The Science of Retail Harmony

by | May 15, 2017

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The Science of Retail Harmony

Stores and restaurants schedule employees based on demand:

A restaurant manager may say, “It’s going to be nice out on Sunday. Better schedule more waiters to cover the patio.”

A clothing store manager could say, “There’s going to be a music festival in town next week. Better schedule more associates to handle the crowd traffic.”

A furniture showroom manager would likely say, “My best salespeople always work Saturdays and Sundays, our busiest days.”

Most demand-driven businesses don’t have fixed working hours. People work variably, depending on the circumstances, the customer demand. The most successful retailers, then, have found a way to balance their business needs with those of their people.

In other words, demand-driven success is all about:

  1. Being able to predict labor demand for a specific date and time (a business need)
  2. Being able to fill that need, gracefully, within the confines of laws and policies and personal availability (a people need)

Want to increase your conversions and average transaction value, among other benefits? Being a balanced organization—one that harmonizes economics and people—will help you do so.

Here’s how to strike that balance …

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Balance: The Building Blocks

Essential to a productive, harmonious retail store is being able to both predict labor needs (forecast) and fill those needs (schedule). Modern workforce management software automates this process for retailers, making it an efficient, accurate method that helps employers save money while making money. But more on that later …

Essential to a productive, harmonious retail store is being able to both predict and fill labor needs.

First, here’s a quick forecasting and scheduling breakdown:

1. Forecasting: What does the business need?

A forecasting solution uses historical data (e.g., traffic and sales, dates and times) to predict how many employees a store needs to schedule, and when.

2. Scheduling: What do the employees need?

A scheduling solution aligns with the labor forecast while also taking employment factors (e.g., personal availability, working rules, scheduling policies, compliance laws) into account.

Balancing these two factors in a demand-driven, retail space is important. For example, consider what happens if a store puts too much emphasis on:

  • Business needs = employee disengagement; lower sales and higher turnover
  • Employee needs = missed business opportunities; lower sales and more dissatisfied customers

Balance is essential to maximizing productivity and sales, to maximizing retail success.

But what does that success entail?

Success: Saving Money While Making Money

Successful demand-driven organizations are good at two things:

  1. Saving money (i.e., spending smarter, not more)
  2. Making money (i.e., capitalizing on opportunities)

Forecasting and scheduling (F&S) will help you do both.

Here’s a breakdown:

Saving money

F&S automation can help you:

1. Gain proactive visibility into your scheduling costs.

A slow Tuesday-evening shift shouldn’t be scheduled the same as a busy Saturday afternoon. Doing so wouldn’t make sense given the demand difference. Over-scheduling a shift will cost you in labor. Under-scheduling will cost you in sales.

Save money: F&S takes the guesswork out of creating a schedule. It tells managers how many people the demand calls for.

2. End unnecessary overtime.

Salaried workers (depending on their pay) get time-and-a-half for overtime, which is often incurred not out of necessity but, rather, poor scheduling. It’s an unforced error as far as cost goes.

Save money: A forecasting and scheduling solution won’t schedule an employee to work over 40 hours a week unless it’s necessary, resulting in a lean weekly schedule that’s also fair.

3. Schedule salaried staff to work 40 hour per week, consistently.

You also wouldn’t want a salaried employee working less than 40 hours per week because they’re going to get paid the same regardless. This is scheduling inefficiency at its worst.

Save money: As a rule, F&S wouldn’t let this happen. It would automatically prioritize filling every salaried employee’s week with 40 hours of work.

4. Save time on schedule creation.

Retail managers spend a lot of time calling, emailing and texting their staff, asking and confirming, doing manual paperwork — all to create a schedule. Their time, of course, would be better spent on the sales floor, helping customers and training employees.

Save money: Besides giving managers full, instant visibility into employee needs and preferences, modern F&S solutions also let workers pick-up or swap shifts amongst themselves via an app.

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Making money

F&S automation can help you:

1. Increase conversion rates.

Not selling enough? It could be a staffing problem (e.g., long wait times at the register). Or an employee engagement issue (e.g., questions and requests are mishandled). Either way, it hinders customer satisfaction and, in turn, sales.

Make money: F&S increases sales by helping managers schedule the ideal number of qualified people for each shift. This promotes better customer service.

2. Grow your average transaction value.

Associates who aren’t up-selling may not care enough, they may be disengaged. Or, perhaps, a lack of training and experience is holding them back. In any case, it’s a missed opportunity for the business.

Make money: Managers using F&S can schedule the best people to work the busiest shifts. Doing so enables retailers to capitalize on periods of high-demand.

3. Improve the customer experience.

Angry customers leave negative online reviews. They tell their friends and family about the bad experience they had. When asked, they rant. Angry customers will eat an organization alive.

Make money: F&S provides an accurate glimpse into the future. It helps managers make important decisions around circumstances that would otherwise be difficult to anticipate. For example: How many registers should be open to meet customer demand on April 16 at 2:00 PM?

That’s a tough question to answer, unless you have the data.

Angry customers will eat an organization alive.

4. Reduce employee turnover.

Protracted hours, slow shifts, denied vacation time-off: These issues keep employees bouncing from one opportunity to the next, hoping to find a place that provides them with a modicum of control.

Make money: F&S helps keep people employed, which is in every organization’s best interest because, on average, replacing an hourly retail worker costs $3,328. Over time, the price of attrition adds up.

A forecasting and scheduling solution gives employees control over the issues that are important to them, the issues that are at the root of most turnover.

Too long; didn’t read:

The most successful demand-driven organizations are harmonized: They’ve found a way to balance their business needs with those of their employees.

Whether you run a restaurant, a retail store, or a two-acre showroom, forecasting and scheduling to your true demand will enable you to save money while making money.

Harmonize.

A modern forecasting and scheduling solution will help you do so.

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