How Retailers Can Avoid Holiday Season Nightmares by ...
Transcript of How Retailers Can Avoid Holiday Season Nightmares by ...
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In the retail industry, one fear prevails over all others before the holiday shopping season, and it’s not something that you once thought lived under your bed. That fear [cue Jaws theme] is sub-par sales.
The holiday shopping season is a retailer’s final push to beef up annual sales and please as many customers as possible. October is the final month before that critically important time, and it’s essential to make final preparations and ensure every store is clean, well-stocked, adequately staffed, and poised for success.
But this is no small task. Labor shortages, immensely complex inventories, fluctuations in customer traffic, and uncertainty in the supply chain make optimizing the shopping experience more challenging than ever.
So, how can you avoid the typical nightmare scenarios of being unprepared for the holiday rush?
By streamlining your store operations strategy with intelligent retail technology.
The following pages will examine seven nightmarish retail scenarios commonly experienced during the holiday shopping season, as well as how to avoid them by leveraging the right process and technology.
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The three technologies outlined in this paper are defined as follows:
Workforce management solutions: Intelligent labor budgeting, forecasting, and scheduling
solutions that automate labor operations processes with AI and machine learning
Store execution solutions: Retail-centered technology such as real-time task
management, streamlined communication, and other solutions that simplify task
execution processes at stores
Prescriptive analytics: An “actionable analytics” methodology that interprets data and
determines:
• What is happening
• Why it happened
• How much it is costing the business
• What to do about it
• Who should do it
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Staffing issues such as absenteeism can become increasingly
frustrating during the holiday season. For example, during the 2020
holiday season:
• 32% of retailers said employees would call out of shifts with less
than 24-hour notice at least two to three times a week
• 24% of retailers said employees did not show up for a shift and
did not notify their manager at least two to three times a week
• 55% of retailers noted that attendance issues were more
prominent among seasonal workers
This can make it extremely difficult to complete critical in-store
initiatives on time and can be detrimental to the customer
experience.
With intelligent workforce management, you can combat
absenteeism by providing your front-line employees with optimized
and flexible labor schedules well in advance, eliminating any
absenteeism issues that arise from scheduling conflicts. By
automating the scheduling process, you can immediately account for
employee preferences and availability, forecasted customer traffic,
and in-store workload, creating more accurate labor schedules that
better align with your employees’ needs and outside responsibilities.
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Increased Absenteeism1
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Omnichannel demand skyrocketed during the COVID-19 pandemic,
with many using curbside pickup, buy online pick up in store
(BOPIS), and other services to complete their holiday shopping.
Online purchases during the 2020 holiday season grew 32.2% year
over year, totaling over $188 billion.
Influx of Omnichannel Demand
And this translated to an increase in sales: digital sales from retailers
that offered curbside pickup increased an average of 49% from a
year earlier, compared with growth of about 28% for those without
curbside pickup. With demand for curbside pickup and other
omnichannel services at such a high level, and with that demand
staying high, it will be difficult for front-line employees to keep
up with the relatively new, labor-intensive process of picking and
fulfilling orders.
With a real-time task management solution, retailers can simplify
the process of managing curbside pickup and other omnichannel
services. These solutions provide front-line employees with a
prioritized list of tasks on a mobile device, as well as real-time
alerts whenever a curbside pickup order enters the system. Critical
information can be added to each task, such as pickup time,
whether an item needs to be refrigerated prior to fulfillment, or
if an item is heavy and requires multiple employees to carry it to
the fulfillment zone. In doing so, fulfilling curbside pickup orders
and other omnichannel services is much simpler, with far less
pressure being placed on employees to manage the chaos of heavy
omnichannel traffic.
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Retailers who want to maximize their holiday sales know that impulse
buys can make a huge difference. In fact, studies show 5 in 6 Americans
confess to giving in to temptation and making impulse buys. But
there’s also a way to increase sales even further on impulse buys – via
complementary items.
