Outsourced Retail Merchandising Costs: What Businesses Need to Know

Retail merchandising is one of those jobs that can look simple from the outside. Moving stock, filling shelves, changing displays and making sure a store is ready for customers may sound straightforward, but managing these tasks across multiple locations can quickly become expensive and difficult to coordinate.

For retailers, suppliers and brands operating across several stores, outsourced retail merchandising can provide a flexible alternative to employing a permanent in-house team.

But how much does outsourced retail merchandising actually cost, and when does outsourcing make financial sense?

What is outsourced retail merchandising?

Outsourced retail merchandising means using an external company or merchandising team to complete tasks within your stores rather than employing your own permanent staff to carry them out.

Depending on the project, this can include:

• Stock movements and transfers
• Shelf filling and replenishment
• Store merchandising
• Planogram implementation
• Product launches
• POS and promotional display installation
• Store refits and refreshes
• Seasonal merchandising
• Stock counts and audits
• Date checking
• Retail compliance checks
• Reorganising and remerchandising departments
• New-store setup and preparation

The main advantage is flexibility. Instead of maintaining a permanent workforce for work that may only be required periodically, a business can bring in additional support when it is actually needed.

How much does outsourced retail merchandising cost?

There isn't one fixed price for outsourced merchandising. The cost depends on the type of work, the number of stores, the number of workers required, travelling distance, working hours and whether specialist equipment is needed.

A straightforward local merchandising assignment may be charged on an hourly or daily basis, while larger projects involving multiple stores can be priced as a complete project.

Typical factors affecting the final price include:

1. Labour

Labour is usually the largest component of a merchandising project.

The number of workers required and the amount of time needed at each store will have a significant effect on the total cost.

For example, sending one merchandiser to complete a four-hour task will obviously cost considerably less than sending a team of several workers for a full overnight refit.

2. Number of stores

A project involving one store is relatively simple to organise.

However, once a project involves 10, 20, 50 or even hundreds of locations, coordination becomes much more complicated.

An outsourced provider can manage the scheduling and deployment of workers across multiple locations, allowing the retailer to deal with one supplier rather than coordinating every individual visit themselves.

3. Travel

Travel costs can vary considerably depending on the location of the stores.

A local project may require little additional travel expense, whereas a nationwide rollout could involve significant mileage and potentially overnight accommodation.

This is particularly important when comparing an external merchandising company with using existing employees. The cheapest hourly rate isn't necessarily the cheapest overall option once travel time, mileage and other expenses are included.

4. Overnight work

Retail merchandising often needs to take place outside normal trading hours.

Overnight work can be particularly useful for major merchandising changes because customers are not in the store and normal trading is disrupted as little as possible.

However, night work can increase the overall project cost because of higher labour requirements and, where necessary, accommodation.

5. Equipment and materials

Some projects can be completed using equipment already available at the store.

Others may require additional equipment, materials or specialist tools.

Establishing who supplies these items before the project begins can prevent unexpected costs.

Why outsource retail merchandising?

Cost isn't the only reason businesses outsource merchandising.

In many cases, the biggest benefit is flexibility.

Reduce permanent staffing requirements

Retail businesses don't necessarily need a full-time merchandising team all year round.

A company may require substantial additional labour during a product launch, store refit or seasonal change but have considerably less work during quieter periods.

Outsourcing allows businesses to pay for the labour they need without permanently increasing their headcount.

Scale projects quickly

Imagine a retailer needs to update 50 stores within two weeks.

Recruiting, training and scheduling enough temporary employees could take significant time.

An experienced outsourced provider can potentially deploy a team specifically for the project, allowing the retailer's existing staff to remain focused on normal operations.

Free up store staff

Store employees already have their own responsibilities.

Asking them to spend hours moving stock, changing displays or completing a major merchandising project can take them away from customers and normal store operations.

Outsourcing these tasks allows store teams to concentrate on running the store.

One point of contact

Managing a large number of individual contractors or temporary workers can become an administrative headache.

Using one merchandising provider can simplify the process.

Instead of coordinating multiple workers individually, the retailer has a single point of contact for scheduling, project requirements and completion.

Support during busy periods

Retailers often experience significant peaks in workload.

Christmas, seasonal changes, promotional campaigns, new product launches and store refurbishments can all create additional labour requirements.

Outsourcing provides a way to increase capacity without making permanent changes to the workforce.

Access to experienced workers

A specialist retail support company can provide workers who are familiar with working in retail environments.

This can be particularly useful for projects where speed, organisation and consistency are important.

Is outsourced merchandising cheaper than employing staff?

Not necessarily on an hourly-rate basis.

An outsourced worker may appear more expensive than an employee's basic hourly wage. However, comparing the two purely on hourly pay can give a misleading picture.

Employing someone involves additional costs and responsibilities, which can include:

• Recruitment
• Training
• Holiday pay
• Employer National Insurance
• Pension contributions
• Payroll administration
• Management time
• Sick leave
• Employment administration
• Equipment and uniforms
• Periods where there is insufficient merchandising work

With outsourcing, many of these costs are incorporated into the supplier's service.

This means the more useful question isn't necessarily:

"What is the hourly rate?"

It is:

"What is the total cost of getting this work completed?"

When does outsourcing make the most sense?

Outsourcing can be particularly attractive when the work is temporary, irregular or geographically spread out.

For example, it may make sense for:

A product launch

A brand needs displays installed across multiple stores within a short timeframe.

A store refit

A retailer needs additional workers to move stock and reorganise a department.

A seasonal change

Multiple stores need their displays and stock changed before a new season.

A stock movement project

Large quantities of stock need to be moved between locations without disrupting normal store operations.

A nationwide rollout

A business needs the same merchandising work completed consistently across many locations.

What should you ask a merchandising company before accepting a quote?

The cheapest quote isn't always the best option.

Before choosing a provider, consider asking:

• How many workers will be allocated?
• How many hours are included?
• Is travel included?
• Are overnight expenses included?
• Who supplies equipment?
• Will the same team work across the project?
• How is completion reported?
• Can photographic evidence be provided?
• What happens if additional time is required?
• Is there a project manager or single point of contact?
• What areas of the UK can they cover?

Clear answers to these questions can make it much easier to compare quotations accurately.

The bottom line

Outsourced retail merchandising isn't simply about finding the lowest hourly rate.

It is about finding a practical way to complete retail work efficiently, consistently and without creating unnecessary permanent staffing costs.

For businesses with occasional merchandising requirements, multiple locations or projects with tight deadlines, outsourcing can provide the flexibility to bring in additional support exactly when it is required.

Whether the requirement is a single-store stock movement or a multi-store merchandising rollout, getting the scope, labour requirements and associated costs clear from the beginning is the best way to avoid surprises.

Retail support from EXCITY Retail Support

At EXCITY Retail Support, we provide flexible retail support for businesses across Dorset, Hampshire, Wiltshire and surrounding areas.

Our services include stock movements, merchandising, store support, refits and other retail projects.

If you have a retail project that needs additional manpower, getting a clear project-based quotation can be a straightforward way to understand whether outsourcing is right for your business.

Get in touch with EXCITY Retail Support to discuss your project.