Supply chain innovation could boost the retail labor force

Of the many challenges retailers continue to grapple with — high costs of goods, transit, managing out-of-stocks and more — the labor shortage could be the most worrisome.

According to the U.S. Chamber of Commerce, the hospitality and retail trade sectors have the two highest quit rates. What’s more, the retail trade sector has the most job openings, and the U.S. Chamber of Commerce said there are more unfilled jobs than unemployed workers with relevant retail experience.

For some struggling retail chains, this has caused them to implement “labor hoarding,” a strategy where retailers work to hold on to as many staff members as possible. Then, in the event employees do quit, retailers have the staff on hand to cover shifts, as well as have full coverage if business picks up.

Now adding to the conversation around managing retail labor is the role technology plays. To some industry observers, the idea of technology such as robots scanning inventory down a grocery aisle or automated picking systems in a warehouse can be viewed as ways to replace a labor force.

However, it’s more constructive to view technology as a supporting tool within retail operations. Whether it’s in the back of the house or moving down a store aisle, good technology innovation makes retail jobs less repetitive so associates can focus more on providing a better shopper experience.

Technology should support the staff retailers have, while making the jobs more engaging to better retain existing workers and help attract new ones. With AI and innovative technology systems, there are a number of ways where this is already happening:

• Mobile solutions down the aisle. Store associates are comfortable with tablets and smartphones; they already play a major role in everyday life. Retailers can leverage applications on mobile devices that sync up workflows for store associates. Staff simply open an app and can follow dynamic to-do lists, follow task-guided workflows and have a direct look into the supply chain in the palm of their hands. AI-powered systems can keep information updated in near real time, giving staff 24/7 visibility on inventory and a tool to communicate with shoppers on the store floor.
• Computer vision. Expecting humans to stand before a dizzying category shelf set and catch every pricing error or misplaced product is not possible. Any retailer doing this is likely frustrating store associates with tedious work and disappointing shoppers with out-of-stocks and misplaced items. But, with computer vision embedded onto devices like a tablet or shelf cameras, store staff have instant access to the “realogram” that accurately pinpoints compliance execution issues. An augmented overlay on the associates’ screen highlights where items are placed or where promotions or pricing tags are inaccurate. The computer vision technology is synced to updates through an AI-powered platform delivering timely accuracy and can instantly generate a list of out-of-stocks for staff, too.
• AI-powered kitchens. The centralized kitchen inside food retailers is becoming a calling card for their businesses. Maintaining inventory to keep up with recipes and menus is a tall order, but AI-powered inventory management systems that specialize in fresh and kitchen management can support staff with direct views into where products are coming from suppliers, accurately forecast ingredients for meal preparation and monitor which fresh products are close to expiring. These multi-faceted challenges are difficult to address adequately with manual processes, but AI can support staff with speed and accuracy to run a smoother kitchen, reduce waste and maximize sales of high-margin prepared items.
• Voice-directed tools in the warehouse. While handheld devices may enhance the staff in the front of the store, they can potentially get in the way of staff in the warehouse. Staff working through shipments and stock can be more efficient if they can work hands-free. Wearable vests with voice technology can communicate to team members through earpieces and enable them to manage tasks more freely as opposed to constantly scrolling through a tablet for task and workflow updates.

It can’t go understated how important the retail and hospitality sectors are to the overall health of employment in America. In the grocery sector alone, nearly three million people are employed and there are hundreds of thousands of vacant jobs.

According to Deloitte’s 2023 Retail Industry Outlook report, seven in 10 retailer executives ranked labor as the number one challenge going into 2023. The report noted there were nearly 880,000 jobs unfilled going into the year.

Retailers can continue to invest in technology to help the staff they have, significantly reduce turnover and more successfully attract new employees. They can also look at AI technologies as a way to improve the overall shopping experience for consumers.

Retailers that use technology in the right way can help better connect shoppers with store staff, improve the shopping experience and make life easier for store staff — not replace them.