A wise and targeted investment in technology can achieve efficiency as well as cost-reduction. Here are some tactics to follow
Fremont, CA: The U.S. government increased the import tariff in Chinese goods from 10 percent to 25 percent, i.e., $200 billion in May 2019. Apart from food and raw materials for manufacturing, the tariff applies to several retail categories, including appliances, electronics, jewelry, furniture, and watches. The tariff was levied at 10 percent on most of the clothing and shoes imported from China from September 1 this year. The reports from 2018 show that out of total product imported from China, 42 percent ($23.5 billion) accounted for women's and girl's clothing and shoes, and 26 percent ($10.9 billion) consisted of men's and boy's clothing.
Now imagine the burden of this increased tax on the final consumers. It is well predicted that with this increased tariffs, the prices of clothing and shoes will shoot up, leading to consumers purchasing either fewer items or reduce cart size by purchasing lower-quality items. As a whole, it will result in decreasing the revenue for retailers.
Though there is an option of the relocation of offshore production, it doesn't come out to be a fruitful one. The costs, more or less remains the same. The taxes and tariffs are unavoidable. A financially conscious retailer will find out the ways, smarter and better to deal this situation. Yes, you guess it right. That's embracing technology to mitigate the impact of tariffs and create long-term benefits for the brand. A wise and targeted investment in technology can achieve efficiency as well as cost-reduction. Here are some tactics to follow:
• Cloud Migration
The migration of software and data to the cloud can cut down a significant amount of cost, which was otherwise wasted for on-premise hosting and staff for the in-house server. With a state-of-the-art ERP solution, the cloud has proved itself as a secure and reliable computing cost absorber with providing higher operational efficiency.
• Enterprise Resource Planning (ERP) Software
ERP solutions lessen costs through the optimization of stock. It doesn't matter you're upgrading your existing solution or implementing ERP for the first time; an ERP investment can advance your ability to stock the right amount of inventory at the right time. Added features like warehouse management, mobile computing, analytics, purchasing tool, and direct international shipping adds feather to its hat and makes it the first choice of retailers.
• Enhanced automation
Most retailers have already resorted to automation to some extent; however, the tariff increases present a perfect opportunity to discover additional automation targets. Robotics, Barcode scanners, blockchain, automated warehouse conveyors, Internet of Things, and other innovations can bring efficiencies and reduce operating.
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