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Hey, retailers, stop being so stubborn …

Hey, retailers, stop being so self-righteous ..

We are now a quarter of a century into the 21st century, yet many retailers are still adopting last century’s organizational models and working practices.

The customers are becoming more and more demanding, the tidal wave of technological developments is almost impossible to keep up with, and the omnichannel approach requires more and more dedication.

In the present retail landscape that is not known for its high-profit margins, these trends are causing anxiety and high-rising costs.

Certain retailers continue to insist on the model that made them great and is still doing fine, but how much longer?

The time to design the operating model for the future is today, not soon!

Technology is already making the supply chain and headquarters more efficient, but it is still far from happening on the retail floors. A person-centric shopping experience based on facial recognition, for example, has long since ceased to be science fiction, and several hundred new technology applications are about to flood the retail floor.

Technology aside, “Activity-Based Scheduling” is the single key to happy customers, an engaged workforce, and massive efficiency improvements today. The players who have well mastered this game will have a substantial edge over the competitors.

Over the past decade, most retailers have implemented efficiencies of up to 15%. Today, competition and the race for demanding customers are fiercer than ever, and world-class planning and scheduling have become a must.

The challenge is to predict as accurately as possible how many staff with what competencies, at what moment, for how long, and in which area of the store to place them so that customers get the experience they desire, there are no empty shelves, there are no more overworked employees and the payroll costs can be further reduced by 5-10%. Currently, most staff planning systems are coupled with financial sales forecasts. Although sales forecasts are an essential factor, they are not a sufficient basis for scheduling with a high degree of accuracy.

Therefore, to successfully deploy “Activity-Based Scheduling” the following six criteria are essential:

1) Every individual store is essentially different from all the others, and therefore an itemized calculation of the workload in each individual store must be performed, however briefly, independently.

2) Volume drivers must be accurately defined and forecasted, as reliability is a prerequisite.

3) The highest possible employee flexibility within legal constraints is necessary. The mix of permanent and flex workers must be optimal.

4) The employees with the appropriate skill set must be defined, attracted, trained, and deployed at the right time in the correct position in the branch. There is a time and place for deploying sales tigers, efficient shelf stockers, and skilled and creative store display associates.

5) A reliable and lean management system with clear productivity, customer experience, and revenue margin targets is vital.

6) Regional and store management must display the appropriate management behavior focused on implementing a culture of continuous performance improvement.

Only those retailers who manage to optimize their in-store operations will be able to survive in this very red ocean.  

The battle is not only being won on the store floor. Significant challenges include cost reductions in the value chain, reinventing the supply chain in an omnichannel environment where things have to be done faster and more intelligent, improved and innovative inventory management, future-proof sourcing, and breaking down the barriers that separate the IT department from the rest of the business, making the department eventually vanish and become an integrated part of the other units.