Retail Labor Trends: Shaping the Future of the Industry
July 22, 2021 in Retail Trends, Workforce Management
The retail landscape shifted drastically in the last 18 months. That shift has caused many retailers to change how they operate today.
One of the biggest changes we saw was in customer buying behavior. Customers are now purchasing products in different ways, across many channels, and on their terms. 2020 spawned many new retail services and technologies. BOPIS, same-day shipping, ship from store, and endless aisle, are some. These new services offer customers additional convenience that they have quickly embraced.
These changes have also influenced a change in the role of the brick-and-mortar store. This has resulted in new activities and responsibilities. The store is no longer just the place to purchase goods. It has evolved into a showroom, a billboard and a mini distribution center all in one. This has elevated the importance of the store, with multifaceted responsibilities.
The Evolving Role of the Physical Store: The Omni Hub
The role of the store has changed; its purpose has become 3-pronged:
- Where the customer interacts with the associate and with the product.
- This may or may not be where the actual transaction takes place, but these interactions influences the ultimate sale.
- The physical store continues to be about brand awareness.
- Out of sight, out of mind: If the store is physically present in the market, the brand will remain top of mind with the customer.
Mini Distribution Center
- Retailers can leverage stores to efficiently deliver new services to customers like ship-from-store and same day deliveries.
- Even though the store has become a mini distribution center, these activities need to be done in a way that does not disrupt the in-store customer looking for a great experience.
These roles are equally important in meeting the customers’ expectations, no matter how and where they choose to interact with the brand.
Some New Labor Trends in Retail We’re Seeing
Increase in Omni Activities
Retail has been reinvented with new services and technologies that make the customer’s life easier. These new activities have all been embraced by customers wholeheartedly. But they have also shifted how we plan labor hours in store. Pre-2020, about 20% of the store’s overall hours were spent on non-sell activities. Today, we’re seeing upwards of 50% of overall hours spent on non-sell activities.
How sales are reported is also changing. It is no longer simply what is captured within the four walls of a store. Crediting the store for the digital activity that they are involved in is one way to help fund the new activities that they are required to perform.
Separation of Duties
Although there is an increase in in-store digital activity, stores are still expected to deliver top-notch service that embodies their brand. Retailers need to recognize that there is a conflict between a great experience for the in-store customer, and efficient picking, packing, and shipping from store to support digital. These varying responsibilities need to be carefully managed.
Clearly defining expectations and roles within each shift is critical in consistent brand delivery. Retailers should also ensure that the KPIs they are using to measure productivity do not send mixed messages. Establish KPIs for each deliverable and hold employees accountable for the role that they are playing. Overall, ensure that the store is getting credit for both sides of the business that they are supporting.
It’s Time to Revisit Labor Models
There are many more options available for customers to purchase outside of the store. The brick-and-mortar store has become even more important in retail than it was before. It is now serving many different purposes. But it is still the single most important touchpoint in the customer’s journey with the brand.
No matter how retail has changed, the employees in your stores are still the main differentiator for the brand. They are the reason customers come into the store and support the customer’s emotional connection with your brand. So, it is important to always have your store staffed with the right people, at the right time, and the right quantity required for the customer patterns.
Store Operations have changed more in the last 18 months than in the last 10 years. With new store tasks to support digital activities, and sales being recorded not only through the traditional POS but also through in-store online channels, there has never been a better time to revisit our labor models.
If you are still planning to use the legacy methods from past years, it’s a great time to challenge this with new ideas.
StoreForce can help you to achieve your retail goals and labor planning effectiveness. Interested in learning more? Contact us and engage with one of our retail experts as to how we can future proof your overall retail store management.
Chris Matichuk leads the Services and Product teams as the General Manager of StoreForce. With over 30 years in retail, Chris has vast experience in retail consulting and retail systems. Chris has worked closely with 100+ retailers spanning nearly all formats of retail. She has held positions from field organization to corporate operations in department stores, big-box retail, and Specialty Retail.
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