The landscape of retail sales is changing, and many retailers simply aren't keeping up. Customers are expecting more, sales and delivery are getting increasing complex, and labor regulations are shifting. Meanwhile, most retailers say they aren't prepared to meet these challenges and feel unable to keep up with the pace of change.
In it's JDA Voice of the Store Associate Survey, JDA Software Group pled more than 250 U.S. store managers and more than half reported that they were unprepared to meet changes in the industry. For example, more than half said that they have not adopted a modern Workforce Management (WFM) solution, relying instead on outdated scheduling methods, including paper-based schedules and white boards or Microsoft Excel spreadsheets.
“The research raises serious questions as to how much attention retailers give to managing their staff efficiently, predicting customer demand needs and complying with new or pending labor regulations,” said Tyler Owen, senior director, Global Solutions Strategy, Store Operations at JDA Software.
Especially with the advent of omnichannel sales, customers increasingly expect the ability to choose from a variety of buying and delivery options. “The biggest impact on electronics retailers is omnichannel,” Owen told EBN. “All of a sudden you have the nature of the work that in-store associates are doing is changing. With Buy Online Pick-up In-store (BOPIS) and Buy Online Return In-store (BORIS) options and the practice of show rooming, customers are looking for different kind of help and the low margins and nature of electronics sales amplifies that.”
The majority of costs for retailers can be associated with three categories: real estate, inventory, and labor. “Until now, labor has been cheap but that's no longer the case,” Owen explained. “Now, it has become the largest controllable expense. You have to think about optimizing it.”
Now, in many states, minimum wage is being increased. Workers, meanwhile, are calling for an end of on-call practices and asking for fair, predictable schedules. In response, both state and city regulations (including from the San Francisco Worker Bill of Rights, Hours and Scheduling Stability Act of 2016 District of Columbia, New York’s Attorney General Office and the City of Seattle's predictive scheduling bill) have tried to address these concerns. Meanwhile, the Department of Labor has proposed an update to the Fair Labor Standards Act (FLSA), which would raise the minimum salary threshold required to qualify for exemption from minimum wage and overtime requirements, affecting a proposed 4.7 million workers.
Without automated systems, two out of five respondents report that they don't have adequate staffing to deliver the needed level of service. Many end up paying workers overtime to meet the need, and more than half still rely on on-call scheduling, a practice that leaves workers highly dissatisfied.
Automated systems allow retailers to make better decisions. “By knowing where products are, and what lead times are, I can make the best decisions of how to get products to the customer,” said Owen. “At the same time, labor has to equate to the order as well. You need to understand labor costs and capacity. You have to think about labor as the next layer of the supply chain and key to the profitability of that order.”
In order to get their workforces trained, retailers need to focus on the one-two punch of training and technology. “You have to help workers understand the new requirements,” said Owen. “Beyond training, you have the challenge of giving employees to tools they need to meet and exceed customer expectations.”
With this approach, retailers can optimize both the customer experience and worker satisfaction. “The overriding theme that we uncovered was the need to embrace the retail labor force as a strategic asset,” said Owen.
The infographic below offers more findings from the survey. Take a look and let us know about your experiences in trying to manage a retail workforce in the comments below.
— Hailey Lynne McKeefry, Editor in Chief, EBN