Staffing Up For The Holidays
Let the games begin.
Retailers are gearing up for the Super Bowl of the holiday-selling season, when stores generate up to 40% of their annual sales and boost their staffs in light of the heightened shopping spree.
As technology reshapes the retail landscape at a dizzying pace, it’s also advancing the art and science of aligning sales and traffic patterns with in-store labor — particularly crucial during the make-or-break winter selling period.
These days, bringing one’s “A” game calls for retailers to take a more fine-tuned approach to forecasting their scheduling and staffing needs, while addressing an increasingly multichannel shopper.
Here’s a look at how workforce management solution providers Ceridian and Kronos are helping retailers boost their sales and margins this coming holiday season with new technology solutions built to better maximize in-store labor.
Multichannel shoppers: The rise of shop online, pick-up-in-store options is upending traditional buying patterns — and no more so than during the holiday season, according to Liz Moughan, director of the retail and hospitality group for Kronos, which counts national chains such as Family Dollar, The Container Store and Forever 21 among its clients.
And as the practice is popular with Millennial shoppers, who are expected to outnumber baby boomers in sheer size and buying power by 2020, attention must be paid.
Nonetheless, retailers still largely forecast their staffing and scheduling needs based on historical sales transaction and traffic data. This is generated by “what happens within the four walls of the store, not accounting for any demand that starts outside of the four walls, [meaning] shoppers who have bought online and will pick up in store,” Moughan explained.
With in-store pickup of Web purchases expected to reach a new tipping point this holiday season, retailers can no longer afford to ignore sales that originate online; if so, they’ll be understaffed. Indeed, holiday 2012 tells the tale of two retail approaches that each fell short, Moughan said.
Some merchants opted to ignore potential traffic from Web-generated consumers in anticipating their staffing needs, while others “threw a ton of payroll” at them without forecasting demand “to the point of diminishing returns.”
To help its retail clients address the omnichannel shopper, Kronos partnered this year with Manhattan Associates, provider of supply chain management software, to incorporate the new “Online Order Pick Up” driver into its forecasting planner. The new driver from Manhattan Associates uses historical and real-time data to gauge staffing needs just as it would for a brick-and-mortar store. The difference is that it forecasts labor needs generated by Web shoppers.
Simply factoring in that Web-originated shopper could mean a windfall for retailers. The online shopper is predisposed to outspend the traditional brick-and-mortar consumer, as she’s already made a purchase, Moughan said.
“She hasn’t come into the store to price match, browse or showroom. Why not try to take advantage of that? The opportunity to upsell and to increase the average transaction is huge,” she said.
Launched this summer, the feature enables retailers to schedule their most productive employees during the busiest times, integral to unlocking the sales potential of Web-originated consumers, Moughan said. It’s designed to work in tandem with Kronos’ new Schedule to Skill functionality.
“By matching your most productive employees to your most opportune selling time, it allows retailers to take advantage of a consumer who has already shown that they are going to purchase within your store, and allows you to further increase the average transaction value.”
Guitar Center: Specialty retailer Guitar Center bumps up its 5,600-unit sales force by only 1% during the holiday season.
But like most retailers, the chain’s sales and foot-traffic patterns change dramatically during the make-or-break selling period, when so much rides on “the magic of trying to anticipate when the peak holiday traffic is going to hit,” said Chris Salles, director of store and labor for Guitar Center’s 250-plus stores.
When Dec. 25 falls is the biggest indicator of the rhythm of the selling season, according to Salles.
“Whether the 25th falls on a Saturday, Monday or Thursday drives very different traffic patterns,” he said.
For more than a decade, Guitar Center had been tracking its holiday transactional data, which includes sales, margins and average basket size, in 15-minute increments to determine its demand curve: the labor it needs at any given time to serve customers.
The ability to analyze the demand curve of prior holiday seasons that mirror one that’s coming up is key to making informed staffing and scheduling decisions.
But Guitar Center had been making those calls “with mostly intuition and a little science, relying on raw data sources and bright people with spreadsheets,” Salles said.
