Outside the Box Logistics
By definition, successful retailers are very good at logistics.
“Compared with other industries, retailers are a benchmark of logistical efficiency for moving items through their distribution channels and on to shelves in a timely way,” said Jim Griffin, senior VP sales, PODS, whose detached delivery system allows placement of containers in tough-to-reach and hard-to-fit locations.
Griffin spoke with Chain Store Age about how logistics efficiency can add to a retailer’s bottom line.
What are some of the most common challenges retailers face when it comes to logistics (moving and storage)?
Common problems can include moving important items that need to be routed to their stores in a time-sensitive way, special or new merchandising units, or seasonal displays and special operational support equipment. These types of ‘unique items’ can create inefficiency and error and often end up being mishandled, misplaced or damaged in that process.
How does PODS help retailers with these challenges?
In essence, PODS is a mobile on-demand warehouse that can handle, in many cases, a retailer’s special items and/or initiatives that require moving and storing more effectively than the company’s own logistical systems — and with far less damage, more control and at a lower total cost than traditional third-party truck and fixed warehouse logistical providers.
With over 160,000 containers spread across our network of local and regional storage centers in North America, PODS is an innovator and a leading provider of containerized solutions. Our extensive footprint and dedicated fleets of local and long-distance trucks often provide a level of flexibility at a much lower cost than traditional third-party logistical suppliers. This is especially true when the items require more careful handling of the materials and when time is of the essence. We can place the containers virtually anywhere with our patented, level-loading PODS container lifting system, known as ‘Podzilla.’ We easily support the logistical flow of the retailer.
How does PODS help retailers with new store openings, resets and renovations?
By bringing our dedicated PODS commercial team into the early planning of their events, we develop cost-effective, customized solutions, which enable the retailer to complete the projects often with less damage and usually with better labor and time management control. Here are just a few ways: Retailers can ‘kit,’ or combine, materials into PODS containers in advance of the project, and the materials for these events can be pre-positioned in our network and then scheduled for delivery on short notice whenever the individual stores are ready.
Using PODS also helps a retailer reduce the number of ‘touches’ of the materials and quite often lowers the amount of required labor time to implement because of the ‘on-demand’ nature of our model. For many of our retail customers, the reduced damage savings alone justify the switch to using PODS.
What about disaster and emergency responses?
We pre-position critical disaster supplies and materials in our network and get them to the affected areas often more quickly than alternative methods. Many retailers contract with us to bring containers directly to any of their stores that are damaged in an emergency. Our storage centers provide warehousing until repairs can be made to the impacted facilities. Depending on a retailer’s individualized recovery plan, our commercial customized PODS solution provides a more effective and lower cost alternative.
Logistically, how does PODS move its containers?
With more than 400 storage facilities and warehouse locations spread across the United States and Canada, PODS uses a hub-and-spoke model. Our dedicated fleet of flatbed trucks moves longer distances, and then our fleet of local delivery trucks handles the last-mile needs of our customers. Our container-tracking capabilities allow us to advise customers of where their containers are in our system at any time. We control our entire network and ensure gentle handling, while keeping the containers level at all times, which dramatically reduces damage versus traditional carriers.
What do you see as the biggest advantage PODS offers retailers?
Our innovative PODS commercial team brings expertise to retailers’ moving and storage needs, working with them to cost-effectively gain strategic advantages over their competitors.
One of our retail customers used PODS to stay ahead of competitors by opening new locations faster. A leading fashion retailer utilized PODS for moving and storage, which allowed it to afford to update its key category merchandising every other year. And our logistics allowed the retailer to cost-effectively update more often versus the three-to-four-year model previously used with traditional methods of trucks and 3PL suppliers.
Other retailers have gained significant cost and time improvements, which enables them to keep their stores looking fresher and more contemporary than their competitors.
Birchbox Steps Out from the Web
Another digital retailer has made the leap to the physical space. Online beauty subscription company Birchbox, famous for the pink boxes packed with sample products that it sends to subscribers each month, has opened its first brick-and-mortar store, in Manhattan’s SoHo neighborhood.
The duplex-styled, 4,500-sq.-ft. space is bright and airy, with light woods and a white palette accented with pops of color. With a friendly, inviting vibe, the store is designed to bring the Birchbox digital experience to life, creating a shopping and lifestyle destination where shoppers can check out the newest products and receive expert advice. It also offers quick-fix hair, nail and makeup services, and group classes on beauty and skincare topics. (Birchbox’s in-house design team worked closely with RPG, New York City, on the design of the store.)
The store features a curated assortment of nearly 2,000 products from approximately 250 brands. Similar to Birchbox’s website, the merchandise is organized and displayed by category as opposed to the standard practice of by brand. An upfront case, updated on a regular basis, showcases the company’s top 10 online best sellers. Many of the displays carry editorially styled comments that mirror the playful tone found online.
Birchbox encourages customers to test-drive the latest products with a dedicated “Try Bar” area. (Testers of every product in the store are also available.) And in keeping with the company’s roots, there is a “BYOB” (Build Your Own Birchbox) area where shoppers can create their own custom Birchbox, for $15, with their choice of box color and five sample products from across categories.
