Report: Retailers struggling to adapt labor practices in changing market

Dive Brief:

Some 62% of retailers are offering omni-channel services in their stores, which are having an impact on labor practices, according to a survey of more than 250 store managers by JDA Software Group, Inc.
In-store fulfillment, new labor legislation, changes to minimum wage, and the emergence of the millennial workforce are among the forces impacting store associates. Over half of retailers surveyed by JDA Software say they’re not prepared to adapt to this changing market.
The issue is being felt at the store level with balance hard to achieve: 40% of respondents say they are too understaffed to meet store service requirements at least five times per quarter, with 47% saying they had to pay overtime as a result. Meanwhile, 75% say they are overstaffed one to five times each quarter.

Dive Insight:

While the use of algorithms to determine when stores need to be staffed and when associates can be sent home is slowly being abandoned, there’s still a place for analytics when it comes to inventory management and omni-channel fulfillment from stores, experts have told Retail Dive. Past scheduling practices have wreaked havoc on employees' lives and have come under scrutiny from many state law enforcement agencies recently.

In the JDA study, 52% of store managers say they don’t feel prepared to schedule associates for new omni-channel tasks, and 52% say they are scheduling their store labor manually.

Brett Wickard, founder and president of “lean retail” software solutions firm FieldStack, told Retail Dive earlier this year that traditional chores like tracking inventory should be automated rather than done by workers with a clip board. That would provide retailers with superior data, and free up associates for more customer-facing or sophisticated work. Store associates should have access to customers’ order histories and personal preferences so they can provide professional knowledge and recommendations to meet customer needs, according to Wickard.

“When retailers set up their staff doing things that literally does not add value to customer service, just because the retailer doesn’t have the data available to automate that, that makes for a really tough day,” Wickard said.

As the JDA study points out, many millennials already have the digital skills that can help them succeed in a digitally-powered store. This could help retailers reach the millennial demographic, which has surpassed baby boomers as the largest generation alive and are entering their prime spending years.

"[Millennials] want store associates to be as knowledgeable and digitally empowered as they are," the JDA report says. "This means retailers must equip associates with mobile devices and apps so they can provide this level of service."