Store managers were faced with making sense out of that raw data, comprised of “millions of lines of information” representing sales transactions for Guitar Center’s various departments — from guitars and drums to keyboards and pro audio.
In late 2009, Guitar Center turned to Ceridian to replace its outdated, manual-scheduling system with Dayforce HCM solution, a state-of-the-art, cloud-based workforce and human capital management system.
The system is able to forecast Guitar Centers’ staffing and scheduling needs based on historical transaction patterns and pinpoint peak-sales periods by departments in 15-minute increments.
“We feed Dayforce HCM those millions of lines of information and using predictive modeling, it comes up with a labor demand forecast of what we can expect within the next few days, weeks, months,” Salles said.
It can also more precisely optimize the talent of its top-performing sales staff, scheduling them when Dayforce HCM predicts sales transactions will spike and providing a better experience for customers, he said.
“Guitar Center has many different departments that offer retail products and services, education, consulting and the like that make a transaction more complex — as each may have different combinations of retail sales and service by many different [sales associates] with different skills,” Salles said. “The Dayforce solution allowed us to better plan for these varying levels of coverage in a more accurate manner than ever before.”
The retailer expects to reap cost savings from Dayforce HCM this holiday season, according to Salles, who noted that, with the solution, “we’ve been able to be more efficient with labor dollars spent without sacrificing top-line sales.”
Barbara Thau is a New York City-based business writer.
Systems Integration, Data Integrity Ensure Omnichannel Success
To provide customers with true omnichannel shopping capabilities, retailers must internally align all store and ERP functions. Mike Burge, founder and CEO of integrated retail enterprise platform provider MI9, recently spoke with Chain Store Age about how effective omnichannel retailing works and how retailers can leverage IT systems to achieve success in an omnichannel environment.
What are the main objectives of omnichannel?
The main objectives are to increase sales and market share by allowing customers to purchase, ship and return merchandise anywhere they want. The retailer must manage the merchandising, transaction processing and fulfillment steps closely to ensure that the shopping experience is easy and intuitive for the customer and still makes sound business sense.
What are some of the biggest obstacles to omnichannel retailing?
Customers increasingly prefer to hopscotch through multiple channels to complete their shopping. Many retailers, however, designed their channels to function best as independent business units and therefore run multiple disparate systems for merchandise management, e-commerce, POS, order processing and warehouse management.
Very often these systems are poorly integrated, so it is difficult to make omnichannel work seamlessly or to get a dependable cross-channel view of performance. Data integrity can often vary greatly between these separate silos of information.
How can the IT department overcome these obstacles?
The key challenge for the IT team is connecting and integrating all channels so that they can operate interdependently sharing a common view of sales, inventory, scheduled deliveries and customer data. This seamless integration of channels can only be achieved by migrating to a modern systems architecture that facilitates immediate communication among all parts of the enterprise, as well as with collaborative trading partners, such as shippers, tax services, etc.
To effectively implement the objectives of ‘sell anywhere, fulfill anywhere, return anywhere,’ retailers’ systems must be able to process all sales and inventory transactions in real time.
How can retailers ensure that they are able to "fulfill anywhere?"
When the buyer has access to a fully integrated system, he or she can use item-level demand forecasting to accurately anticipate inventory requirements at each fulfillment point. The buyer can then work collaboratively with suppliers to establish delivery schedules that cover peak demands without requiring the chain to carry excess inventory.
The buyer can also leverage the omnichannel infrastructure to support regional order fulfillment and to manage direct shipments of select merchandise directly from the supplier to the customer. These changes make more merchandise available to shoppers while reducing overhead, such as shipping costs, inventory and the need for excess warehouse space.
What specific steps is MI9 taking to help retailers succeed in an omnichannel environment?
MI9 brings together all the tools omnichannel retailers need to profitably provide a seamless omnichannel shopping experience in real time. MI9’s fully integrated system unites all store-level and ERP functions and provides users with information in real time anywhere in the enterprise via the MI9 Retail Hub, which provides up-to-the-moment data on demand to any device with a browser.
