Labor Management: A Key to Omnichannel Success
There has been a great deal written about omnichannel’s impact on the store, multichannel shopping behaviors and cross-channel fulfillment. What seems to have gone unreported, however, is the tremendous impact labor costs can have on profitably delivering the omnichannel shopping experiences consumers now demand.
Where the rubber meets the road is with the store associates who ultimately determine omnichannel success or failure. Retailers must adjust their in-store labor plans to ensure customers, both inside the store and at home waiting for a delivery, are satisfied. To accomplish this, successful retailers are shifting their perspective of associates from a cost to be minimized to a strategic asset which needs to be leveraged effectively to ensure success across all channels.
Providing seamless omnichannel shopping experiences puts new demands on labor, requiring new skillsets and innovative methods for planning, scheduling, and managing labor resources. Stores which were simply selling locations are now transitioning into complex fulfillment, shipping and returns centers. Store associates hired for their selling and/or stocking skills now must also fulfill orders, arrange parcel shipments or home deliveries, process even greater volumes of returns, and provide new services. In addition, they must serve a much more digitally-aware customer who may have more information about your products at their fingers tips than your store associates.
At the same time, the rising tide of social and regulatory pressure for higher minimum wages, workers’ rights and proposed changes to the Fair Labor Standards Act are making store labor expense a bigger hit to margins and profitability. This combination of the increased value of labor for omnichannel services and labor’s increased margin impact enforces the shift towards a strategic workforce.
A recent global study of CEOs conducted by PwC for JDA Software found that only 16% of respondents said they could address omnichannel demand profitably, however. Since labor is a major component of cost, and margins are already thin, it is clear that optimally deploying labor resources will have a huge impact on meeting consumers’ omnichannel shopping expectations profitably.
Turning store labor into a strategic asset for omnichannel success requires more than just assigning the right associates to the right places each day. To effectively and profitably provide seamless omnichannel shopping experiences requires a three-step planning process that ensures the right pool of associates is always available to meet customer needs.
Having the right volume of staff with the right skills available to meet daily requirements starts with developing long-range staffing plans that ensure staffing levels will match needs. These must balance expected traffic and task workloads with known constraints such as budgets, capacities and skillsets.
Long range staffing plans provide the input that short-term staff planning and scheduling solutions use to ensure the right number of associates with the right skills are scheduled to meet expected order patterns and customer demand for each store, each week and each day within budget constraints.
During the day, workloads can quickly shift and managers must be able to react quickly and profitably. Managers not only have to adjust traffic-based resources, they now must also adjust fulfillment resources to deal with intra-day shifts in the demand for services such as “click-and-collect.”
Omnichannel has changed how labor must be managed to effectively support consumers’ seamless shopping experiences. This requires a new approach encompassing long range, short term and intra-day planning and scheduling that makes the workforce effective, agile and productive, and provides managers and associates mobile user experiences that conform to the way they work.
The benefits include more efficient and effective use of labor, improved customer service levels, and improved margins. But most importantly, this advanced approach to labor management ensures companies can provide the seamless shopping experiences that create strategic advantage — profitably!
Tyler Owen is senior solutions strategy director, JDA Software.