Is self-checkout tech the answer for DSW and other retailers facing associate shortages?
Designer Brands Inc., the parent company of DSW, reported in May that its first quarter performance marked the first time the shoe retailer had turned a profit since the pandemic disrupted its business last year. With business on the rebound, however, DSW has not been able to attract the number of associates it needs to staff its 500+ U.S. locations. This situation, not unusual in retailing at the present time, is reportedly behind the chain’s decision to test self-checkout technology at some stores.
Karen Cho, senior vice president of human resources at Designer Brands, told CNN that the company began testing self-checkouts last year in response to associates’ COVID-19-related health and social distancing concerns but that challenges recruiting employees has provided additional impetus for the pilot.
DSW has been offering hiring bonuses and expanding benefits to primarily attract part-time associates as most of the chain’s full-timers continued working throughout the pandemic. Ms. Cho said that the company has “relatively lower hiring needs,” but that recruitment has been tougher than in recent years.
Self-checkout technology is typically positioned by retailers as a consumer service at the front end of stores that enables associates to be deployed in other areas more valuable to shoppers. The labor savings aspect, which is typically pitched as one of the benefits to stores that deploy the technology, may become more important if current labor challenges persist.
Around 649,000 retail workers gave their notices to employers in April even as the industry sought to staff up in response to the rebounding economy. Amazon.com, Costco and Target have raised their starting wages to $15 an hour, but retail is still seen by many as offering low paying jobs with difficult hours. Retailers have raised hourly wages, offered bonuses and improved benefits, including extending them to part-timers in an effort to boost recruiting.
Best Buy and Walmart are among chains that have shifted a greater percentage of their workforce to full-time while investing in employee training and career development for associates.
Walmart is giving more than 740,000 associates free Samsung smartphones this year to support the launch of an app designed to help make it easier for them to do their jobs. The devices can also be used for personal use outside of work hours.
- Designer Brands Inc. Reports First Quarter 2021 Financial Results – Designer Brands Inc.
- This shoe chain can’t find enough workers. It hopes self-checkout can fill the void – CNN
- Does retail have an answer for its jobs problem? – RetailWire
- Best Buy puts multi-taskers to work – RetailWire
- Walmart gives associates free phones and a mobile work app – RetailWire
- What will going to mostly full-time staff mean for Walmart’s stores? – RetailWire
DISCUSSION QUESTIONS: Do you see current labor challenges hastening the expansion of self-checkout technologies in retail stores? What do you see as the most effective and sustainable path to addressing retailers’ staffing shortages and, at the same time, profitability concerns?