Company News • 08.04.2016

The perfect labor storm is brewing for retailers

Survey reveals 50 percent of retailers are unprepared for future labor challenges

Photo: The perfect labor storm is brewing for retailers...
Source: JDA Software Group

Amid ever-expanding customer needs, increasing complexity and new and shifting labor regulations, retailers find themselves facing greater challenges than ever before when it comes to managing their workforce.

The new JDA Voice of the Store Associate Survey of more than 250 U.S. store managers by JDA Software Group, Inc. revealed that half of retailers surveyed are not prepared to meet new industry challenges and many aren’t enacting changes quickly enough to keep up.

Half of retailers aren’t prepared to weather the labor storms of today’s retail industry

The survey found that 52 percent of respondents have not yet incorporated a modern Workforce Management (WFM) solution into their planning process and continue to rely primarily on outdated forms of scheduling, like pen and paper, a whiteboard and or an Excel spreadsheet. These antiquated scheduling solutions likely contribute to more than 50 percent of respondents admitting to feeling only somewhat prepared to staff appropriately to meet customer demands. Despite not feeling well prepared, nearly 50 percent of respondents also reported they have no plans to replace their current workforce solution.

“We thought the findings of the recent JDA Voice of the Store Associate Survey were shocking. The research raises serious questions as to how much attention retailers give to managing their staff efficiently, predicting customer demand needs and complying with new or pending labor regulations,” said Tyler Owen, senior director, Global Solutions Strategy, Store Operations, JDA Software.

Photo: The perfect labor storm is brewing for retailers...
Source: JDA Software Group

Controversial on-call policies remain prevalent as many struggle to predict staffing needs

With many retailers lacking automated systems to predict staffing needs, 2 out of 5 respondents are too understaffed to provide adequate service to customers at least 5 times per quarter. Of those respondents whose service is regularly impacted by understaffing, 47 percent reported having to pay overtime for additional employee hours worked between 5 and 15 times per quarter, or as many as 60 occasions per year. Seventy-five percent of respondents say they are overstaffed between 1 and 5 times per quarter.

A little over half of respondents still claim to practice some form of the controversial on-call scheduling practice for their retail business. Among respondents who practice on-call scheduling, only 20 percent are using automated software, with 80 percent claiming store management handles it directly.

Retailers blown off course from complying with pending labor laws

State and federal agencies are proposing and passing new labor laws that will have a direct effect on how retailers manage and pay their staff members. For example, the Department of Labor has proposed an update to the Fair Labor Standards Act (FLSA), which would raise the minimum salary threshold required to qualify for exemption from minimum wage and overtime requirements, affecting a proposed 4.7 million workers. Ending on-call practices and promoting fair, predictable schedules are at the center of some recent state and city regulations, including from the San Francisco Worker Bill of Rights, Hours and Scheduling Stability Act of 2016 District of Columbia, New York’s Attorney General Office and the City of Seattle’s predictive scheduling bill.

While raising minimum wage (61 percent) and the Affordable Care Act (53 percent) were reported as having a major effect on retailer’s labor costs and procedures, the Fair Labor Standards Act and pressure to end on-call were seen as having a small or no effect on operations by 61 percent and 65 percent of respondents, respectively.

Photo: The perfect labor storm is brewing for retailers...
Source: JDA Software Group

Omni-channel fulfillment causes turbulence for staffing allocation

While the majority of retailers offer Buy Online Pick up In Store (BOPIS) and Buy Online Return In Store (BORIS) as fulfillment services to customers, around half also offer Buy Online Ship From Store and Buy In-store Ship to Home offerings. These additional fulfillment offerings are only going to increase in future months according to respondents, with additional staff needed to be trained and allocated to support growing customer demands.

Clearer skies ahead with better WFM solutions

Home improvement retailers, which have been seeing strong quarterly earnings, were most likely (57 percent) to feel prepared to predict the need for additional staff for increased customer demands. They were followed by apparel/home goods (57 percent), grocery stores (54 percent), and big box stores (45 percent). On the opposite end, sporting goods retailers, many of which are struggling with earnings and closures, were most likely to say that they only felt somewhat prepared (73 percent) and were using additional technologies to support their current WFM solution.

“I believe we are in yet another major retail disruption of the 21st century. The first was the smart phone, the second was the rise of fast fashion, and the third very important one is the rise of the millennial. A perfect storm has been brewing for quite some time as these three forces are aligning to force change in the retail store profitability model, and many retailers are still struggling with how to respond,” said Paula Rosenblum, managing partner, Retail Systems Research. “For instance, some retailers raised worker base pay, but then reduced the total number of hours available, which put them right back where they started. The bottom line is that payroll is going to have to become a larger percentage of sales, and retailers need to find a way to segment workforce into routinized task managers and customer-facing employees. Only then will sales start to rise, almost as a trailing indicator, rather than a leading indicator.”