Most retailers are very familiar with the concept of complementary
items -- two or more items that are frequently purchased together
and generate a halo effect by increasing sales. These combinations
may be intuitive (e.g., shampoo and conditioner) or unexpected
(e.g., diapers and beer). With the right process and technology,
you can easily get the insights that reveal these complementary
item combinations.
Prescriptive analytics provides that visibility. The right “pattern
family” (a group of algorithms within the solution that look
for specific data behaviors) can analyze millions of historical
transactions for the exact items you plan to promote during
the holiday shopping season. It then identifies other
products that were often sold with these promoted items
and automatically directs your merchandisers and store
associates to display them close to one another on the
sales floor and online (e.g., in the “Other Items You May
Like” widget). The result? Increased sales and a better
customer experience via simple impulse buys.
Lagging Impulse Buys3
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Seasonal Staffing Challenges4
Understaffed stores were a massive issue during the 2020 holiday
season, exacerbated by the safety and capacity restrictions imposed
by the COVID-19 pandemic:
• 96% of retailers said that their company faced hiring challenges
• 40% of retail managers said stores fully met their hiring goals
• Stores were understaffed 30% of the time
These staffing challenges have a ripple effect, overburdening
employees in understaffed stores, making it difficult for employees
to get critical tasks done on time, and lowering the customer
service and satisfaction levels. This can damage employee morale,
decreasing engagement and retention throughout the holiday
season, not to mention the negative impact on sales.
Intelligent workforce management solutions use AI and machine
learning to generate optimized labor forecasts and schedules,
identifying and correcting for trends and anomalies in forecasting
data to combat the disruption of unforeseen events. These solutions
improve scheduling efficiency, utilizing each employee to the best
of their ability, blunting the impact of understaffing issues – all while
ensuring equitable employee work schedules. With the ability to
schedule at the market level or to schedule an associate for multiple
roles throughout the day, you can also share resources and better
address staffing challenges within regions.
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Few things ruin a holiday shopping experience faster than
“phantom inventory syndrome,” whereby your inventory
management system falsely claims that certain items are
available due to unreported damages, theft, etc. Phantom
inventory skews your records, making out of stocks much more
likely.
By extension, those out of stocks alienate your customers.
According to retail surveys:
• 39% of consumers have walked out of a store without
buying anything due to an out of stock
• The percentage of customers satisfied with in-store product
availability dropped 11% from 2020 to 2021
This is the absolute last thing you need amidst a busy holiday
shopping rush.
Excessive Phantom Inventory
From a customer standpoint, phantom inventory is especially
problematic for BOPIS / curbside pickup customers. If a
customer orders an item after seeing it listed “in stock” online,
but the picker can’t find it on the shelf or in the stockroom, the
item will either be substituted or canceled outright. In either
event, the customer may become frustrated and decide not to
shop at your store (or website) again. This is especially true when
customers are paying a personal shopper or delivery fee for the
service. If their order is only partially completed, they may have
to pay for follow-up orders to get their items.
A good prescriptive analytics solution combats phantom
inventory by flagging popular items whose sales drop despite (1)
the store showing inventory on hand, (2) historically higher sales
for the item and (3) other stores showing normal sales for the
item. It then alerts an associate to investigate and correct any
potential issue. This is a very effective way to:
• Combat phantom inventory at the source
• Provide visibility into execution
• Ensure compliance
• Provide on the job training
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Success during the holiday season depends on stores functioning like
well-oiled machines. Shelves need to stay stocked, signage needs to be
accurate and prominent, and promotions need to be highly visible and
properly marked. If any of these aren’t completed correctly, customers
will likely be confused and frustrated, unable to purchase what they
would like.
With real-time task management, you can ensure that all of the
tasks relating to promotions, stocking shelves, and other critical
projects are intelligently routed to the right employee, with pre-set
prioritization levels ensuring that the right employees are working
on the right tasks at the right time. Store managers have real-
time visibility into task status and completion rates, giving them
the ability to manage by exception, focusing their attention on
specific problem areas in order to ensure the most impactful
tasks are completed on schedule.
