Just one bad experience can turn a customer off a brand, so retailers have no time to waste when it comes to mastering the personalized, 24/7, omnichannel experiences shoppers expect. Not only must customer experiences be seamless, they also need to be faster than ever before – without breaking the bank.
How can retail businesses deliver great CX while reducing costs along the way? Nearshoring could be the answer, especially in today’s tight labor market.
Nearshoring can bring many benefits to companies when done well, but there are also some pitfalls retailers should recognize 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 neighboring country. This brings various logistical benefits. For businesses based in the United States, most nearshore options will keep outsourced workers in the same time zone as the business, which makes it easier to sync operations and communication.
Having nearshore workers in the same time zone as the business’ headquarters also means those nearshore workers will be in the same time zone as the company’s target demographic and consumer base. And traveling to nearshore partners is much easier than visiting off-shore locations.
2. Culture and language
Working with a nearshore partner often means there are certain cultural similarities and a common language spoken among in-house and outsourced workers. This can help the company provide a more uniform 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 you’re 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.
Among the benefits, many nearshore locations are centralized in metropolitan areas that tend to have strong infrastructure in place – and outsourcing partners are equipped to maximize on 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.
Overall, 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.S.- and Canada-based ones, especially given the wage pressures in today’s labor 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 budgetary cost to your business.
5. Specialized support needs
Keeping things relatively close to home makes it easier for companies to bring in specialized support as needed.
Companies that want to integrate Spanish or Portuguese 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 personalized and customized experiences that will lead to great CSAT and brand loyalty.
Nearshoring in action
When an ecommerce retail company was looking for ways to reduce labor costs during the pandemic, it initially was hesitant to consider nearshoring. The company, a longtime TTEC client, had always supported its customers with U.S.-based onshore teams – it considered that part of its brand identity – but it was becoming more expensive amid growing domestic wage pressures.
We suggested the client explore Mexico as a nearshore option, to mitigate costs while maintaining a high-quality customer experience. Company leaders worried about several perceived challenges – including cultural alignment, accent neutrality, and how customers would react to the change – but decided to move half of their support team to Mexico (the other half remained in the United States, focused on the highest levels of escalation).
The client has seen quick results. Just several months into nearshoring, CSAT and QA scores from the Mexico-based team were nearly on par with those of the U.S.-based associates, and the company’s net savings exceeded 25%.
Get it done with an experienced partner
Shifting part or all of a workforce to a nearshore option can be a daunting prospect, but it doesn’t have to be. Working with an experienced partner like TTEC can help; we have decades of experience helping leading retail brands cultivate loyalty, re-invigorate sales, and stay agile enough to meet evolving customer demands.
An experienced outsourcing partner can also help you decide if nearshoring is the best option. For some, offshore may be a better fit.
Another TTEC client, an ecommerce fitness retail business, also had long considered U.S.-based support a key aspect of its brand identity but new leadership was eager to explore nearshore and offshore options.
With TTEC’s guidance, the brand piloted a team of 50 agents in the Philippines. During the four-month pilot, performance from Philippines-based associates matched or exceeded that of U.S.-based ones and the offshore team introduced the company to new processes and tools. The offshore team now leads all teams in performance and client favor, and the brand is considering expanding its offshore presence.
For brands looking to cut costs, shifting some or all labor to nearshore or other options can be a great way to save reduce labor expenses without sacrificing the high-quality support customers expect.