Like many retail customers, I do most of my shopping on the weekend, hoping to get in and out as quickly as possible. I will usually head to one of the major department stores. I find what I am looking for, then wander around the floor looking for a sales assistant to take my money. As I wander, I might finally find a register that is open, having passed at least a few closed checkouts along the way.
I join the long queue and wait… and wait! If I really need what I am buying, I deal with my frustration and continue to wait. But, on occasions, I have walked out, leaving behind the item I wanted to purchase.
Has this happened to you? It seems to be more and more common, and in complete contrast to the very nature of retail. Willing customers walking out empty handed and irritated – it’s crazy!
Retailers have many systems in place for managing staff costs
In my experience, this is one of the most time consuming and frustrating challenges that leaders face. The biggest expenditure for any company is its workforce, but understaffing is a dangerous solution. It can lead to overworked staff, employee stress, poor staff engagement and high turnover, not to mention unsatisfied customers. The old adage is true: ‘You need to spend money to make money.’
A study into retail staff scheduling found that aligning staff levels with changing footfall patterns can result in a 7 per cent increase in sales and a 5.7 per cent improvement in profitability. Meanwhile, overstaffing was found to reduce profitability by just 2 per cent.
The clue is in the name: salespeople drive sales. As outlined in the Harvard Business Review, “For every dollar a retailer saves on staffing costs, it may be losing several dollars in revenues and gross margin if customers leave a store empty-handed because they can’t find a knowledgeable employee to help them.”
I recently listened to an address by the chair of the board of a major department store. He explained that the store’s results had been disappointing for the first half of the year and, as a result, there would be store closures. Investment in online shopping and a focus on products that drive a higher margin.
I couldn’t help but think, ‘Why not invest in your people?’
Yes, weekend staff do cost more, but that is when foot traffic is at its highest. That is when customers want to buy, and that is the greatest opportunity to increase your sales.
There is no doubt bricks-and-mortar retailing is facing enormous pressure. But good staff – and enough of them – is crucial to performance.
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