All channels share one view of the customer through the central database that is also a repository for all product information and images. All channels also share a comprehensive merchandising system, MI9 Merchant, that helps merchants with their forecasting, allocation, item management, purchasing and vendor management. Inventory lookups, cross-channel fulfillment, customer loyalty and other functions are all managed through this one integrated system.
Social media platforms offer retailers a chance for direct engagement with consumers as well as access to highly personalized data, all in real or near-real time. During the holiday season, with its intensified levels of competition and customer distraction, having the type of direct promotional connection with customers that social media can offer is more crucial than ever.
Yet for many retailers, how to effectively leverage social media for holiday promotions and marketing is something of a mystery. Here is a brief review of three vendors that can offer retailers assistance on a particular popular social media platform: 8th Bridge specializes in Facebook, Crimson Hexagon specializes in Twitter, and Piqora specializes in Pinterest (with the added bonus of Instagram and Tumblr).
8th Bridge: 8th Bridge provides the Facebook-oriented Social Graphite platform, which combines what the vendor terms social shopping engagement with social identity analytics. Social shopping engagement features allow retailers to integrate customer feedback with the Facebook Custom Open Graph and also use it to trigger stories into the timelines of customers and the tickers and news feeds of their friends. In addition, customers can curate and share collections of products from a retailer’s site on their Facebook pages, receive special social incentives and rewards, and provide social ratings of products.
These activities lead to social identity analytics, which provides three core capabilities of snapshots, crowds and campaigns. Snapshots are quick social profiles of individual customers, including Facebook profile photo; interests; product tastes; and key metrics about their influence, expertise and brand awareness. Crowds organize snapshots into targeted groups based on customizable metrics, and campaigns are then built around the crowds. 8th Bridge lets retailers offer a number of social engagement features to customers, with the retailers using the resulting data to build individual and group profiles for better targeting.
8th Bridge technology is designed to help retailers apply Facebook as a tool for developing critical social brand advocates whose voices are more likely to be heard over the holiday promotional din than the voices of marketers and advertisers. It’s also intended for developing highly segmented customer profiles that will help personalize branded holiday campaigns.
Crimson Hexagon: Crimson Hexagon offers the ForSight platform, based on a proprietary mathematical algorithm known as BrightView, to perform analysis of social media commentary, including keywords and sentiment to provide insight into how consumers feel about a particular retailer, product or brand. Retailers can apply the solution to analyze both a real-time stream of social media conversation and historical commentary, including the full Twitter firehose as well as postings on social media platforms, such as Facebook, YouTube and blogs.
Retailers can perform sentiment analysis on up to 12 categories for a specific topic and define their own categories as well as use preset offerings. In addition, BrightView analyzes social conversations holistically, resulting in ForSight delivering contextually relevant data with a minimal amount of "human training" of the tool. Most significantly for retailers running holiday promotions, Crimson Hexagon offers real-time insight into what consumers are talking about and feeling. This allows quick adjustments to short-term holiday campaigns whose effectiveness cannot usually be determined until well after the holiday season is over.
Piqora: Piqora presents itself as a marketing suite for the visual Web, offering solutions that aid marketing efforts across the visually oriented Pinterest, Instagram and Tumblr social networks. On Pinterest, Piqora enables retailers to customize and track pin-based contests and promotions, as well as track trending images, content and influencers, and perform competitive analysis.
Retailers can also leverage Pinterest technology to track their top photos and videos, as well as top photos and videos of competitors and top influencers and hashtags driving brand engagement, on Instagram. Similarly, Pinterest enables retailers to track trending images, brand reach and engagement, and competitor performance on the Tumblr microblogging site.
The holidays are an emotional time for many consumers, and smart retailers know the right visuals can have a huge impact on a shopper’s emotional state. Piqora lets retailers maximize the impact and return of visually based social campaigns and, much like Crimson Hexagon, make real-time adjustments based on tracking of social media trends as they happen.