Preparing for Data-Driven Labor Management
No matter how many robots, kiosks and shiny technology are readily available to improve the in-store experience, retail stores still need human power to operate and provide personalized customer service through store associates. After all, the human touch still gives brick-and-mortar retailers a key advantage over e-commerce merchants.
Labor management is key to ensuring each store has the right associates in place at the right time to provide this experience, without spending excessively on labor. If retailers can better predict the number and skill set of employees that each store needs every hour of every day each week, then customers receive prompt sales assistance, shelves are replenished in a timely manner, employees are neither idle nor overworked, and labor costs go down.
In fact, a data-driven approach to labor scheduling and labor budgeting often leads to significant cost savings AND improved customer service.
Understand Labor Management
Labor management is a set of integrated processes which affects the retail organization from the top down. It goes beyond managing employee schedules and allocating talent. It encompasses the entire process of aligning corporate financial plans with store labor budgets, and finally labor schedules.
Traditionally, at the highest level, corporate allocates a monthly budget towards labor. Often, the allocation is based on a percentage of sales which does not take into consideration the unique aspects of the individual stores, promotional calendars, etc. In many cases, this approach simply perpetuates past performance. A more data driven approach would base the allocation on unique key metrics such as traffic, tasks, promotional calendars, and store demographic attributes. Analysis of “time and motion” studies of key tasks are used to identify opportunities to improve the timing and productivity of “non-selling” tasks, with the goal of improving productivity around certain tasks to save or reallocate the labor hours into better customer service.
After answering the question “How do we allocate our constrained payroll dollars most effectively to minimize payroll costs and maximize sales?”, our labor budgets are generated on a weekly basis by store and/or department. Finally, hourly employees are scheduled based on their availability to meet those labor budget needs. “If I have x number of budget hours available for this store for this week, how should I schedule Mary Sue and Bobby Joe to cover those hours each day?” A data driven approach would look at historical patterns to optimize the scheduling.
Incorporate Best Practices
With a large number of complicated factors to consider in a data-driven approach, planners need to set and incorporate best practices across all areas of labor management. Best practices include:
• Scheduling, Time and Attendance
• System Integration
• Reporting and Analysis
See Cost Savings and Improve Customer Service
In today’s planning environment, too many retailers continue to rely on time-consuming, manually intensive practices and systems that stunt effective labor allocation. Understanding critical drivers and tasks to maximize employee effectiveness for “non-selling” activities and allocating resources to drive sales efficiently is key. Monitoring and benchmarking store level performance provides the opportunity to capture trends, continue to look for areas to improve and adjust to changing market conditions.
Even with a robust labor management software solution, retailers can’t simply flip a switch and expect magic. Retailers need to clearly understand all of the tasks and components that factor into the labor process and incorporate data from each of those areas into their data-driven labor management system. With the right data inputs and best practices in place, retailers will see cost savings and improved customer service through data-driven labor management. For example, if you have 1,000 stores with 15,000 hourly team members, saving two hours per store per week at $12 per hour will result in saving of $1.25M per year. That’s significant!
Tom Phelps is a partner at Columbus Consulting International.
Target and Best Buy among speakers at annual cybersecurity summit
The Retail Cyber Intelligence Sharing Center (R-CISC) has announced featured speakers for its Retail Cyber Intelligence Summit, held October 3 – 4, 2017, in Chicago.
Among the keynote speakers are Rich Agostino, chief information security officer at Target Corp, who will lead a session titled, "Stepping into Leadership: Staying Ahead of Today's Threats and the Evolving CISO Role," and Kostas Georgakopoulos, CISO at Procter & Gamble, leading a session on the next evolution of information security.
The event will also include a panel discussion entitled, "The Importance of Women in Cybersecurity." Panelists include Deborah Dixon, senior VP and global CISO at Best Buy Co.; Roseann Larson, VP and CISO at VF Corporation; and Lauren Dana Rosenblatt, executive director and global head of cyber threat management at Estée Lauder Companies.
The panelists will discuss their journey into the field, the ways to eliminate barriers for aspiring female leaders and how the industry can help shift this trend for the future. According to Women’s Society of Cyberjutsu (WSC), women represent a mere 11% of the world’s information security workforce.
The 2017 Retail Cyber Intelligence Summit will bring together 200 CISOs and their teams from the greater retail and consumer services industries — including restaurants, hospitality, gaming properties, consumer product manufacturers and more — to share best practices, gain insights and, most importantly, network with other information security professionals to build trust.
“Our annual Summit provides the perfect opportunity to continue to develop and build solid peer-to-peer relationships within our community, with the government and cross-sector relationships, helping to expand the real-time sharing of cyber threat intelligence and better protect the industry as a whole,” said Suzie Squier, executive director of R-CISC. “The agenda addresses the key challenges and issues of strategic retail leaders and tactical practitioners.”
The R-CISC is the trusted cybersecurity community for retailers, consumer product manufacturers, grocers, hotels, restaurants, and cybersecurity industry partners worldwide.
More Information on the 2017 Retail Cyber Intelligence Summit can be found on Summit.r-cisc.org.
Discount giant’s inventory replenishment efforts are ‘top shelf’
Walmart is ensuring all in-store merchandise is ready for shoppers when they want to make a purchase.
The discount giant manages “millions” of items — making for a complex process behind the scenes. It's a process that requires constant monitoring, "and can sometimes take associates away from the sales floor where they would otherwise be helping customers,” Cristy Brooks, senior director – innovations development, Walmart U.S., wrote in a blog post on the company's website.
As a result, Walmart is experimenting with new processes to streamline in-store replenishment. Its “Top Stock” system moves back-stock inventory to the top shelves on the sales floor.
“By keeping additional merchandise closer to where it’s sold, we can maintain fuller shelves while keeping a better in-the-moment read on inventory,” Cristy explained.
The extra space now available in the back room is being leveraged in different ways. For example, some stores are using the space to support the retailer’s growing pickup service of online grocery orders — a program that requires adequate space for fulfillment and order storage.
Top Stock also reduces Walmart’s rental of temporary inventory trailers. Now the chain uses “a small fraction of what it was just a few years ago,” Brooks wrote.
Top Stock also frees up space that can be used for Walmart’s career-building education program. For example, the chain's store in Morrisville, North Carolina, reduced inventory in its back room by 75% within two months of implementing the system. With the available space, it was able to open an Academy for associate training.
“When we commit to coming up with unexpected ways to do the small things better, we not only become smarter and more efficient, but create a big win for our customers at the same time,” Brooks added.