By Branko Miletic

Voice over internet protocol (VoIP) is becoming an increasingly popular way of running a business phone system and is also a fast way to cut phone costs. According to Ryan Parker, director of partnerships and services, Netgear, the VoIP implementation at companies such as Manning Shoes is all part of the new wave of IT revolutions sweeping the retail world.

Over the past couple of years in the retail sector, there have been a number of small to medium-sized companies, like the ones the size of Manning Shoes, switching from a LAN-based phone system to one that is tied in with their broadband internet connection. This is most commonly called convergence and in many ways, it has been these small and mid-sized retail outlets that are the most likely to get the most benefits out of switching to VoIP.

As Netgear’s Parker points out, “Companies of all sizes within the retail sector can benefit from VoIP, using it to save money on outward-bound calls and also inter-office communications. A good VoIP provider should be able to offer a retailer with multiple stores free calls between the sites as an inducement to take on their service.”

But what most retailers really care about is actual dollars and cents, so just what kind of savings did Mannings actually manage to make? This is often a sticking point when talking to technology vendors figures can sometimes be a bit rubbery.

Parker says that Manning Shoes has implemented a VoIP system and has also signed up to a group saver mobile phone plan, which has enabled them to reduce phone bills “from $3,500 per month to approximately $2,700 a month.” In other words, $800 per month goes straight back on the bottom line. Over a 12-month period, that represents about a $10,000 saving he notes.

The other issue that has made many technology first adopters uneasy is installation costs. It may be true that you have to spend money to make money, however some SMBs don’t have the money to spend in the first place.
But Parker insists that broadband is the only thing required to take advantage of VoIP, so installation costs will vary between stores depending on whether or not they already have a broadband connection.

Secondly, he says, “For those that didn’t have an existing broadband connection, it costs about $350. In terms of Mannings Shoes, that included the cost of a modem, ongoing monthly broadband rental fee and the Netgear VoIP adapter bundled with the Ace Communications voice service.”

Another important issue that is often brought up is the one concerning reliability. Many retailers would be aware that the internet can at times be a bit fickle an attribute not really helpful in a phone system. However, according to Parker, VoIP reliability is no longer a significant problem.

“VoIP reliability has certainly improved significantly, but picking the right VoIP partner and hardware is the key to reliability,” he says.

However, Parker insists that what is holding back the mass uptake in the retail sector of VoIP is education and a lack of understanding by the industry.

“The biggest obstacle to VoIP take-up in the retail sector is lack of understanding. Many retailers do not have a good understanding of this technology and the benefits it can deliver to their business in terms of reducing call costs and improving communications.

Furthermore, Parker says that he believes VoIP is the next IT revolution for the retail sector the same as the internet was.

“VoIP represents the next evolution in retail communications and will increasingly penetrate the sector as businesses recognise the real and immediate return on investment the technology has to offer. Retailers should definitely be investing in VoIP over the next 12 months as the technology is evolving quickly and the effect that it can have on their bottom line is significant.”