Birchbox is savvy in its deployment of technology, using it not to dazzle the customer as much as to create a more personalized shopping experience. Shoppers can view customer reviews and recommendations and video demonstrations to assist in their product selection on the iPads that are positioned around the store. Video screens feature tutorials to keep shoppers entertained — and get them inspired to try something new. At a touchscreen on the main floor, shoppers input key data (hair type, skin color, age, etc.) and receive personalized product recommendations and customer reviews.
Beauty services are offered on the basement level, also home to hair care and nail products, and men’s grooming items. It’s also where Birchbox’s classes are held. The classes, which are free for Birchbox subscribers and $30 for non-subscribers, are designed to appeal to all types of beauty consumers and allow them to sample, try and learn about the products.
“Our goal with Birchbox has always been to make it easy, efficient and fun for people to discover new brands and products fit for their lifestyle,” stated Katia Beauchamp, co-founder and co-CEO of Birchbox. “We have learned so much about how we can drive customers to change their behavior online, and we see an opportunity to extend into offline retail to evolve with our customers’ needs.”
Launched in 2010 by two former Harvard Business School classmates, Birchbox has been on an upward trajectory ever since. The New York City-based start-up now has more than 800,000 active subscribers who pay $10 per month to receive a pink box full of sample beauty products tailored to each subscriber’s needs. It counts more than 800 brand partners.
In 2012, Birchbox acquired an international competitor, JolieBox, giving it a presence in France, Spain and the United Kingdom. That same year, it launched Birchbox Man, which delivers a monthly box of gadgets, grooming and lifestyle products. While the majority of Birchbox’s revenue comes from the monthly boxes, roughly 30% of sales now come from the full-sized products that the company sells on its site.
In April 2014, Birchbox closed a $60 million round of Series B funding from a group led by Greenwich, Connecticut-based Viking Global Investors and was reportedly valued at $485 million. The retailer has said it would use the capital to, among other things, support global growth and expansion. Another possibility: a line of company beauty products.
‘Tis the Season … to Hire Smarter
As the holiday season approaches, many retailers will ramp up their staff to accommodate the increase in customers and other operational demands. However, in today’s era of widespread employment litigation, employers must be even more conscientious of the legal liabilities and practical consequences they face during this time of year.
Despite the fast-paced nature of the holiday rush, companies should still conduct their due diligence when screening new employees, whether they are long-term or seasonal. In the long run, retailers will help lower the risk of employee misconduct and future litigation by taking the appropriate precautionary measures, such as background checks. However, companies need to be cognizant of increased enforcement of efforts by governmental agencies to ensure they minimize risks in doing so.
Some tips for companies conducting seasonal hiring include:
Employment of Minors
Many applicants for seasonal jobs are young adults looking to fill holiday breaks with temporary positions. Hiring staff under the age of 18 comes with specific labor laws to follow. For example, some of the most common violations include employing 14- and 15-year-olds outside of allowable hours, allowing youth employees to load, operate or unload a trash or cardboard compactor, or allowing employees under the age of 18 to drive on public roadways as part of their employment outside of prescribed limits.
Employers should be sure to review applicable laws for compliance and corporate policies when employing minors for seasonal employment.
Seasonal Employees as Independent Contractors
Businesses often misclassify employees as independent contractors, and in the process, open themselves up to significant potential liability. This temptation is often especially compelling for seasonal employees. Most part-time retail positions would be unfit for independent contractor status and could create future legal liability.
For example, independent contractors, as defined by the IRS, must provide their own supplies and equipment, control their own hours of employment and, most importantly, control the manner and means by which the services are provided. Therefore, employers should be sure to avoid designating a seasonal worker as an independent contractor without first determining that the circumstances legally justify such a classification.
Generally, the Federal Fair Labor Standards Act and similar state law require that employers pay non-exempt employees one and one half their regular rate of pay for any hours worked in excess of 40 in a workweek. Both federal and state law, however, exempt certain individuals from overtime requirements.
Retailers may require long shifts when understaffed, but employers should be sure to review corporate policies and their seasonal employees’ status under federal and state law to determine whether they are exempt from paying overtime to employees or other wage and hour issues like meal and rest period requirements, which commonly lead to legal claims.
When to Conduct Background Checks
Depending on the industry, open job position and potential candidate, a background check is almost always a good idea. Background checks often involve a variety of steps, including researching criminal records, driving records, contacting previous employers to verify the information that a candidate has provided on his/her application and verifying a candidate’s employment history, job titles, starting and ending dates and salary/ bonus information.
The nature and extent of the background check will depend on the industry and the position for which the candidate is applying. For example, in retail, criminal record searches can be a vital part of an employer’s program to avoid employee theft and misconduct, while driving records are vital for positions that require vehicle operation as employers are liable for accidents that happen on company time.
Boundaries of the Background Check
When you use a third party (such as a screening firm) to conduct a background check on an applicant, there is a federal statute known as the Fair Credit Reporting Act and state specific statutes (such as the California Investigative Consumer Reporting Agencies Act) that govern how employers obtain and use background checks.
These statutes require that employers obtain written authorization to conduct a background check, provide certain disclosures to applicants and notify the applicants regarding any potential or actual adverse employment actions that will be taken.
Christopher Boman is a partner in the Irvine office of Fisher & Phillips, a national labor and employment law firm. Boman can be contacted at email@example.com.