How technology can help retailers achieve growth in 2025
The retail landscape is undergoing a profound transformation, driven by rapidly evolving consumer behaviours and the relentless pace of technological advancement.
As traditional models face mounting pressures—from rising operational costs to shifting spending patterns—retailers are increasingly turning to technology to reimagine their businesses and secure a foothold in the future.
Automation, artificial intelligence, data integration, and other innovations are no longer optional enhancements; they are critical tools for survival in an ever-competitive market. Technology is reshaping how customers interact with brands, from personalised recommendations powered by AI to immersive virtual shopping experiences.
The rise of eCommerce and mobile apps has blurred the lines between online and offline shopping, compelling retailers to adopt omnichannel strategies that integrate digital convenience with the tangible benefits of physical stores.
Meanwhile, supply chain technologies are addressing long-standing inefficiencies, enabling retailers to manage inventory with precision and respond more effectively to disruptions.
How can retailers harness technology not just to survive, but to thrive in a rapidly changing world?
““B2C orders are a sizeable and growing part of our business. All that data is transferred seamlessly between systems by BPA Platform. We are actually using BPA Platform for two-way data flow and that is working perfectly fine. For example, the shipping data from our warehouse is flowing from our ERP to the BPA Platform to Shopify Plus. That’s a very important part of the business for our web orders.” Mansoor Ahmad, IT Consultant, Slendertone
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State of the nation: The problems facing UK retailers in 2025
As we mentioned, UK retailers are grappling with several significant challenges for the foreseeable future, necessitating strategic adaptations to sustain operations in a rapidly evolving market landscape.
Increased operational costs
The government’s recent budget has introduced a set of measures that will impose an additional £2.5 billion burden on the UK retail sector in 2025, intensifying financial pressures on an industry already grappling with tight margins.
Key contributors to this cost increase include a rise in the national minimum wage, which, while benefiting workers, adds significant payroll expenses for retailers, particularly those employing a large workforce in customer-facing roles. Additionally, the increase in employer National Insurance contributions further escalates staffing costs, making it increasingly expensive for businesses to maintain current employment levels.
Another significant policy change is the reduction in business rates relief from 75% to 40%, which places further strain on physical stores that are already struggling to compete with the lower overhead costs of online retailers.
For many high street shops, business rates represent a considerable fixed cost, and the reduction in relief is likely to exacerbate the already precarious financial position of many small and medium-sized retailers.
These increased operational costs are expected to have far-reaching consequences.
Retailers, particularly those with narrow profit margins, will face difficult decisions to remain viable. Many are likely to pass on the costs to consumers through price increases, which could reduce demand, especially in a climate where households are already feeling the pinch from inflation and higher living costs. Others may resort to cutting back on investments in areas such as technology, sustainability initiatives, or staff development, which could hinder long-term competitiveness and innovation within the sector.
Smaller businesses, which often lack the financial cushion to absorb these additional costs, are at a heightened risk of closure, potentially leading to further job losses and a decline in high street vitality. Even larger retail chains may find themselves scaling back operations, closing underperforming stores, or freezing hiring to manage expenses.
Recent statistics have also revealed that retailers are facing even further operational costs derived from the amount of goods being returned following the holiday period, with an estimated 1.5 billion gifts being returned in the UK alone. Not only does this have a detrimental effect on sales, it also ties up resources processing and managing these returns.
““We were looking at integration options between our core ERP system Microsoft Dynamics AX and direct-to-consumer sales channels and courier systems to enable us to streamline the entire order to fulfilment process. When we export goods outside of the UK there is often a lot of paperwork to manage, so having the ability to extract the relevant data from Microsoft Dynamics AX and use BPA Platform to upload the shipment data to the different courier systems allows us to be very efficient at fulfilling orders. We use BPA Platform to transfer sales orders, sync inventory and manage shipments across the different sales channels.” Jonathan Emerson, Head of IT, inov-8
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Shift in consumer spending, store closures and job losses
A major shift in consumer spending patterns is reshaping the retail landscape in the UK, with profound implications for high streets and traditional retailers.
