With the recent announcement by Amazon, that they will be increasing minimum wage for hourly employees to $15; the first reactions have been great, but true altruism might not be the
Let’s take a closer look at a few key facts:
- Currently, unemployment is at record lows. In fact, it’s the lowest it’s been since 1969.
- Consumer confidence is high and holiday sales this year are expected to be the best they have ever been.
- Retailers and DCs will be battling for temp labor to meet this increased customer demand.
Amazon understands this reality and has made a proactive move to make sure that they are attracting and retaining enough labor for this busy holiday season.
Other retailers are using similar tactics to hire the necessary people they will need to generate sales and maintain customer service levels.
- Holiday is a time where companies cannot afford to let customer service slip, this is an opportunity to gain new customers as some are shopping specific retail stores and online channels for the first time. A bad first impression can often lead to lost future sales.
- Returning customers have come to expect a level of customer service. Lack of proper staffing will most-likely disappoint the most-loyal customer advocates.
Reality is that most retailers are not going to be able to hire the number of people that they think they need so operational efficiency becomes extremely important.
Retailers need to be asking themselves:
- How do we predict how many temporary staff we will need, and when we will need them?
- How do we get what we need to get done with what we believe is not enough people?
- How do we decide what tasks we are not going to be able to do or tasks we are going to do less frequently?
- What does customer service look like during this time and how do we more quickly deliver that message?
- How do we quickly train temp workers and put them in positions and performing tasks where they can be successful?
- How do we maintain a good level of customer throughput at the Cash Wrap so that we don’t lose sales through abandonment?
- How do we limit losing customer traffic because someone decided not to even enter the store because of how long the lines are or store condition?
So, what’s the quick advice?
Retailers need to understand the different shopping patterns in holiday versus traditional times of the year…
Typically, holiday customers are shopping more intentionally…think gift buying. And, with less visits to the fitting room, it may be necessary to shift the fitting room and go-back labor into customer service and cash wrap. Also, less returns and more sales during the holidays, but right after the holidays another shift as returns are typically quite high as customers are returning the merchandise they don’t want.
Store management tends to get into a head-down tasking mode during holiday peaks and stores suffer as a result. Leadership needs to focus on maintaining good utilization and performance.
The holiday shopping season may not feel like it yet, but it is just around the corner. Proactive retailers (online and brick-and-mortar) need to be planning their staffing strategies now to be competitive.
Some considerations include:
- Sales forecasting:
- Holiday sales are projected to be up sharply this year in total, but what does this look like by channel for each individual retailer? All planning starts with accurate forecasting
- Hiring plan:
- Retailers should know what the learning curve is for temporary associates, have a discrete list of functions that temps can effectively perform, and a solid methodology for determining how many and when to hire.
- Management reporting:
- Having a plan is essential, but executing a plan is crucial. Successful retailers adapt their reporting for the holiday season to be able to react quickly, if not proactively, to changes in the economy, whether micro or macro in nature.
- Focus on leading indicators rather than lagging result metrics and incorporate into all levels of management in the organization.
The holiday season is full of opportunity for retailers. By focusing proactively on potential inhibitors, such as a lack of qualified staff, retailers can gain a competitive advantage going into this vital season. It is not yet too late to modify your strategy.