Retail TouchPoints: Retailers Enrich the Customer Experience With Scheduling Optimization
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
According to the most-recent workforce management (WFM) study from Retail Systems Research (RSR), two of retail’s most important business challenges directly corresponded to workforce effectiveness: meeting consumer demands for better service (cited by 58 percent of respondents) and driving sales through a more enjoyable shopping experience (58 percent).
But almost half (43 percent) also cited pressure to reduce labor costs as a percent of sales as a principal business challenge.
"This leaves retailers pulled in exactly opposite directions," the RSR report noted. "Make [the shopping experience] better, which has traditionally involved adding customer-facing associates in stores — and make it more efficient by reducing head count."
A number of retailers are controlling this bidirectional pull with advanced WFM technologies:
Guitar Center effectively gets the right music experts in front of the appropriate customers shopping at certain times of the day. Its WFM solution from Ceridian Dayforce combines historical sales analytics by department, including basket size, items per transaction and margin rates. The tool also "combines traffic patterns and employee analytics to generate department-specific demand curves," said Chris Salles, director of store labor. "If our acoustic guitar business spikes mid-afternoons on Thursdays, store management is armed with that knowledge and schedules their most talented acoustic guitar salespeople across that time period."
Store management may also schedule split shifts to supplement the day’s schedule instead additional full-day shifts.
Dollar General uses a suite of labor scheduling, task management and time and attendance solutions from Reflexis Systems.
"The technologies we leverage to improve the workforce management processes are designed to help the store manager be better prepared for the customer," said Ryan Boone, SVP and CIO. "They help us effectively prioritize work, properly staffing the stores during peak hours and reduce the time required for scheduling so managers can spend more time directly supervising employees and interacting with customers."
Current strategies taking place "center on creating real-time exception actions out of any retail system, including workforce management technologies, and integrating these conditions into real-time tasks," Mr. Boone reported. "We are also working on improvements to integrate task planners into schedules to better match the work to the skill sets of our employees."
The Container Store has used Kronos’ solution over the last few years to reduce payroll costs while increasing payroll productivity without any layoffs. Recently, its scheduling capabilities have been upgraded to provide the ability to forecast its business metrics with a high degree of accuracy to help better forecast scheduling needs.
The goal, according to Paul de Freitas, store systems and business development director, is "scheduling the most accurate number of employees needed during times we expect our customers to be shopping so the experience is the same for every shopper, no matter how busy the store is."
Discussion Questions
What should be the primary and secondary goals of any retailer looking to employ a workforce management solution? What workforce challenges may emerge as physical stores evolve within the total omnichannel environment in years ahead?
Using technology to support better workforce scheduling is a no-brainer, and has been in place for many years at large retailers. The primary goal, obviously, should be to match available workforce with traffic patterns. But to take this a step further (as many retailers are trying to do), it’s not just about adequate staffing at the checkout lanes. Does your store have individual departments that need to be “staffed up” for browsers (the example of Guitar Center)? Do you need to budget more hours for shelf replenishment in advance of a weekend sale event? Complex problems like these require smart IT solutions.
Guitar Center is right on—matching so many needs to talent. Too many labor scheduling programs are designed to reduce bodies, not maximize talent. In this day and age of showrooming, BIG DATA will need to deliver on the promise of all the information at hand. How that is executed in front of the customer, with human beings, will be the test for all retailers going forward.
Regardless of system used, I think it’s the overarching goal that makes the difference. I like the philosophy expressed by Container Store, “scheduling the most accurate number of employees needed during times we expect our customers to be shopping so the experience is the same for every shopper, no matter how busy the store is.”
Optimal staffing is a lynchpin of customer satisfaction. However, other factors are important contributors as well: inventory, merchandising, navigation, lighting, cleanliness, pricing, for example.
Container Store and other retailers can take all the puzzle pieces and create the picture that is most effective overall. In other words they create the picture that works best for them and their customers. I am afraid there are other retailers who focus simply on reducing costs without a framework that includes the customer’s experience.
And the customer’s experience with anyone retail transcends the in-store experience. Understanding how to satisfy the customer will require exploring the behavior and reaction to what happens online as well. If the end goal for retailers is to secure shoppers wherever they shop and regardless of how and where they distribute their shopping time, a new paradigm will be built that truly looks at the customer experience from 30,000 feet and develops a strategy accordingly…without parsing it.
As retailers transition to the new style of shopper that is more product knowledgeable, a vital area for retailers is education. This ranges from education on the products that they sell to the importance of their role in the end-to-end retail process—no matter the channel. Being involved on the retail-focused university front, I am seeing more and more demand for the retail employees that know the business—all of it and not just “how to be a buyer.” From my zillion years in retail, I am seeing more dialogue and action related to e-training platforms for educating employees in many areas.