The rise of online shopping has significantly diverted expenditure away from brick-and-mortar stores. The convenience, competitive pricing, and extensive product selection offered by eCommerce platforms have captured a growing share of consumer wallets. This trend was accelerated by the pandemic, which not only normalised online purchasing but also fostered a preference for the ease and immediacy it provides.
Simultaneously, as consumers increasingly prioritise experiences over material goods, spending is being redirected towards sectors such as travel, dining, entertainment, and wellness services. This behavioural shift is driven by changing values, with many people placing greater importance on creating memories and engaging in activities rather than acquiring possessions.
The combined effect of these factors has resulted in a significant decline in footfall on high streets.
Once the bustling hubs of commerce and social interaction, high streets are now struggling with reduced customer traffic, which is a direct blow to the profitability of physical retailers.
Independent shops and small businesses, which rely heavily on consistent foot traffic, are particularly vulnerable. Larger retailers, though more resilient, are also feeling the pinch, leading to store closures and a revaluation of their physical presence. Additionally, even larger retail chains are reassessing their physical presence, consolidating operations, and pivoting towards eCommerce to remain competitive.
The trend of store closures and job losses in the UK retail sector is escalating at an alarming rate. According to the Centre for Retail Research, approximately 17,350 high street stores are projected to shut their doors in 2025, marking a substantial increase from the already troubling 13,000 closures recorded in 2024. This steep rise reflects the intensifying pressures on brick-and-mortar retailers, driven by a combination of factors such as declining footfall, shifting consumer behaviours toward online shopping, and the challenges posed by rising operational costs.
The ripple effects of these closures are profound, with over 200,000 job losses anticipated across the sector. This not only places immense financial strain on affected workers and their families but also further weakens the economic vitality of local communities reliant on retail as a key employer.
The shift in consumer spending is also reshaping consumer expectations, with shoppers increasingly seeking seamless and engaging experiences when they do visit physical stores. Retailers that fail to adapt to these evolving demands risk becoming obsolete. Many have begun experimenting with hybrid models that integrate digital and physical retail, such as click-and-collect services, augmented reality shopping experiences, and in-store events, to draw customers back.
To combat these challenges, traditional retailers must adapt by focusing on differentiated in-store experiences, utilising technology to offer personalised services. Without such efforts, the shift in consumer spending patterns may continue to erode the presence of physical retail, altering the face of UK commerce for years to come.
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Supply chain challenges
On top of all of the above, supply chain challenges continue to rank among the most pressing issues for UK retailers in 2025, as persistent disruptions create operational bottlenecks and financial strain.
Factors such as global shipping delays, geopolitical tensions, and increased regulatory requirements post-Brexit have compounded the complexity of managing supply chains. These disruptions have led to delayed deliveries, forcing retailers to deal with stockouts of popular products and missed sales opportunities.
Additionally, inventory shortages have left businesses struggling to meet customer expectations, eroding trust and potentially driving shoppers to competitors with more reliable stock availability.
The lack of visibility into inventory is something that some retailers cite as an ongoing issue within their business, which is something we will explore later in this blog.
The financial toll of these challenges is significant, with nearly one-third of mid-sized businesses projecting that they will require external financial support to manage the rising costs associated with supply chain issues.
These costs include higher prices for raw materials, expedited shipping fees to meet deadlines, and investments in technology or alternative suppliers to mitigate risks. Many businesses are also facing increased warehousing expenses as they try to maintain higher levels of inventory to avoid stockouts, which puts further pressure on cash flow.
Small and medium-sized enterprises (SMEs) are particularly vulnerable, as they often lack the financial resilience and bargaining power to absorb these increased costs or negotiate favourable terms with suppliers. However, even larger retailers are not immune; they face challenges in coordinating global supply chains and managing unpredictable disruptions, such as extreme weather events, port congestion, or supplier insolvencies.
The knock-on effects of these supply chain difficulties extend beyond financial metrics. Retailers are experiencing reduced operational efficiency, which can impact everything from store inventory levels to customer satisfaction. The unpredictability also complicates planning for key trading periods, such as seasonal sales or holiday shopping, where delays can lead to significant losses in revenue.
Addressing these challenges requires retailers to adopt proactive strategies, such as diversifying their supplier base, improving the visibility into their data, investing in advanced supply chain technologies like AI-driven demand forecasting, and collaborating with logistics providers to build more resilient networks.
