How Tool Consolidation Cuts Expenses While Driving Revenue

Consolidation: A Key Trend In Retail Operations

Many of today’s large retail organizations are focused on becoming leaner and more agile. After mixed results over the past couple of business quarters, retailers are entering the next quarter with the hope of driving stable growth quickly, and for many, the clearest path to that will be cutting costs.

“By trimming expenses,” wrote the Wall Street Journal recently, “some finance chiefs are freeing up cash for growth plans, as they also face growing resistance to the fevered price increases that began with the pandemic.” Indeed, for many retailers facing an uphill struggle, growth problems stem from low and middle-income earners who are less likely to buy consumer goods.

On the employee side, higher attrition rates generally result from a combination of factors, such as more competing opportunities in the gig economy, outdated frontline experience, and a low unemployment rate. At the same time, there are elements in companies’ earnings reports that are under their direct control, and expenses are one of those elements.

Tool Consolidation And Digital Strategy

As retailers proceed down the road of cost-cutting, they will no doubt wonder: what do we do about technology? The tools retailers use for corporate headquarters as well as stores often prove costly while not delivering direct bottom-line value, and so are placed on the chopping block straightaway. Yet instead of cutting tools from their tech stack entirely, retailers should consider the benefit of bringing tools together under a unified system.

One particularly useful methodological approach for cost-cutting in this regard is “tool consolidation.” This formerly obscure term is becoming en vogue; according to a CIO article late last year, 95% of IT executives they surveyed are planning to consolidate tech tools over the next 12 months.

What is tool consolidation, and how does it work? It means thinking through digital strategy to ensure that the organization’s technological tools are contained in a single platform and offered by a single vendor—at least, as much as is feasible. Tool consolidation involves working, usually with a CIO or other in-house digital strategists, to make sure that the technologies the company relies on are centralized and unified.

Two Impacts At Once: Cutting Costs And Boosting Revenue

When a company consolidates tools into, ideally, a single platform provided by a single vendor, this means saving on administrative costs, licensing fees, integration payments, and ongoing training and maintenance for manifold systems. Yet this is not only about saving. Tool consolidation also helps produce value.

Imagine a sales associate whose every tool is in one easy-to-use platform they can access from their mobile device. This naturally makes it easier to perform tasks, with less time spent switching between systems and a smaller learning curve—after all, they must only become proficient in one system, with multiple branching tools contained under one umbrella.

Another way to think about tool consolidation is that it has two sides: cost-cutting and revenue-boosting, effectively doing more with less. Tool consolidation cuts costs and creates efficiencies by consolidating tools under one platform, requiring less frontline training on how to use multiple apps, and demanding that the company juggle fewer tech vendors.

On the other hand, tool consolidation boosts revenue by centralizing the retail experience in a single platform and driving retail sales enablement via one unified data stream. As sales associates and their managers take actions in their roles, these actions work to further personalize the recommendations and to-dos surfaced for them by the single platform.

Previously, multiple tools would have had to talk to each other, resulting in many impactful actions getting lost in the shuffle, in addition to lost productive time from employees having to switch between apps. Now, fewer tools mean that employees save time (and HQ does too, by having to deal with ideally only one main vendor), but that their experience of that platform is even more richly personalized so that each action they take is as informed and specific to them as possible.

Real-World Data Supporting Tool Consolidation

Concrete data-based results bear out the truth that tool consolidation not only cuts costs but drives KPIs. For their latest sales force report, industry analysts studied how tool consolidation affected retail employees, their engagement, and productivity, upon the tool consolidation.

Through extensive data analysis, they evaluated companies that started with only Learning and Development tools and then consolidated sales incentives tools with those. They found that this consolidation drove up to 26% more employee engagement and a 30% growth in sales in the first six months after consolidating the sales incentives tools (along with the Learning and Development tools) in one interface.

Companies that started with both sets of tools together, so that data flowed automatically between the tools from the beginning of their implementation onward, saw a 64.6% employee retention rate for active users over the first six months, 5.3x more than the benchmark rate. This suggests that the consolidation of tools provides a more engaging and empowering employee experience, which in turn makes the frontline more productive and proactive, and companies more profitable.

Another reason for this increase in productivity, as mentioned, is the “deep personalization.” As each action the frontline employee takes becomes as personalized as possible, these actions become more contextually relevant and therefore more effective. For instance, if an employee only had $1,500 left in their weekly goals to get bonus points, the platform might alert them about a potential activity they could do to help them sell a particular product for which the company has a campaign right now, or which the platform knows specific customers would like.


Overall, tool consolidation has proven an effective manner of cost-cutting for retailers. But what is not talked about enough is that consolidation actually boosts revenue, digitally transforming—and modernizing—the retail experience for companies, which in turn enables them to compete with the leading gig opportunity providers.

At a time when so many retailers are seeking ways to seize an agile growth posture, they should consider tool consolidation, both reducing costs for a leaner organization and driving more revenue.

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