Too few Clerks in the store? How do you know?

The Wall Street Journal recently published an article by Suzanne Kapner that highlighted a significant problem in retail today…

Too few Clerks.

As stores continue to cut labor costs, it appears many retailers have gone too far. Ms. Kapner does a good job of illustrating the symptoms of the situation and offers some different alternatives to help companies look at the problem from a different perspective. However, the article does not answer one very difficult question around understaffing…

How do you know?

The danger in much of what seems to be apparent in the situation is the tendency to compare past performance to judge current results. While it is true that retail staff has decreased in both absolute and relative terms, this in and of itself is merely a data point. There is no way to judge whether it is good or bad, it is simply different.

Let me explain…

The retail world has been disrupted significantly in the past ten years, to the point where comparisons to the past are no longer valid. What we do know is that shoppers are telling us the experience in the store is not up to their expectations. But, the shift to online shopping also tells us that the consumers are not willing to pay a premium for increased staffing. This apparent paradox forces us to answer a fundamental question…

How can I deliver a differentiated experience without incurring increased costs?

The first step is to understand the service proposition

Ms. Kapner is quite correct that drivers other than sales are critical to allocating labor appropriately, especially foot traffic. What is missing is the second half of the equation; How much time per traffic should I allocate for service and selling? For many retailers the payback for a high service level is simply not there. Many brands, even luxury brands, are self-service. For example, the role of the staff in these stores is often just to keep the shelves full and organized and to keep the store clean and visually appealing.

Understanding what customers value and the link between service and sales is essential. Undertaking detailed customer journey mapping exercises can help to determine this linkage, and this will dictate what standard should be applied for selling.

The second step is to not just allocate the right amount of staff, but to allocate the right kind of staff…

Retail has traditionally used low-wage, part-time workers to staff their stores. In the days when retailers were only competing against themselves for market share, this made sense. In today’s omni-channel environment this may not hold true.

For a retailer that differentiates based on expertise, service or experience, it is critical to understand first what a customer expects and is willing to pay for, then to decide what type of staff can consistently deliver on that level. In many cases, this will be a more skilled associate who is not willing to work only 16 to 20 hours per week. It may also mean that the same person that has the skillset to stock shelves efficiently may not have the skillset to engage with customers in a selling situation.

The third step is to understand not only the right amount and kind of staffing, but when to staff the store.

Technology can help. Through the application of engineered labor standards (including validated and deliberate service and selling standards) against known driver metrics with time stamps (like traffic). This can assist in forecasting the need for staffing throughout the day. The key is to be able to apply all three elements (amount, type and timing) consistently. Technologies like JDA™, Reflexis™, Kronos™, Dayforce™ and LaborPro™ and others can help retailers do this automatically.

The fourth step, is to ensure that all conditions for success are supported in the store…

This means having the training, tools, processes, technologies and supervision in place to constantly support the associates. Many retailers have deferred maintenance and upgrades to these elements over the years and it is a major undertaking to bring them up to par. This investment is necessary to provide the right experience in stores. Having plenty of associates that have all the right skills and are in place at the right time will not pay off if they don’t have the tools, training and guidance to be successful.

The final step to addressing the question of service and staffing is automation…

Retailers need to understand the difference between value-added and non-value-added activities. Customers are willing to pay for value added activities, like keeping the shelves full, offering great advice, or helping to determine and find the right product. Customers are not willing to pay for the privilege of giving retailers their money. Short check-out lines are not a positive experience, they are merely a less-bad experience…

The true answer is to limit or eliminate the need for the cashier altogether. The harsh reality is that if traditional retailers won’t do it, others will. For example, Apple and Amazon are both offering check-out-free experiences.

To compete in today’s retail landscape, stores must offer an experience that is powerful enough to draw customers away from their iPad. A key ingredient in stores is customer service. This means retailers need to provide:

  • The right amount of labor
  • The right skillset
  • The right time
  • The right conditions to succeed

Otherwise, customers will wait for the Amazon box to show up.

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Andrew Taylor has over 20 years’ experience running operations at Fortune 500 companies. He is now a Senior Director at Connors Group. Andrew leverages his deep experience in retail strategy and operations and consulting to craft innovative solutions for clients. He can be reached at [email protected]
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