“We moved our dot.com business from our warehouse in King’s Lynn, to a third-party logistics (3PL) company in Milton Keynes. We now send all of our dispatch data down to the 3PL and they distribute it for us”, “Humans aren’t really involved anymore. All someone does is load an order onto the system to send stock down to the 3PL, and the rest is channelled from the website. No one touches anything. An order comes down from the website into SYSPRO, passes through the system, and then goes through BPA Platform to their system. When the order is dispatched, all of the data is returned and automatically posted into SYSPRO by BPA Platform and the SYSPRO connector. We’ve probably automated in the region of 80-90% of the system, from order entry through to the customer getting it.” Tim Petts, IT Manager, Sealskinz
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Internal issues retailers need to address
On top of the economic and industry issues that businesses are facing, many retailers have recognised that their internal processes need addressing to improve efficiency, cut costs and streamline operations.
Heavy reliance on manual processes
One of the key issues for many retailers is their continued reliance on manual processes, especially in key areas such as order management, eCommerce and supply chain management, with many only having automation in a few critical areas.
While manual operations have traditionally formed the backbone of retail businesses, their limitations have become increasingly apparent as the industry evolves. These limitations underscore the need for modernisation and automation to address both current inefficiencies and future growth opportunities.
One of the primary issues with manual processes is their inherent inefficiency. Tasks such as data entry, order processing and supply chain management require considerable time and effort when performed manually. Employees must dedicate hours to repetitive tasks that could otherwise be streamlined with technology, reducing productivity.
The lack of real-time data availability is another significant concern. Manual processes often fail to provide the immediacy and accuracy needed for informed decision-making. Retailers must rely on periodic reporting, which can be outdated by the time it reaches decision-makers.
This hinders the ability to respond swiftly to changing market demands, seasonal trends, or supply chain disruptions. By the time actionable insights are derived, the opportunity to optimise pricing, promotions, or stock levels may have already passed, leading to lost revenue and competitive disadvantage.
“Every invoice we received from a customer meant we had to manually input it into SYSPRO, which not only takes a lot of time, but also increases the risk of mistakes. It would take five people to type in the orders every Monday morning. We therefore realised it was mandatory for us to implement some sort of automation because we relied on so many people to input our orders and to invoice everything.” Nicolas Wendling, Director of Operations, ATTITUDE
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Another major drawback of manual processes is the high risk of errors. Human input is naturally prone to mistakes, which can lead to inaccurate inventory records, pricing discrepancies, or incorrect order fulfilment. These errors not only result in financial losses but also negatively impact customer satisfaction and trust.
For instance, an online order that is shipped incorrectly due to a manual entry error can frustrate customers and harm a retailer’s reputation. Additionally, correcting these errors often requires further manual intervention, exacerbating the inefficiency.
Furthermore, the reliance on manual processes hampers scalability. As retailers grow and expand, the volume and complexity of operations increase exponentially. Manual systems simply cannot keep pace with the demands of larger inventories, multiple sales channels, or diverse customer bases.
Scaling up requires a proportional increase in labour, which is not only costly but also unsustainable in the long term. Retailers stuck in this paradigm struggle to achieve economies of scale, limiting their potential for growth.
The rigidity of manual processes also limits innovation. Retailers often find themselves bound by the constraints of outdated systems that do not allow for experimentation or adaptation. For example, implementing advanced customer personalisation strategies or utilising data analytics for predictive insights becomes nearly impossible without automated systems. In a competitive landscape, the inability to innovate and adapt quickly to consumer preferences can leave retailers behind.
Lack of inventory visibility
Another key issue that retailers have recently cited as being detrimental to their business is the lack of visibility into their inventory, which makes it difficult to respond to customer demand and prevent stockouts.
The Supply Chain Trends Report 2024 by TrueCommerce found that 47% of respondents cited inventory discrepancies as a major disruptor to order management and supply chain inefficiencies, with returns/reverse logistics issues due to the growth of eCommerce and omnichannel retail leads affecting 46%.
What are the risks of lack of inventory visibility?
