LAS VEGAS, Nov. 06, 2007 — In past years, retailers have attempted to level the playing field in a competitive environment through better management of the supply chain. Yet, competition — from both traditional and internet retailers — continues to grow, and now customer service trumps low costs. Today, customers are demanding quality, convenience, and personalized service — over price1.
A recent benchmark survey on "The State of Retail Workforce Management", conducted by Retail Systems Research (RSR), and sponsored by Kronos® Incorporated, indicates that retailers may have already received this wake-up call, and are being proactive in removing barriers to their ability to deliver a superior shopping experience. Sixty-six percent of the 160 global retail executives and managers that were surveyed noted that they are focused on providing a high-touch customer service strategy, and skilled employees play an important role in it. An additional 24 percent consented that employees, regardless of skill sets, play an important role in customer service. Only nine percent stated that they offer a low-touch customer service strategy where employees play a supplemental role.
"The survey results clearly indicate that the days of the low-price model in retail are numbered," said John Anderson, global practice leader of retail at Kronos. "The future of retail lies in customer centricity, and creating and sustaining customer satisfaction will ensure differentiation and success in the long term. The workforce plays a huge role in this customer-centric journey. What retailers need are satisfied and knowledgeable employees consistently doing the right thing in the right place at the right time. This is not an easy task but one that can be achieved when the workforce is managed smartly."
The survey reflects this awareness among retailers, and according to 78 percent of the respondents, quality and consistency of customer service, and driving store sales are the top business issues they are looking to improve through workforce management technology.
"Retailers need to fix the disconnect between their offerings and customers' priorities. Such a disparity is a major threat in an age where customer service is valued over price," said Nikki Baird, managing director of RSR. "Shoppers have choices like never before. Therefore, understanding customer needs is essential — and serving them accordingly is critical. Workforce management has always been fundamentally tied to improving store productivity — research now shows linkage to the customer experience."
Hiring the right candidates isn't easy in the retail industry where the war for talent is fierce, and turnover is highest within the first 90 days. Top workforce hiring and managing challenges as reported by the respondents include finding good employees, keeping them, and maximizing labor productivity. Increasingly, retailers are turning to advanced talent management technology as part of a comprehensive workforce management solution to hire the best candidates and improve workforce tenure.
Retail environments are unique because of dispersed operations where productivity and execution need to be managed at both store- and company-level. Adding to the mix are the challenges of ensuring effective communications between corporate offices and stores. Fifty-nine percent of respondents stated that over the past three years, the amount of work sent to stores by corporate and field management has increased, yet 73 percent agreed that there is a lack of integration between task and workforce management systems. These challenges can be addressed by taking a holistic approach that integrates talent, workforce, and store execution management practices and solutions.
Managing the dynamic between employees and customers has never been more important. Seventy-eight percent of respondents agreed that over the last three years, the role of workforce management has become even more critical to enabling enhanced customer service and driving store productivity. Optimization of store scheduling allows retailers to consistently deploy their workforce based on the skills, availability, and work/life preferences of their employees in balance to store-specific sales targets, labor budgets, and detailed customer demand patterns.
Timely sales and labor data can provide deeper visibility into store operations, enabling effective decision making. Analytics tools are increasingly growing in demand. Ninety percent of the respondents considered analytics as a relatively important component of workforce management. However, analytics solutions are still at a premature adoption stage in the current retail environment with only 10 percent of the respondents having fully deployed labor analytics tools.
This announcement was made from KronosWorks™, the industry's largest venue for exchanging ideas in how to effectively manage the workforce. KronosWorks is taking place this week in Las Vegas. Nikki Baird, managing partner, RSR, and John Anderson, global practice leader of retail at Kronos, will be speaking at the event.
The "State of Retail Workforce Management" survey was conducted online by Retail Systems Research on behalf of Kronos in August 2007 and September 2007 among 160 global retail executives and managers. Participating retailers operate headquarters and presences in Asia/Pacific, Europe, Latin America, Middle East and/or Africa, and North America.
Retail Systems Research ("RSR") provides insight into business and technology challenges facing the retail industry ecosystem, and thought leadership and advice on navigating these challenges for specific companies and the industry at large. RSR covers all aspects of retail from store operations, to merchandise optimization, through cross-channel and multi-channel issues, and private label management. From benchmark reports on the state of the industry, to analysis of breaking news, RSR is focused on turning data into easily digestible information. All research is available for reading free to qualified retailers and their business partners. Learn more about RSR at www.retailsystemsresearch.com.
Kronos Incorporated empowers organizations around the world to effectively manage their workforce. At Kronos, we are experts who are solely focused on delivering software and services that enable organizations to reduce costs, increase productivity, improve employee satisfaction, and ultimately enhance the level of service they provide. Kronos serves customers in more than 60 countries through its network of offices, subsidiaries, and distributors. Widely recognized as a market and thought leader in managing the workforce, Kronos has unrivaled reach with more than 30 million people using a Kronos solution every day. Learn more about Kronos at www.kronos.com.