In the #1 State, Arizona, some of my favorite retailers that I shop weekly have shared with me how they are holding more and more pre-opening education workshops at their stores.
A few of the areas they have mentioned as why they have these workshops—knowing the many shopper types, learning how to better communicate with the shopper and understand their issue/desires, and how to match the right product to their needs, and a big one was teaching the store teams about the products.
To win in retail—in stores and certain internet sub-verticals—retailers need to have the right people in front of the shopper and the right product.
Education = more sales!
The Container Store has been a leader in labor management for years. They have established patterns of shopping hours allowing them to staff adequately for the maximum coverage when needed.
Primary goal for retailers should be to maximize sales by matching customer traffic with staffing. Easily said, but difficult to execute. First of all, you may not realize that you are losing sales because of poor staffing because you use historical data to forecast. Second and MOST IMPORTANT, it’s not enough to have just any sales associate on the floor, you want to match the “A” sales associate with the highest traffic times. Lastly, and dependent upon type of retailer and sales process, maybe cashiers shouldn’t be the entry position for workers, but a marquee position saved for the best associates. In some retailers the cashier may be the only point of contact for the customer. Do you want your best associate to interact with your customers, or your highest turnover, lowest trained, newest associate? THINK ABOUT IT—MAYBE THE CASHIER SHOULD BE THE BEST ASSOCIATE IN YOUR STORE!
There are measurement technologies available that when implemented strategically, correctly and their results are interpreted properly can provide a very accurate picture of the weekly shopping and traffic behavior at the departmental level within a big-box retailer. This process and its results can be achieved as a time-defined project as opposed to an ongoing commitment. These results can be readily mapped against your resource scheduling in order to maximize your customer-relevant associate face time.
Scheduling in-store staffing should be done when you have the greatest number of sales opportunities in the store not based on POS data.
The primary goal is simply providing customer service in a great shopping environment. Customers who have a hassle-free experience are more likely to return.
The most common issue I see with store labor is trying to accurately forecast requirements, which never happens. In fact, forecasting error winds up adding to labor. Retailers should start with developing good methods and train associates to use the methods. Too many associates develop work steps themselves and they waste labor. After good work methods, the planning tools need to drill down to departments and sub-departments, not total store. Service departments need priority sequencing, not time schedules. Both goals are achievable, but engineering is the answer.
Never forget that we largely live, and do business in a SELF-service world, which means efforts to help the shopper help themselves are far more important than workforce management. PERIOD!!! However, as always, whatever workforce you do deploy needs to be done efficiently, both to keep operations moving, and providing whatever shopper “service” that is urgent.
The reason I say this is because someone is always coming up with the brilliant idea that what we need to do is provide more customer service. The idea has merit, but VERY limited value if that means adding staff. The Third Wave of Retailing will be dominated by stores that are super-convenient for shoppers to serve themselves. This will require a good deal more understanding of shopper behavior and thinking than is common in retailing today.
My primary goal would be different than I think most retailers. I would want a system that first makes my employees’ life easier and lets me reward my best people by giving them more, not fewer, hours — or the hours they would like to have, when possible. (Great employees equal greater customer satisfaction.) Second, I would be looking to make my manager’s life easier. Third — better control of staffing cost.
Retailers need to consider solution providers who are experts in their fields, and who can grow with them. Basic schedulers are one thing, but true, forecasting and labor management capability is a must in order for them to return a positive ROI. The ability to map from sales forecast, based on actual historical trends, to an accurate labor mix is the key.
Secondarily, the solution should provide a better system of communications for managers and staff. Staff members these days are typically Gen Y, and undeniably dependent on their smartphones. Being able to reach them consistently requires slick, easy-to-use mobile apps to deliver important messages and scheduling information. Additionally, tools that provide them with some schedule change request flexibility is a feature that will increase the likelihood that the people on the floor serving your customers are happy to be there.
The primary goal should be to maximize service to the consumer. The secondary goal should be to make sure the primary goal is being achieved.
This isn’t rocket science in today’s world. Go into a McDonald’s, Burger King, Hardees or any other fast food operator and they have records that will tell you exactly what they sold by any 15 minute period — yesterday, last week, last Christmas Eve, etc. Furthermore, sales are connected to personnel needs so scheduling can be accomplished in a manner that allows the QSR operator to man their store to meet customer needs.
Now explain to me why the line at Walmart is a 20 minute wait and 15 registers have no one manning them? It’s because the public is putting up with the wait. If the same thing was happening at McDonald’s, customers would leave and go next door (which is why the computerized systems were bought and installed in the first place). Self checkout is a good start, but lines are backing up there too!