Insufficient inventory visibility presents numerous risks that can disrupt business operations and erode profitability. One significant issue is the occurrence of stockouts, which happen when businesses run out of popular products due to poor tracking. This leads to lost sales and drives customers to competitors, damaging brand loyalty.
Conversely, poor visibility can also result in overstocking, where businesses over-purchase inventory as a precautionary measure. Excess stock ties up valuable capital, increases storage costs, and risks becoming obsolete or spoiled.
Operational inefficiencies are another common consequence of inadequate inventory tracking. Businesses may face delays caused by manual inventory checks, duplicated orders, or difficulties locating products, all of which waste time and resources. These inefficiencies often trickle down to the customer experience, leading to delayed shipments, cancelled orders, or incorrect deliveries. Such errors harm customer satisfaction and the company’s reputation.
A lack of visibility also drives up operational costs. Emergencies like last-minute restocking or expedited shipping, often necessitated by inventory mismanagement, are significantly more expensive than planned operations.
“When orders are placed, we have very little involvement until it produces a picking list to the warehouse. This includes all the product locations of where everything is. We then pick everything, enter the order number into our Sage 200 system and it prints out the appropriate delivery label. It also creates a new account for any new customers. The synchronisation of stock is the most important thing for us, because over selling is a big no, no. With everything now integrated, BPA Platform will send us notifications about our stock levels, whether this is low levels, out of stock or reorder levels. These are then posted back onto the website by BPA Platform – updating the stock in date from the manufacturer’s purchase order.” Chris Booth, Managing Director, Graphics Direct
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Moreover, storing excess inventory adds further financial strain. Supply chain disruptions are another consequence, as inventory mismanagement in one area can create a ripple effect throughout the supply chain. For example, inaccurate forecasts may result in supplier under delivery, causing production delays downstream.
Additionally, unreliable inventory data affects critical business functions such as procurement planning and budgeting. Without real-time updates, businesses cannot make accurate forecasts, increasing the risk of financial losses.
Finally, businesses with limited inventory visibility face challenges in scaling. Expansion into new sales channels, markets, or product lines requires a high degree of agility and precise inventory management, which is unattainable without accurate tracking.
Addressing these risks is vital to protect a business’s operational efficiency, financial health, and long-term growth potential.
How can you increase stock visibility?
Improving inventory visibility involves adopting tools and practices that enable accurate, real-time tracking. Here are some strategies businesses can use:
- Implement inventory management software: A robust inventory management system centralises data, automates processes, and provides real-time updates across all locations and channels.
- Adopt cloud-based solutions: Cloud-based systems allow businesses to access and update inventory data from anywhere, ensuring transparency and collaboration among teams.
- Integrate systems across departments: Connecting inventory management tools with Enterprise Resource Planning (ERP), Warehouse Management Systems (WMS), and Customer Relationship Management (CRM) platforms eliminates data silos and enhances decision-making.
- Share real-time data with employees: Making inventory data accessible to employees, including sales and customer service teams, ensures alignment and avoids miscommunication.
- Collaborate with supply chain partners: Sharing inventory data with suppliers, manufacturers, and distributors ensures alignment and improves efficiency. Vendor-managed inventory (VMI) systems, for example, let suppliers monitor and replenish stock directly.
- Incorporate predictive analytics: Advanced analytics and artificial intelligence tools can analyse historical data to predict demand trends, enabling businesses to stay ahead of fluctuations.
Implementing these approaches will enable businesses to achieve higher transparency, reduce operational risks, and improve overall efficiency. Greater inventory visibility not only enhances internal processes but also strengthens relationships with customers and partners, fostering long-term success.
Fulfilment bottlenecks
Managing delivery times and shipping costs are some of the biggest challenges facing retailers, with many stating that they impact customer experience and profitability.
Order fulfilment is a critical process for retailers, involving a series of interconnected steps to ensure that customers receive their products on time and in good condition.
However, despite technological advancements and streamlined processes, bottlenecks in this system persist, hindering efficiency and impacting customer satisfaction.
What are the bottlenecks in the order fulfilment process?
As we have already explored, one common bottleneck in the order fulfilment process is that retailers often struggle with maintaining accurate inventory levels, which can lead to stockouts or overstocking.
