Following is Part 1 of the Retail TouchPoints series focused on Best Practices In Workforce Management. This section focuses on technologies and strategies designed to optimize the scheduling process. Part 2, which looks at additional strategies retailers are using to enhance workforce optimization, will appear in the April 23 newsletter.
Retailers are competing more aggressively on customer experience. Many are focused on workforce optimization to achieve two key goals: improve the overall customer experience, and create more efficient and competitive workforce strategies.
The results of a survey conducted by Retail TouchPoints and Workforce Insight, titled: Benchmark Survey: Uncovering Answers To Workforce Challenges, disclosed the opportunities to enhance the customer experience: Almost half (46%) of the 200-plus respondents said they had quantified their customer experience and are allocating enough payroll to execute it. However, only 3% said their defined customer experience is executed consistently in every store on every day, 100% of the time. Another 19% said it is executed less than one out of every two opportunities to do so. Approximately 80% said the defined customer experience is executed more than half of the time.
A recent white paper revealed the significant impact employees have on the customer experience. Focusing Your Workforce On The Moment Of Truth showed that 80% of consumers said their shopping experience is improved when staff is eager to help; and 75% will walk out of the store if they don’t have access to knowledgeable associates.
“Aside from the instant gratification that comes from taking a product home after a purchase, it’s the store employee that can make the difference to the in-store experience,” noted Retail Systems Research (RSR) in a study, titled: WFM 2013: The Store Employee in the Customer Age. “While most retailers agree, most have only just tapped the surface of employee education and empowerment.”
The vast majority (82%) of respondents in the RSR study declared that in the past three years, the role of the workforce in enabling customer service has become more important than ever.
Respondents also revealed their most important business challenges ― which directly correspond to the increasing importance of workforce effectiveness: meeting consumer demands for better service (58%) and driving sales through a more enjoyable shopping experience (58%).
Interestingly, almost half (43%) 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 industry-leading retailers are controlling this bidirectional pull with advanced WFM technologies. Those retailers include: Guitar Center, Dollar General and The Container Store. All three retailers are focused on schedule optimization for better payroll allocation decisions that improve profitability while enhancing the customer experience.
The emphasis on scheduling is not surprising: Almost two thirds (65%) of respondents to the upcoming Retail TouchPoints/Workforce Insights benchmark study said current scheduling processes directly contribute to revenue growth. Most retailers (88%) said there is opportunity to improve profitability through better utilization of payroll allocation.
Guitar Center Provides Specific Talent At Targeted Times
Guitar Center effectively gets the right music experts in front of customers with specific music interests shopping at certain times of the day. The retailer relies on a WFM solution from Ceridian Dayforce that combines historical sales analytics by department, including basket size, items per transaction, margin rates and more. The tool also “combines traffic patterns and employee analytics to generate department-specific demand curves,” Chris Salles, Director of Store Labor, Guitar Center, told Retail TouchPoints. “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.”
The retailer’s “unique brand of customer requires more than having the appropriate numbers of point-of-sale terminals available at peak times,” said Salles. “We promise our customer the best experience possible, and the key component to that incredible experience relies on our ability to schedule the best employees at integral times of each day. With valuable insight into schedule optimization, we’re able to make better staffing decisions and investments at the store level that benefit not only our customers, but also our bottom line.”
Store management also may make the informed decision, Salles reported, to schedule split shifts to supplement the day's schedule instead additional full-day shifts. He said labor optimization “improved substantially” following implementation of the WFM solution.
In the consumer/retail relationship, the customer experience is under attack, asserted John Orr, SVP Retail Strategy and Execution, Ceridian Dayforce. The top offenses are associate skills and knowledge, staffing levels, and problems providing the right service levels to eliminate long lines and slow checkout. As a result, “one of the current trends in WFM,” reported Orr, “is a shift in focus from cost to improved engagement.”
A recent PricewaterhouseCoopers (PwC) study of global CEOs brought employee engagement to light. “Almost all (92%) of the CEOs said employee engagement increases overall performance by as much as 34%,” Orr said of the findings. “In addition, it results in a 20% year-over-year growth in output of 20% or more.”
The report showed talent management to be a top-three concern among CEOs. While retailers such as Guitar Center are addressing talent utilization in their WFM processes, “trillions of dollars of benefit are lost annually,” said Orr, “as a result of not managing talent.”
Dollar General Creates Real-Time Exception Actions
Among the statistics reported for year-end 2012 by Dollar General, retail labor expenses increased at a rate lower than the increase in sales. This and other successes are due in part to the retailer’s WFM implementation, according to Ryan Boone, SVP and CIO of Dollar General. The 10,000-store retailer uses a suite of labor scheduling, task management and time and attendance solutions from Reflexis Systems.
“Our focus is always on how to best serve our customers,” said Boone. “Therefore, the technologies we leverage to improve the workforce management processes are designed to help the store manager be better prepared for the customer. 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.”
In January 2013, Dollar General announced it would open 635 new stores and create approximately 6,000 new jobs in 2013. This will bring the total number of jobs created by Dollar General to roughly 30,000 in the last six years.
The current strategies taking place at Dollar General “center on creating real-time exception actions out of any retail system, including workforce management technologies, and integrating these conditions into real-time tasks,” 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.”
WFM Is “A Way Of Life” At The Container Store
The Container Store is a long-time user of WFM solutions from Kronos. The initial implementation coincided with the “Great Recession” in 2008, said Paul de Freitas, Store Systems and Business Development Director for The Container Store, in an interview with Retail TouchPoints. “The system enabled us to reduce payroll by 7.5% while increasing payroll productivity by 10% ― all without laying off a single employee.”
Recently The Container Store revitalized and optimized its scheduling capabilities to drive better customer service. The “most impressive benefits” of the advanced WFM scheduling module include “having the ability to forecast our business metrics with a high degree of accuracy then use that forecast to schedule employees to be available when we predict increases in customer traffic,” said de Freitas. “Being able to leverage the WFM data to provide near real-time actionable metrics also has been a big benefit.”
The 60-store organization and storage retail chain sells sophisticated, component-based storage systems and other complex solutions that require a higher level of interaction with customers to explain features and benefits, and provide demonstrations when necessary. Enhanced WFM solutions help the retailer improve the customer experience by “scheduling the most accurate number of employees needed during times we expect our customers to be shopping,” de Freitas stated, “so the experience is the same for every shopper, no matter how busy the store is."
“Integrated forecasting and scheduling solutions allow retailers like The Container Store to achieve a myriad of benefits by effectively staffing their stores to meet customer deman," said Liz Moughan, Director, Retail and Hospitality Practice Group, Kronos. "Retailers find this allows them to drive average transaction value, increase conversion rates, improve customer loyalty and, ultimately, achieve a competitive advantage.”
The Container Store continues to build on the capabilities of the Kronos scheduling module. One of the items on the improvement roadmap, according to de Freitas, is looking at additional business drivers that can help with scheduling in different parts of the business. For example, the retailer’s “Go Shop! Click & Pickup!” service ― which allows customers to schedule pick-ups from their nearest store, for free ― continues to grow. As it does, the increased demand is changing the need for labor required to pull and prepare customer orders so they are ready for pick-up when customers arrive.
“Workforce management is not a project ― it’s a way of life,” said de Freitas. “You simply cannot install a WFM system, walk away and believe your work is done.”