ve got growth on your hands. It’s an old adage that marketing budgets shouldn’t be cut in periods of recession – not that we’re in a recession. I don’t want to contribute to talking us into a double dip – and, in a way, outsourcing is a marketing strategy when it affects your customers’ experience of your brand.

We are seeing huge growth in the retail sector - EMEA retail outsourcing has risen 600% on last quarter, and 75% year-on-year. (see: TPI EMEA Index 3Q11). Major retail players are looking to streamline their processes, seeking competitive advantage by adopting hi-tech IT solutions and infrastructure upgrades. They are turning to outsourcing providers as a low- risk route to superior technology. Tesco, Argos, Homebase and Poundland all recently made major investments in outsourced technology solutions. This will help them run retail and warehouse operations to maximum efficiency, and improve customer experience. In today’s retail environment, outsourcing is becoming essential. Take up is skyrocketing due to cost-saving drives, and also, as seen in the cases of Argos and Homebase, as a way of delivering targeted marketing campaigns to boost sales. M-commerce or, employing mobile phone technology as channel to sell your wares, will become more and more prominent as the human race evolves to be evermore addicted to smartphones.

So, if you want to grow, and help the economy grow, look to innovate. And to keep the risks minimal? Outsource, of course.