Struggling sales, new competitors, high inflation, stagnant wage growth, rapidly changing purchasing behaviours, the rise of e-commerce, and soaring overheads...this is the long list of challenges facing retailers in today’s market.
It’s tough times out there. In 2018 alone, more than 1,600 stores in the UK have closed their doors creating nearly 30,000 job losses as a result. And there’s been some high profile casualties including Toys R Us, House of Fraser, Poundworld, Maplin, Mothercare and New Look - these are retailers who, in the not to distant past, would’ve seemed untouchable.
However, as the old saying goes, one person’s struggle is another’s gain. With many stores struggling, the retail sector has seen a 15% increase in mergers and acquisitions during 2018 compared to 2017 as larger companies look to build the breadth and depth of their offering.
M&As allow companies to access new markets, products, technology, resources and talent alongside making up for struggling sales and meeting the demands of shareholders expecting to see growth within the company. And, as quoted in The Independent: “Firms are also favouring M&A over flotations, due to weak demand from investors. Selling up to a competitor is seen as a more secure way for existing investors to exit a smaller retailer than an IPO which could be cancelled at any point due to short-term volatility or poor sentiment towards the sector.”
But, as anyone who has ever been involved in one knows, M&As bring with them their own set of problems. From change management and different cultures through to people and communication, there’s a variety of factors which influence how successfully different companies integrate.
And getting it right can often feel like eating a meal with your hands tied behind your back; messy and frustrating. When there’s multiple different payroll providers, HR systems and communications platforms to integrate, it can quickly spiral into a administrative nightmare.
Improving operational efficiency
However, among the challenges, there’s also opportunity to start from a blank canvas and make sweeping changes across the board to drive improvements in efficiency and reduce cost.
Operational efficiency is usually the first and best way place start when cutting costs in a bleeding business. In order to improve it, it's crucial to have an effective workforce management processes in place. To follow up on Gartner's recommendations on new platforms for workforce management, they should be "cloud-native, mobile-native, and real-time data-driven, have in-memory data processing for faster operating speeds, will constantly be updated with new innovative functionality, and will be easy to extend and integrate with other systems."
As Thomas Karlsson, a leading voice in Swedish retail, and one of the judges for the Workforce Management Awards 2018, says: “Competition in retail is super tough and it’s vital to keep track of all costs. Optimising staff cost is incredibly important and it’s here a workforce management system can help companies always have the right staff in the right place at the right time.
“And this applies to both the store and the e-commerce store. With good staffing tools, you get satisfied and happy employees, something that always flows through to customers.”
His thoughts are echoed by Simon Hedaux, CEO of ReThink Productivity, who adds: “As a retailer, once you reach a critical mass, there’s no reason at all not to invest in a workforce management solution and, with everything going mobile, it opens up a whole world of benefits from shift clocking to holiday booking. And this includes having the solution in your warehouse, for your picking and supplying, as well as in your stores which many retailers fail to do.”
So how could better workforce management help?
Well, to start with, there’s only so much you can do with pen, paper, and an Excel spreadsheet.
A good business optimisation tool will automate your schedules based upon your forecasts, allow you to easily and effectively communicate with your staff, and will help power your payroll - exactly like leading global retailer Swarovski have done.
The good news for you is there are plenty of optimisation tools out there that take away this pain and do the hard work for you. In fact, according to industry research (TechNavio), businesses who use a workforce management solution as an optimisation tool save an average of 9 hours per week for each manager.
This will in turn help you create smarter schedules. Smarter scheduling is simple and by saving time through optimising and automating your scheduling you can save money, boost productivity and increase efficiency.
Making sure you have enough staff working at any one time to meet the demands of your customers is essential for ensuring your business is successful and makes a profit.
By scheduling smarter, you’ll not only make sure your scheduled hours are in line with your budgeted hours, but you’ll also be dramatically reducing the amount of time your managers spend on the administrative side of scheduling and therefore reducing costs even further.
And from smarter schedules, you’ll instantly have better forecasting. Great forecasting is one of the key ingredients in your recipe for reducing labour costs. It’s a fine art knowing and identifying what your staffing levels should be based upon historic customer demand - but by building up accurate forecasts you know when your peak times of business will be and how to schedule for them accordingly.
When you balance your planned costs against your results, you create the most profitable resource plan. Better forecasting goes hand in hand with smarter scheduling and gives you the data you need to make sure you always have the right people in the right place at the right time.
Seize the opportunity
Yes, M&As can be stressful times full of challenges but they also present you with the opportunity to lead a workforce revolution, creating a lean and agile business with high efficiency and low cost. If this, and your change management, are both on point, you’re business will easily be successful.
For the full picture on how to more effectively control your labour costs, download our free guide - How to cut labour costs without cutting staff
Quinyx has recently been recognised in Gartner’s 2018 Market Guide for Retail Workforce Management Applications and the 2018 Market Guide for Workforce Management Applications.