There’s a terrific metaphor in the ROI Report today by Matt Howard, who leads global sales and corporate marketing for Natural Insight, on the topic of in-store labor. He writes that retailers and Goldilocks have something in common when it comes to managing store operations for brick-and-mortar retailers:
“When store labor is heavy, payroll expenses go up and operations run hot. When store labor is light, conversions go down and operations run cold. However, when store labor is perfectly aligned with defined plans, then operations run just right. And when operations run just right, consumers receive the right amount of help from store associates, conversions go up, important tasks are completed on time, margins improve and everyone wins.”
So how do we ensure that this alignment between staffing and shopper needs is “just right”?
If you’re overstaffed, you waste precious labor hours; if you’re understaffed, the customer experience suffers. A recent article in USA Today sums it up well:
“Increasingly sophisticated analytics tools are enabling retailers to better cater to in-store customers by tracking foot traffic and shopping behavior, effectively deploying employees within areas of a store, and scheduling them during peak hours.”
By integrating directly with time-and-attendance systems, comprehensive in-store analytics can show you exactly when and where staff numbers are under or over the optimum, and how to shift resources to make the most of your budget spend. For larger stores, in-store analytics can compare staffing and conversion among different departments, floors, or areas, enabling you to shift personnel to where they provide the most benefit.
As I said in a brief interview with the reporter of the USA Today article above, retailers typically see a 6 to 8 percent sales increase in the first year: “It often starts with correcting a misalignment between staffing and traffic; simply moving staff from one day to another has led to [sales] improvements.”
In-Store Analytics also give you clear visibility into staff performance. For each sales person and cashier, you can track a number of key performance indicators (KPIs), including sales, conversion rates, and number of items sold. This integration of POS analysis with your traffic data helps you understand who your most productive teams are and how to optimize your schedules.
TCC, the largest Verizon Premium Wireless Retailer with 300+ Verizon Wireless retail stores nationwide, maps staffing models to traffic counts to put the best people to work during the busiest times. Home Decor Outlets, one of the largest retailers of discount furniture in the U.S., uses in-store analytics for more visibility into store traffic to accurately measure conversion rates, and thus hold sales associates more accountable for their stores’ performance. Pressed Juicery, a cold-pressed juice bar expanding to 50 locations this year, measures conversion by time period and staffing level to identify opportunities to increase sales or reduce costs. With insights into who is visiting and when, and how long and where they dwell, management can know whether staffing is fulfilling the needs of their customers.
Employing comprehensive in-store analytics in your stores gives you the opportunity to scrutinize staffing decisions and optimize them for maximum sales and cost efficiency. Whether it’s shifting resources to make the best use of existing payroll or justifying additional investment for increased conversion, the most efficient use of this valuable resource depends on having the right information.