The retail operations marketplace has evolved over the last decade in an opportunistic manner. Buyer demand has primarily addressed traditional IT services and horizontal BPO needs (including customer service, finance & accounting and human resources outsourcing). In the last five years, buyers and service providers have also started to venture into outsourcing retail-unique processes to a limited extent. These include service support for areas such as storefront operations, merchandizing and replenishment, ecommerce channel support (content, web development and customer service) and supply chain processes.
We believe the retail operations market is set for rapid growth in the next 3 years. This will be largely driven by the impact of digital requirements for retailers which will lead them to look for more and more external support. On the service provider side, this is an interesting space to watch because as a relatively new market, these companies can really build differentiated services portfolios by strategically alinging to what we call ‘progressive operations’. As discussed above, buyer needs goes beyond traditional ‘BPO’ delivery, and as service providers carve out their solutions in this space, they have the opportunity to invest in comprehensive analytics led service delivery, process transformation (especially for supply chain and ecommerce engagements), collaborative partnerships and investments with retail clients that bring together modern technology components to impact business outcomes.
