What are 3PL Retail Services?
3PL (or third-party ) retail services refers to the process of outsourcing your retail operations to an independent company that offers end-to-end solutions for consumer goods brands that operate brick-and-mortar stores. 3PL retail services providers can manage everything related to retail operations, from store design and layout, to inventory management, merchandising, staffing, training, sales, and customer service. By outsourcing these functions to a 3PL retail services company, brands can focus on their core competencies, such as product development, marketing, and distribution, while leaving the retail operations management to the experts.
Why Hire a 3PL Retail Services Company?
Hiring a 3PL retail services company to manage your consumer goods brand can help you realize results you likely couldn’t on your own.
Here are four reasons to turn to 3PL retail services providers:
Reason #1: Optimize Your Store Performance with Retail Operations Management Specialists.
3PL retail services companies have extensive experience and knowledge in running retail operations efficiently and effectively. They can help you optimize your store layout, inventory levels, replenishment cycles, pricing strategies, and promotions and know which levers to adjust for your business to maximize your sales and profitability. They can also leverage their network of suppliers, vendors, and partners to reduce your costs and ensure brand quality and consistency.
Reason #2: Eliminate Your Labor Concerns with Retail Hiring Expertise.
3PL retail services companies specialize in managing the hiring process for your store staff, from screening and interviewing candidates, to conducting background checks and reference checks, to onboarding and training new hires. They can also manage the payroll, benefits, and performance evaluation of your employees, as well as handle any issues or disputes that may arise. This allows you to save time and resources, insulates you from the headaches caused by a very real retail labor shortage, and ensures that you have a qualified and motivated team that represents your brand well.
Reason #3: Ensure Your Sales Performance with Retail Sales Specialists.
3PL retail services companies can help you boost your sales by empowering your store staff with the necessary skills and tools to sell your products effectively. They can train your employees on product knowledge, sales techniques, upselling and cross-selling, and customer loyalty programs. They can also monitor and analyze your sales data and provide you with feedback and recommendations to improve your sales performance and conversion rates.
Reason #4: Keep Customers Connected to Your Brand with Customer Experience Expertise.
3PL retail services companies can help you enhance your customer experience by ensuring that your store staff delivers excellent service and support to your customers. They can train your employees on customer service best practices, such as greeting and engaging customers, listening, and understanding their needs, providing solutions and alternatives, and following up and thanking customers. They can also implement customer satisfaction surveys, mystery shopping, and customer feedback systems, and use the results to improve your service quality and customer retention.
3PL: A Case Study
So, what does it look like to engage a 3PL retail services company? Last year, we assumed retail operations for a global candy manufacturer, who determined their current 3PL retail partner wasn’t fully invested in the success of their destination experience store in Times Square in New York City. Faced with high staff turnover yet not wanting to assume retail operations themselves and given our demonstrated track record of retail success and deep experience doing so for other global brands, they engaged MarketSource. Their goal was to enhance the guest experience, increase sales, and reduce staff turnover by connecting customers with their lifelong memories associated with the brand.
“I can certainly recommend MarketSource because of their incredible, incredible ability to understand our brand and to bring it to life within the New York City marketplace. If there is a company out there that is looking for a retail partner who has an incredible depth of retail experience, has the ability to elevate the employee proposition within their store and learn their brand and bring their brand to life within the retail space, MarketSource is a tremendous partner.” – Steve B., Senior Manager, US Retail
MarketSource assumed responsibility for all store functions, including a limited food service café. While our client maintained oversight for store creative and merchandising, our team handled all day-to-day operations, including:
- Recruiting
- Optimizing staff scheduling using our proprietary workforce management/employee experience platform, REPFirst™
- Providing strategic, data-driven retail recommendations
- Accurate merchandising/auditing/inventory
- Marketplace research and analytics
Before engaging MarketSource, the store wasn’t performing to our client’s expectations. Since engaging MarketSource, the client has consistently exceeded their quarterly sales goals. Year-to-date sales are now 118% percent of goal and have increased 129% year-over-year. The store is on track to experience a record year in sales overall. Staff retention has also improved, and that has enabled the development of career laddering and succession planning to ensure ongoing growth opportunities for employees. Read the full case study.
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Author: Carlo Hanna
Carlo is a Retail Practice Lead and Solutions Architect and previously led the MarketSource Reporting and Analytics team. Prior to joining MarketSource, Carlo held several executive leadership positions within corporate retail organizations in charge of multiple teams, including Director, Inventory Management for Chico’s FAS Inc. and Global Director, Inventory Planning for American Eagle Outfitters. He also provided consulting services for Aptos Retail Solutions.
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