We are witnessing proliferation of vendors in almost every segment possible in the offshoring space. While the large segments such as banking, financial services and insurance have been the pioneers, the retail biggies are not far behind in the race.

• Tesco, UK-based international grocery and general merchandising retail chain has set up a back office, Hindustan Service Center in Bangalore. The company had recently increased its headcount from 1,300 to 2,000 people.
• Target, a US-based retailer has a captive center in Bangalore and is planning to increase its 180 strong center.

Services Outsourced

Traditionally, retailers started by outsourcing and offshoring their IT functions and have gradually embraced BPO. Typically, a retailer will look at improving the level of customer satisfaction, which means offering better service to the customer while keeping the expenses in check. Amongst the BPO services, customer relationship management is the most commonly outsourced function. However, HR and F&A services have gained popularity among the outsourcers. BPO services outsourced in this space include:

• Customer support services: handling customer queries, taking orders, telemarketing and managing multi-channels
• Finance and accounting: accounts receivable, accounts payable, inventory accounting, invoice clearance, reconciliation, etc
• HR services: recruiting, compensation, HR administration, payroll, benefits, and training
• Other services: market research and analytics

Vendors

Outsourcing service providers in this vertical are typically large generic BPOs. Global giants such as IBM, Deloitte & Touche, and Accenture rule the roost in IT outsourcing while Infosys, Wipro Infotech and iGate are amongst the many Indian vendors serving this segment.

Some of the more prominent third party vendors offering

There is increase in momentum not only in HR and F&A services but also services such as market research and retail analytics. Analytics provides the retailers an insight into buying patterns of shoppers and give retailers valuable information about products, pricing and distribution. While large BPOs such as WNS, vCustomer and Intelenet are offering this service, there are several analytics BPOs such as Evalueserve, Manthan and Integrated Retail who offer retail analytics.

Future Outlook

Retail outsourcing will gain further momentum as the offshore vendors mature. Though most large BPOs already offer a range of services to this vertical, going forward, they are likely to widen their range of offerings adding business intelligence / customer analytics.

With growing competition, retailers are adding new channels such as the Internet and telemarketing to sell their products. The accent of outsourcers is gradually shifting from "shaving costs" to "working smarter and staying ahead of the competition". This trend will take offshoring from offering varied services at a lower cost to delivery of integrated services that "create value".