For European retailers, 2018 has been tough. However, retailers are resilient, and hopes are high that a more positive outlook is on the horizon. Falling European unemployment, twinned with increased net incomes for most countries are good news for consumers, which in turn should mean more disposable income and increased revenue for retailers. Now, more than ever, retailers need to strike the balance between their physical and online operations to deliver a consistent customer experience across all touch points.
From speaking to some of the world’s leading retailers, I know the scale of the challenges facing these organisations. Tighter margins, increased competition, and a consumer base with increasingly different expectations of how they want to buy, all create new challenges for the retail industry. It’s probably no surprise to anyone to hear that talent is one of the biggest issues in retail right now.
Hiring, developing, and retaining engaged employees to deliver outstanding customer service is tough at the best of times. European retailers now face the added task of having to adapt the way they manage their workforce to meet quickly changing market conditions, yet many organisations fail to do so effectively due to costly and inefficient technology systems that are holding them back.
It’s no secret that the growth of online retail has forced many retailers to consolidate their store networks in recent years. However, according to GfK research, per-capita expenditure levels among omni-channel purchasers reflect the importance of a multi-channel retail approach. Retailers are buoyed by the fact that omni-channel shoppers spend at levels that are more than twice that of pure online shoppers and consumers who shop exclusively at stationary outlets.
Retailers need a technology architecture that can adapt to changes in their organisational structure, policies, locations, business units, and workforce. Many forward-thinking businesses are turning to the cloud to provide full visibility into their talent across the entire retail organisation—from corporate headquarters to store locations.
Front-line employees and managers have the most impact on customer satisfaction, so it’s essential that retailers hire the right people, onboard efficiently, address problems quickly, and nurture top performers. This means having the ability to manage the full hire-to-retire life cycle of an organisation’s workforce and in a single system.
A growing number of people, especially the young, have jobs with ultra-flexible working hours, no regular pay, and fewer employment protections. According to a European Union consultation whitepaper, they accounted for more than one-third of the total workforce in the 28-country European bloc in 2015 and research suggests that share is growing.
With this in mind, having the ability to recruit, onboard, develop, and retain the best talent—from part-time and hourly workers to full-time employees and senior management is becoming increasingly important. Millennials expect the same technology experience in the workplace as they have when they engage with social media and apps. This should be reflected in the end-to-end onboarding experience. Retailers should be able to quickly identify the skills and strengths of its workforce, and reallocate resources as demand requires based on this data.
“With the talent insight dashboards, not only can we now see what positions we have successors for, but we can look at whether [successors] are ready. It might be that the nearest successor is two or three years away. Managers have more accountability now because the data is visible.” —Helen Gowler, EMEA regional lead, Avon Products, Inc.
There’s a better way to reach employees than breakroom signage, emails to personal accounts, and manager word-of-mouth. Yet, retailers often rely on these inefficient methods to push procedural, operational, and social communications to specific individuals or groups. Forward-thinking retailers understand the importance of driving positive culture and employee experiences on devices that are natural to the workforce of today, such as mobile devices.
The European Commission wants more social protection and rights for casual workers, such as those in the “gig economy,” and others with non-standard contracts to try to tackle growing social inequality. This is just one example of the impact of the ongoing legislative reform that means retailers must be smarter with the way they handle data.
This challenge is particularly evident in the physical separation of the corporate office and individual store locations—and the different roles assigned to each, which increases the chance for errors and inconsistencies in data and processes. The risk is compounded by complex compliance requirements and the high turnover of hourly workers. If a retailer does not have a single system-of-record for information and processes related to compensation, overtime, absence, benefits, training, background checks, how easy can it be to collate such information and audit it as required?
Having the ability to automate hiring, onboarding, payroll, performance assessment, and termination across the entire organisation—including differences for unionised and workers’ council environments, eliminates inconsistencies at the store level.
When I speak with retailers, such as John Lewis, Vent-Privee, Avon, and Club Med, they all support a system whereby business processes are configurable and fully automated to follow an unbreakable approval chain or orchestrated set of activities or steps. They want to be instantly notified of actions at risk of falling outside the process and to assign security permissions to employees based on their role.
The use of self-service tools and digitalization of processes can drive workforce engagement and productivity.
For those retailers who are getting this right, the benefits are truly tangible. At Workday, we have seen examples of retailers making annual savings of over $1 million from the automation of onboarding processes. I have personally spoken to retail organisations who have been able to increase self-service by over 20 percent, which has allowed them to increase the time managers spend on the sales floor. By bringing people data into a single system, one retailer has been able to reduce overtime costs by over 12 percent, simply by getting greater insight across shift patterns, regions and individual sites.
Below are three areas that retailers should be thinking about when they consider the future of their business models:
How can retailers drive digital engagement? Data is important in order to better understand customers, integrate digital services, and drive personalized engagement for the increased revenue and loyalty that comes from creating targeted and personalized experiences across all channels. This also applies to a retailer’s internal customer—the employee. The use of self-service tools and digitalization of processes, such as onboarding, learning, holiday requests, payroll management, and time management can drive workforce engagement and productivity.
How do we obtain data-driven insights? Digital innovators will focus data mining and analysis on product performance, pricing optimization, and customer experience optimization. Data leaders in the retail space are putting more emphasis on customer insights and social analytics. Having a holistic view of who customers are will be a major differentiator for brands. Bridging the gap between personal and social data to a customer profile will be the key to meaningful, personalized experiences that will inspire loyalty and frequency. Retailers should also apply this to people management, using data insights to understand patterns in productivity, employee retention, and talent management, rather than a reliance on pure guesswork.
How do we win the battle for retail talent? The workforce is multi-generational. Retailers need to attract, retain, and leverage talent rapidly, without spending time away from the sales floor managing administrative processes; the workforce is seasonal and has high employee turnover. Consider that candidates of the future will likely require a complex mixture of soft, interpersonal as well as detail-oriented digital skills. Tackling recruitment requires new thinking and business processes designed to attract candidates best able to create consumer moments that truly matter.