Another significant bottleneck occurs in the picking and packing phase. This step requires warehouse staff to locate, retrieve, and package items for shipment. Inefficiencies in this process can result from poorly organised warehouse layouts, insufficient staff training, or reliance on manual processes instead of automated systems. Manual packing processes are prone to errors, such as selecting the wrong items or inadequate packaging, leading to additional costs and potential returns.
Shipping and logistics represent another critical area where bottlenecks emerge. Once an order is packed, ensuring its timely delivery to customers involves multiple stakeholders, including couriers and third-party logistics providers. Providing these services with the correct information is essential to ensure this happens.
However, what really creates these bottlenecks in the order fulfilment process is the reliance on outdated technology and systems. Many retailers still depend on legacy systems that are unable to handle the complexities of modern eCommerce operations. These systems may lack integration capabilities, resulting in data silos where information is not shared effectively between departments.
For example, if sales, inventory and shipping data are not synced in real time, it becomes difficult to track orders accurately or anticipate potential delays. This lack of visibility and coordination can create a ripple effect, causing inefficiencies across the entire fulfilment chain.
“Options has worked well for French Connection for many years, but the solution did not integrate with Shopify Plus. Options manages the management and fulfilment of orders received by our eCommerce sites and subsequently feeds into our ERP systems, so it was vital that our new sites were integrated into the same systems.” Vim Juneja, Global Head of IT, French Connection
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Customer communication also plays a crucial role in the order fulfilment process, and breakdowns in this area can act as a bottleneck. When customers place orders, they expect timely updates regarding the status of their purchase. Retailers who fail to provide clear and accurate information about order processing, shipping timelines, or potential delays risk losing customer trust. Poor communication often stems from insufficient automation or a lack of robust customer relationship management systems.
Labour shortages and seasonal demand spikes further compound bottlenecks in order fulfilment. During peak shopping periods, such as holidays or promotional events, the volume of orders can overwhelm existing resources. Retailers may struggle to scale their operations quickly, leading to delays in processing and shipping. Inadequate workforce planning or insufficient temporary staffing during these periods can strain operations, affecting the overall customer experience.
Additionally, returns and reverse logistics pose a unique challenge for retailers, acting as a bottleneck in their own right. Managing returns requires processing returned items, assessing their condition, and determining whether they can be restocked, refurbished, or disposed of. This process is often labour-intensive and time-consuming, diverting resources from fulfilling new orders. If not managed efficiently, returns can create backlogs, impacting warehouse operations and delaying other stages of fulfilment.
Lastly, the rise of omnichannel retailing has introduced new complexities that can exacerbate bottlenecks. Customers now expect seamless integration between online and offline channels, such as the ability to buy online and pick up in-store (BOPIS). Fulfilling these expectations requires sophisticated coordination between systems, inventory, and staff, and any misalignment can lead to inefficiencies.
Addressing these bottlenecks requires a comprehensive approach that combines technology adoption, process optimisation, and strategic planning. By identifying pain points and implementing solutions such as automation, real-time data integration, and scalable systems, retailers can enhance their order fulfilment processes, improve customer satisfaction, and maintain a competitive edge in the marketplace.
How technology can help retailers in 2025
As you may have garnered from reading this article, technology can play a significant role in combatting the pain points that we have addressed.
In fact, a recent report by PwC declared that: “Retail technology has the potential to unlock profitable growth across the value chain, while serving as a source of differentiation for retailers and brands.”
The other standout point that has arisen from this article is that implementing integration and automation are strategic imperatives for retailers. This viewpoint is backed up by a McKinsey & Company report that was published recently.
Integration, at its core, involves connecting disparate systems, applications, and data sources to create a cohesive digital ecosystem. Retailers often rely on various software solutions for inventory management, customer relationship management (CRM), sales, eCommerce, and point-of-sale (POS) systems. When these systems operate in silos, it leads to inefficiencies and data inaccuracies.
Integration platforms eliminate these silos by enabling real-time data sharing and communication across systems, ensuring that all touchpoints reflect accurate and consistent information.
Process automation builds on this integrated framework by using technology, such as BPA Platform, to handle repetitive and time-consuming tasks with minimal human intervention. Tasks such as order processing, inventory replenishment, and customer inquiries can be automated, freeing employees to focus on higher-value activities.