JDA conducted a survey of 252 retail managers in March 2016. Access the infographic from the JDA Voice of the Store Associate Survey here to learn more.

Source: JDA Software Group

related articles:

popular articles:

Thumbnail-Photo: When customers become cashiers
01.10.2019   #epos systems #mobile payment

When customers become cashiers

Treading a fine line between traditional and visionary, between checkouts and codes

For years, we have done this in online stores: we fill our shopping cart, click to pay and are excited about our purchase. Thanks to the snabble app - now available at the Knauber Hobbymarkt in Bonn and at IKEA in Frankfurt – consumers can ...

Thumbnail-Photo: retail trends 3-2019: focus checkout zone
16.09.2019   #mobile payment #customer satisfaction

retail trends 3-2019: focus "checkout zone"

Shopfitting, technology, marketing: What does a checkout have to do nowadays?

Read our latest edition retail trends 3-2019 online as an e-paper. ...

Thumbnail-Photo: Denmarks largest garden center chain is chasing a green profile...
26.06.2019   #sustainability #electronic shelf labels (ESL)

Denmark's largest garden center chain is chasing a green profile

Electronic shelf labels for paper reduction

Plantorama introduces electronic shelf labels in all stores, which significantly reduces the chain's paper consumption. The project will strengthen the chain's green profile and will have a positive influence on the customer experience and ...

Thumbnail-Photo: 45th anniversary of the barcode in retail
01.07.2019   #barcode scanner #qr code

45th anniversary of the barcode in retail

GS1 US celebrates the barcode’s relevance as the backbone of commerce

GS1 US®, the information standards organization best known as the administrator of UPC barcodes, this week celebrates 45 years since the debut and first scan of the iconic barcode. On June 26, 1974, a pack of Wrigley's chewing gum carrying a ...

Thumbnail-Photo: Introducing a new, powerful mobile POS in Posiflex’s MT series...
25.06.2019   #epos systems #cashpoints

Introducing a new, powerful mobile POS in Posiflex’s MT series

MT-5310W from Posiflex combines the mobility of a tablet with the functionality of a fixed POS terminal. .

Today’s customers have higher expectations than ever when it comes to service. To meet and exceed customers’ ever-growing expectations, Posiflex is pleased to present MT-5310W, the latest addition to the popular MT series: a hybrid ...

Thumbnail-Photo: Innovative ICA store triples revenue
22.08.2019   #electronic shelf labels (ESL) #price labelling

Innovative ICA store triples revenue

Automatic price updates and product information at the shelf

Since ICA merchant, Jan Sikström, took over the ICA Ettan store in Sundsvall (Sweden) in 2016, he has almost tripled the turnover from SEK 15 million to SEK 40 million. Today, the store has 15 employees and approximately 5,000 different items ...

Thumbnail-Photo: New year brings new regulations
13.09.2019   #data management #receipt printer

New year brings new regulations

What are the big changes for German point of sales systems come 2020?

Big changes are coming to Germany’s point of sale systems starting January 1, 2020. Two terms that are tossed around in this connection are "Belegausgabepflicht" (Receipt Provision Ordinance) and ...

Thumbnail-Photo: Pay cash? Via code!
26.08.2019   #mobile payment #app

Pay cash? Via code!

Shop online, pay the bill offline

Barzahlen.de relies on good old cash. The concept of the Berlin start-up: shop online, pay in cash at the store. Swimming against the trend of fast online shopping and mobile payment is paying off, says Weina Wang, Head of Retail. In an interview, ...

Thumbnail-Photo: Silver Surfers: Older adults ride the wave of mobile technology and shop...
01.08.2019   #online trading #e-commerce

Silver Surfers: Older adults ride the wave of mobile technology and shop online

The increasing importance of e-commerce for senior citizens

You are wrong if you think it’s mostly young people who spend time online. Older adults are also increasingly embracing online shopping with enthusiasm.In this interview, Spencer Hinzen, Director of Sales, Central Region, Ruckus Networks, ...

Thumbnail-Photo: App creates personalised shopping experience...
26.08.2019   #mobile payment #app

App creates personalised shopping experience

The Swiss trading company Valora is opening its first cashless convenience store

The goods are chosen, scanned and paid for using the avec smartphone app. Mobile computer vision specialists Scandit’s scan engine is a key component of the customer-facing app. The future of shopping - whether online or offline - is ...

Supplier

Permaplay Media Solutions GmbH
Permaplay Media Solutions GmbH
Aschmattstr. 8
76532 Baden-Baden
iXtenso - Magazin für den Einzelhandel
iXtenso - Magazin für den Einzelhandel
Celsiusstraße 43
53125 Bonn
APG Cash Drawer
APG Cash Drawer
4 The Drove
BN9 0LA Newhaven
Superdata GmbH
Superdata GmbH
Ruhrstr. 90
22761 Hamburg
Delfi Technologies GmbH
Delfi Technologies GmbH
Landgraben 75
24232 Schönkirchen