European retailers face numerous pressures and challenges: just one bad experience can turn a customer off a brand and companies are expected to deliver 24/7, personalised, omnichannel experiences faster than ever before — all whilst keeping overhead and labour costs in check.
How can retail businesses cut costs without sacrificing the seamless experiences customers expect? Nearshoring could be the answer, especially in today’s tight labour market.
Nearshoring can bring many benefits to companies when done well, but there are also some pitfalls retailers should recognise as they consider this option. Here are five things to think about as you assess whether nearshoring is right for your business:
1. Location proximity
Nearshoring, by definition, means you’re outsourcing work to a neighbouring country and “neighbouring” need not be nearby. For businesses in EMEA, for example, outsourcing to South Africa or Egypt has great benefits because everyone is working in virtually the same time zone, most of the year. That greatly simplifies and syncs communications and operations. There’s a wide range of cultural affinities, not only with the nearshore team but with customers, too.
2. Culture and language
Working with a nearshore partner often means there are certain cultural similarities and a common language spoken amongst in-house and outsourced workers. This can help the company provide a consistent level of customer support, which leads to better customer experiences and higher customer satisfaction. As an added bonus, high-quality English language support typically is easily scalable, allowing companies to quickly ramp up during times of peak demand.
But for some companies, this may not be enough. Some customers are sensitive to even the slightest cultural misalignments, and no brand wants to alienate its consumers. If your target audience falls into this category, nearshoring may not be the right fit.
3. Infrastructure capabilities
There are pros and cons to nearshoring when it comes to infrastructure.
Amongst the benefits, many nearshore locations are centralised in metropolitan areas with strong infrastructure in place — and outsourcing partners are equipped to fully leverage that high-quality infrastructure, enabling them to meet business needs quickly and easily.
On the downside, nearshoring can expose businesses to new potential security risks. However, as outlined above, outsourcing partners take painstaking efforts to identify the best locations, ensure extensive firewall and security measures, and conduct transparent security risk assessments. Companies considering nearshoring should expect to have these discussions.
Keeping all operations onshore usually means they are more secure, so companies may need to invest additional resources into identifying and preventing new security risks — or they may not want to take on the additional risk nearshoring can bring.
4. Cost considerations
Many assume nearshoring will bring cost reductions to a business, and that’s true — to an extent.
Nearshore solutions are less expensive than U.K.- and European-based delivery, especially given the wage pressures in today’s labour market. The money saved through nearshoring can be reinvested in other facets of the business, and nearshoring can be a great way to drive ROI at a total lower cost.
But it’s important to note that nearshore options are typically more costly than many offshore options. If cutting costs is a primary motivator, offshoring will often yield better results — so consider whether the pros of nearshoring are enough to outweigh the cost to your business.
5. Specialised support needs
Keeping things relatively close to home makes it easier for companies to bring in specialised support as needed.
Companies that want to integrate French and German support with their English-speaking support, for instance, will find they’re able to do so — and scale it — efficiently. This makes it easier for brands to deliver frictionless, more personalised and customised experiences that will lead to great CSAT and brand loyalty.
Working with an experienced outsourcing partner can help you gauge how nearshoring can benefit your brand and whether it’s the right move for your business.
A well-considered nearshoring strategy delivers a powerful return on investment at a lower total cost of ownership. Talk to us about how our motivated, skilled, multilingual teams in South Africa, Egypt, and Rwanda provide an attractive opportunity for high-quality, empathetic customer interactions that improve loyalty and retention.