Automation enhances operational efficiency by reducing manual errors, speeding up workflows, and ensuring consistency in processes. For retailers, these efficiencies translate into tangible benefits, such as faster order fulfilment, better inventory management, and more personalised customer experiences.
“The main thing that BPA Platform is doing is automatically pulling through all of the new direct consumer orders from the website into SYSPRO. From an admin perspective, that has removed a lot of the manual work that was occurring, especially as it is a two-way process in terms of the information we are managing. Previously we were just processing a couple of large orders a week. However, the new website is generating 200-250 orders a month on average. So you can imagine what that workload would be like if our admin staff were having to manually put those through every time. Everything is just more cohesive and it takes away the opportunity for any potential error.” Fenella Brown, Marketing Manager, United Pacific Industries
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One of the most pressing pain points for retailers is managing inventory effectively. Overstocking ties up capital and storage space, while understocking results in missed sales opportunities and dissatisfied customers. Integration and automation address this issue by enabling real-time inventory tracking across channels.
For instance, and integration platform can analyse sales data from POS terminals and eCommerce platforms to predict demand patterns and trigger automated reordering processes. This ensures optimal stock levels, reduces waste, and minimises the risk of stockouts. Retailers can also automate inventory audits and stock counts, saving significant time and labour while maintaining accuracy.
Customer experience is another critical area where integration and automation can make a significant impact. Modern consumers expect seamless, personalised interactions across multiple touchpoints, whether they are shopping online, in-store, or via mobile apps.
Disconnected systems make it challenging to provide this level of service, leading to frustration and churn. Integration enables retailers to consolidate customer data from various sources, such as purchase history, browsing behaviour, and loyalty programs, into a single view. This unified data can then be used to deliver tailored recommendations, targeted promotions, and consistent experiences across channels.
Automation enhances this personalisation by enabling real-time responses to customer needs. Chatbots, powered by artificial intelligence (AI), can handle common customer queries, such as product availability, shipping details, or return policies, without requiring human intervention.
These bots not only improve response times but also operate 24/7, ensuring that customers receive support whenever they need it. Automation can also be used to send personalised follow-up emails or notifications based on a customer’s recent interactions, such as reminding them of an abandoned cart or suggesting complementary products to their recent purchase.
Retailers also grapple with the complexities of supply chain management, where delays, inefficiencies, and lack of visibility can disrupt operations. Integration plays a vital role in creating a connected supply chain, where data from suppliers, warehouses, and distribution centres flows seamlessly.
Retailers can gain real-time insights into shipment statuses, inventory levels, and supplier performance, enabling them to make informed decisions and respond quickly to disruptions. Automation further optimises the supply chain by automating tasks such as order tracking, invoice generation, and demand forecasting. Predictive analytics powered by AI can identify potential bottlenecks or risks in the supply chain, allowing retailers to address them proactively.
Operational costs are a significant concern for retailers, particularly in an era of rising expenses and thinning margins. Manual processes are not only time-intensive but also prone to errors that can lead to costly consequences. Automation reduces these costs by streamlining workflows and eliminating redundancies. For example, automated payroll systems can handle employee scheduling and compensation, while automated marketing tools can execute campaigns with precision and scale.
Finally, the ability to scale operations is essential for retailers looking to expand their footprint or adapt to market changes. Integrated systems and automated processes provide the agility needed to scale efficiently. Whether it’s launching new stores, expanding eCommerce capabilities, or entering new markets, these technologies ensure that systems and processes can handle increased volumes without compromising quality or efficiency.
For example, an integrated eCommerce platform can automatically sync product listings, prices, and inventory across multiple regions, while automated fulfilment processes ensure timely delivery regardless of order volume.
In conclusion, integration and process automation offer retailers powerful tools to address their most pressing challenges. By breaking down silos, streamlining operations, and enhancing customer experiences, these technologies enable retailers to operate more efficiently, reduce costs, and stay competitive.
As consumer expectations continue to rise and the retail landscape grows more complex, the adoption of integration and automation are crucial for long-term success.
For more information on the benefits of data integration or business process automation, and how they can help your retail business improve efficiency and achieve growth, download the brochure below or call us on +44(0) 330 99 88 700.