Scale Strategies for Physical Stores Require Repeatability and Predictable Costs
Fujitsu / March 18, 2022
The number of viable business strategies for physical store chains is narrowing, with scale emerging as the best long-term option. More stores mean consumers get the proximity they demand to see, try, collect and change goods easily. And retailers gain the scale to source in massive quantities and sell goods at prices that can beat online competitors. It’s a win-win strategy that is defendable in the long term.
But what’s the best way to scale a store network reliably, quickly, and at predictable cost?
To achieve scale, repeatability is the key
When it comes to expanding store networks, retailers want cookie-cutter repeatability and the rapid rollout that it provides. The idea of designing afresh for each location is a non-starter: It only results in higher costs and slower completion times. Why change a winning formula?
Repeatability applies across the board, from planning applications to in-store customer flow. That’s because everything is crucial in retail. And the ability to take payments is very high on the list of must-haves. That’s crystal clear from the work Fujitsu is doing with two global-scale fashion retailers – between them, these retailers have a combined estate of 3,500 outlets across 43 countries. Fujitsu’s role is to provide these two retailing giants with guaranteed reliable repeatability in retail technology, Point of Service (POS) and all the associated IT systems and support services.
Rapid roll-out and repeatability is key for retailers expanding store networks
What’s the most efficient way to master complexity?
International retail technology rollout is hugely complex. Just the fiscal aspects are daunting enough, such as ensuring sales taxes are recorded, collected and paid correctly. Laws and practices vary enormously between countries, and each country has its own rules. In one country Lithuania, for example, the fiscal authorities require retailers to physically send them any new equipment to investigate for certification – a process that typically takes three months. This includes everything, from the POS equipment itself and all peripherals, including things like scanners and printers. Any software change in the three-month approval cycle resets the certification clock to zero.
And in Italy, every time someone comes into a store and buys something, the POS system has to send an online report to the tax authorities. In a third example, Spanish regulations require support for POS systems in several languages: Spanish, Catalan and Basque.
Failure to comply with all these fiscal regulations is a serious matter. Fines can reach 5% of global revenues in certain circumstances and non-compliance can result in imprisonment for managers in those territories where the failure occurred.
Complexity, cost and risk are key reasons why retailers aiming for rapid scale do not attempt to build from scratch every time they enter a new market. The learning curve is too steep and the costs and potential penalties are too high.