I believe there has to be a balance of three things. Optimized payroll, proper staffing, and employee satisfaction. That last one is often not a part of some retailers’ equation.
As cited above, “Store management may also schedule split shifts to supplement the day’s schedule instead additional full-day shifts.” Unless an employee wants to work a split shift, you may have coverage but it isn’t with a happy employee.
I think we get in to trouble when the software and data is the decision maker and not the manager. Keep the human touch, and you’ll maximize the opportunities.
I’m not a retailer, so this is a humble, side POV, but as an investment professional focused on enterprise technology and with experience understanding retailers regarding their retail tech AND marketing demands (redundant to say both those things separately these days, but might be worth emphasizing given the thoughts on engagement in this article), I’d say that any retail tech solution speaks to both back-end and front-end management.
It’s pretty obvious to many in theory, but it’s worth underscoring the fact that workforce management, marketing, etc. are all functions that need to converge on the customer experience. And the biggest challenge is actually two-fold: 1) integrating omni-channel data that exist in different silos today, and 2) leveraging (accessing + utilizing) the data in a way that is “new” (quotes due to the fact that it’s not really new, just that we’ve tried it in e-commerce and know that it needs to be done in B&M). I’ll expound on those two goals and how they’re relevant to workforce management (WFM) below.
1) Data silos. Who wants to replace their expensive 10 year-old legacy POS+Back-end systems? A special prize goes to the ones that do it first. The prize? Potentially choosing the wrong tech vendors/solutions and being stuck for another 10 years. Congrats. Bonus: now you have two systems since the solution you chose is fancy and hip, but doesn’t really do what you needed. So one step forward, two steps back. Oh, and if you’re the CIO, you’re fired. Good luck.
BUT that actually is becoming less and less representative of reality. I’m very optimistic about entrepreneurs, startups, and yes traditional industry leaders understanding this demand and providing the right solution. You see more and more news about startups focused purely on APIs, data connectors, and very simple yet effective UI layers placed across disparate systems that help provide fingertip access. That goes for inventory, pricing (1st party AND 3rd party), time and attendance (let’s just call this labor productivity going forward, because time and attendance without productivity is a little myopic, though good enough for many I suppose), and cross-channel customer data.
Combining all that, I can see a day where our in-store shopping experience will look like this: “Thanks for checking in through Facebook/our app/kiosk/loyalty card reader, John Smith, looks like you had a pair of jeans in your online shopping cart last week and couldn’t buy since it was out of stock. Well, we have those jeans/similar jeans in your size, in a few colors, in-store, and Jane will be helping you out with that today. Here’s a 20% off coupon off your entire basket today for the inconvenience. Have an awesome day! (by the way, if you want some other items to pair with it, click here)”
2) That might be a natural segue into point #2: how to leverage the data. Is it through tablet-enabled sales associates? Interactive digital signage? Well, that’s up to the retailer. Again, I’m not in the shoes of a retail exec. Far be it from me to say what the right way is. The answer for some may not be as “cool” as you would imagine. For example, I’ve found interactive digital signage solutions surprisingly effective in certain cases (e.g., cell phone stores, which have customers who make high-involvement purchasing decisions and who have an irrational+rational itch to incorporate as many datapoints as they can before making their purchase decision, all while trying to not be judged by the person helping them).
At the Mobile World Commerce conference that took place in SF, I heard the main point well articulated: it’s not really about a UNIFIED customer experience as it is about a GOOD customer experience, which is, ideally, unified. The customer doesn’t care about what cool technology is unifying your logistics and your WFM. The datapoints you have on a customer (demographics, prior purchases, web behavior, foot traffic, etc.) are just proxy variables for one thing: the next purchase(s). Effective use of data, in a responsible way, shows the customer that he/she can get what he/she wants.
As Joan Treistman said in her comment to this article, it’s about the overarching goal. Defining the goal is very important. I know that seems trite to say, but you wouldn’t believe the amount of startups that are created to help enterprises do just that function alone. To answer the question of what challenges retailers face, in a more succinct way, it’s technology paralysis and inertia.
Wal-mart is incorporating mobile payments (grab items, scan items, pay, and go, all without stopping at a cash register). That probably signifies some kind of sea change coming. Then again, people had to eat their own words regarding Wal-Mart’s RFID initiative, so we’ll just have to see. My bet is they won’t make the same mistake twice, and judging from the acquisitions they’ve made and their recent efforts, they seem like they want to lead from the front, not the back. We’ll see who else jumps on the bandwagon.