Staffing Up for the COVID Holidays: How Retailers Should Prepare

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Staffing Up for the COVID Holidays: How Retailers Should Prepare

By Chris Ventry - 10/30/2020
Chris Ventry
Chris Ventry

Because of COVID-19, this will be a year of shifts. Certain retailers are doing a significantly larger portion of the seasonal hiring than others, and different roles will be needed than in previous years. Where might retailers scale back on hiring, where should they staff up, and will shipping and delivery services be able to pick up the slack?

Holiday 2020 got off to a clear and unambiguous start in October with various e-commerce shopping sales events. There is no doubt that this holiday shopping season will look different than it has in the past. In fact, we were already seeing the holiday decorations make their way into neighborhood Home Depots and Lowe’s stores in September. Amazon’s 2020 Prime Day was changed to October from the usual July date to allow for operations adjustments to ensure safe working conditions, and many others followed.

Retailers will attempt to capture as much of the holiday spend as early as possible, both to make up for the “lost” months of March through June in terms of retail brick-and mortar-sales, and to drive traffic to stores while they remain open, in anticipation of a second phase of COVID-19 shutdowns.

Any successful sales recovery strategy for higher-end retailers will involve getting their former customers back into the store, spending online, or both. Thus, a more sophisticated seasonal hiring strategy may be required to execute on “clientelling,” that is, providing highly personalized engagement and messaging to former clients/customers to get them to come out and shop again.

Customers embraced e-commerce during COVID-19 out of necessity, but also because a large proportion of customers already preferred this channel—something that’s not going to disappear just because stores are now open, albeit under state and local restrictions. As a result, the volume coming into retailers’ call centers (and to Verizon, Visa, and most businesses, for that matter) has increased dramatically, exacerbated by the initial difficulty many retailers had in switching to remote workplaces for their customer care specialists.

Retailers do not want to leave potential and existing customers on hold for extended periods of time, so this will probably signal a pickup in seasonal customer service jobs. Some of these jobs may transition to full-time after the holidays, given the overall increase in non-brick-and-mortar volume.

Regardless of whether physical stores will remain open throughout (or beyond) the holiday period, more and more online orders will, at some point, touch a physical store. Given the advancements in true omnichannel inventory management, the product physically located in a store is no longer “stranded”—that item can be purchased online, pulled from the rack by a store associate, and either sent to an online customer or held for in-store or curbside pickup.

But pulling product from the floor to fulfill an online order is more labor-intensive than picking the same product from the shelves of a distribution center. So we are seeing job listings for in-store hourly workers to pick product, staff in-store online order counters, and run curbside pickup. Like distribution center work, this can entail a greater level of manual labor and strength, and thus may not be as attractive to the historical seasonal sales associate.

Another area of potential seasonal need for retailers is in their IT departments. We expect to see 50% growth in online traffic for many retailers over this holiday period. With record website traffic and visits comes the need to keep those sites up and running bug-free, ensuring easy navigation, and ultimately conversion to sales. Companies will need to invest in talent—full-time, temporary, and/or third-party providers—to ensure their site viability and regularity throughout the holiday period.

Retailers—not only Amazon—and third-party logistics and distribution centers will continue to drive retail job growth, even as brick-and-mortar store associates continue to lose hours and jobs due to store closures and COVID-19 restrictions. There has been much talk about raising the minimum wage; additionally, in many markets, these distribution center/fulfillment jobs pay more per hour than an in-store seasonal associate would have earned in the past.

Many job openings at distribution centers do not require post-high school education, so these jobs, both permanent and seasonal, are now open to a larger audience than traditional brick-and-mortar sales positions have been in the past.

Alongside the shift to online sales is a corresponding uptick in shipping volumes. As in years past, retailers will begin to offer various forms of expedited shipping options—some free, some at reduced rates—to ensure that customers receive their online orders prior to the holidays. With an overall increase in the number of orders being placed online for home delivery there is the real possibility of a “fulfillment crunch” where demand outpaces USPS, FedEx, and UPS ground supply. This squeeze may cause retailers to move up their holiday order cut-off dates by as much as a week.

While the holiday shopping season will certainly look different this year – for shoppers, retail workers, fulfillment and delivery workers – we anticipate a robust and active quarter for retail. Retailers should be in full swing with their preparations for increased and more defined staffing needs through the end of the year, and perhaps beyond.

The season is shaping up to be the first time in decades that, with so many factors suspended in the mix, the customer may actually have to wait to be king. But if retailers can get it right with staffing and online interface, in addition to their inventory and fulfillment, it might be a pleasant wait.

Chris Ventry is a VP at SSA & Company, a global management consultant focused on strategy execution, where he focuses on retail and CPG. He can be reached at [email protected].

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