By pinpointing which employees are struggling to complete
high-priority tasks, these solutions also make it easier to
coach seasonal employees who may be struggling to
accomplish their tasks on time. Store managers can look
specifically at which tasks an employee may be struggling
with and personalize their approach to ensure that
employees are utilized to the best of their ability.
Poorly Executed Promotions and Empty Shelves 6
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Mass Returns7
Across retail, consumers returned an estimated $428 billion in
merchandise last year. A great way to minimize your slice of that
pie is by staving off mass-return situations, especially those due
to quality issues. The holiday shopping season is prime time for
identifying and intervening before such issues can impact the
customer experience on a grand scale.
Why are the holidays a naturally high-risk time for mass returns? It’s
only human nature that the faster we work, the more mistakes we
make. This is often the case for manufacturers around the holiday
season. Desperate to fulfill their retail customers’ massive orders,
factory workers often find themselves working harder and longer
before the holiday shopping rush, increasing the likelihood of
mistakes that lead to quality issues. Needless to say, few scenarios
are quite as nightmarish as having your stores’ service desks flooded
with angry shoppers returning a defective or damaged product. To
stave off the risk of a mass return, you need to be able to identify
quality issues accurately – and fast.
Prescriptive analytics provides a solution. Many retailers have these
solutions configured to monitor return data across their stores. By
comparing each item’s return rate to historical averages, the solution
can easily recognize when returns are higher than expected and alert
the right associate to take corrective action, perhaps auditing the
given product and/or contacting the vendor for credit. This speeds
up response times significantly, empowering the retailer to resolve
any quality issues before they can drastically affect the customer
experience.
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To learn more about how to ensure success at your retail stores, reach out to us at [email protected].
A well-known fashion brand used prescriptive analytics to avoid a potentially disastrous
quality situation. The solution pinpointed a $300 jacket which had just been released
for the holiday season and was expected to be one of the retailer’s hottest-selling
products. Instead, customers appeared to be returning this product at a slightly
higher-than-average rate under the “Product Damaged” category. The software
solution sent the jacket’s merchandisers an alert to check the item for quality and
seek vendor credit as necessary.
A very slight vendor mistake turned out to be the culprit. In its haste to ship the
jackets on time, the manufacturer had accidentally attached garment labels that
said they were machine washable. In reality, the jackets were dry-clean-only due
to their delicate faux-fur lining. Thus, when customers tried to launder them at
home, the jackets emerged from their dryers badly damaged.
The only reason the jackets were not being returned en masse was because
many customers had bought them to give as gifts, and thus had not yet tried
to wash them. This surely would have been the case post-holiday had the
issue not been caught so quickly. Instead, the prescriptive analytics solution
alerted store managers to attach special dry-clean-only garment tags over
the jackets’ existing ones, saving the style. The manufacturer also issued
the retailer a large credit to cover its losses.
These are just a few of the horror stories we’ve seen in retail. The good
news is that Zebra’s leading software solutions are used by over 300
retailers across the globe to reduce risk of noncompliance, simplify
work at stores, and optimize labor spend.
About Reflexis Systems, Inc.
Reflexis, now part of Zebra Technologies, is the leading
provider of intelligent workforce management, execution
and communication solutions for multi-site organizations
in retail, food service, hospitality, and banking.
The Reflexis ONETM intelligent work platform is used by
our customers across the globe to simplify execution,
improve communication, and optimize labor decisions.
Today, over 275 leaders in retail, food service, hospitality,
and banking are leveraging Reflexis ONE to achieve
measurable improvements in customer engagement &
associate productivity and retention.
Contact Reflexis Systems, Inc.Email: [email protected]
Web: http://reflexisinc.com/
Simplifystore operations.
Improvestore execution.
Optimizelabor spend.
The Reflexis cloud-based Real-Time Store Operations Platform helps retailers: