Retail Industry Outlook: 3 Ways Retailers Are Accelerating Their Operations

In this article, we discuss:

• Improving the Frontline Worker Experience
• Ultra-Personalized Everything to Build Customer Loyalty
• Streamlining Systems to Get Better Data

Retailers have faced a roller coaster of conditions in recent years—high inflation paired with rising consumer wages, recession fears followed by recession relief, and accelerating digital transformation amidst a return to more brick-and-mortar shopping. As a result, many leaders look to the future with cautious optimism.

A recent Workday-sponsored IDC survey of global retail leaders reflects that sentiment—35% of leaders feel the industry is healthy, while also noting their concern that many lack the ability to pivot successfully if conditions were to change.

To future-proof their enterprises, retailers need to focus on a few key agility drivers such as workforce optimization, modernizing systems to improve access to real-time data, and finding ways to deliver hyper-personalized experiences to consumers. Here are three imperatives for retail leaders to follow moving forward. 

1. Improving the Frontline Worker Experience

For many retailers, labor shortages began easing late last year, mostly due to more people returning to the workforce following the pandemic and the unfortunate shuttering of brick-and-mortar locations. But retailers’ frontline worker problems aren’t entirely over—not when retail employees report feeling more disconnected from their work, their leadership, and their colleagues than ever before. 

A recent Accenture survey found that only 1 in 8 retail employees feel “omni-connected” at work—meaning that they feel seen and heard, and believe they have opportunities for advancement. Such low levels of satisfaction are a sign to retail leaders that employee retention remains a problem.

To engage and retain employees, retailers need to shift from managing their workforce to optimizing it. Traditional workforce management methods are transactional—focused on tracking and counting, leaving workers feeling as if they’re just another cog in the wheel. Workforce optimization relies on rich, interconnected data systems to foster employee insights, visibility, and agility, and leverages AI and machine learning (ML) to help employees spend less time pushing paper and more time doing meaningful work.

“Retail is a people business—ultimately, they are the most important asset that any business has,” said Daniel Bobroff, co-founder, Intawear, at Workday Rising EMEA last year. “Retail needs to do far more to provide employees with technology to reduce the often monotonous, tedious, and error-prone jobs that take up so much of their time instead of what they should be doing: helping the customer.”

Automation helps retailers more easily address their workers’ top wants: better visibility, pay, training, and flexibility. Using AI-powered tools for employee-first scheduling, for one, gives workers the flexibility they crave. And it’s essential considering that lack of flexibility is a top reason people quit retail jobs, McKinsey research finds. 

At global sports brand retailer Puma—an organization that regularly attracts young, digital-native workers—replacing its legacy HRIS system paved the way for the company to provide more mobile-friendly, self-service features. Employees can now request time off, manage their schedules, and apply for in-house job opportunities from their mobile devices. And managers can quickly access key employee statistics such as turnover and absenteeism to spot trends before they become problems.

Bottom line? “It makes life easier for employees and managers,” says Dietmar Knoess, Puma’s global director of HR and central services.

2. Ultra-Personalized Everything to Build Customer Loyalty

Consumer expectations—especially among younger generations—are changing, and they’re shaking up the retail marketplace, says Derrick Jenkins, principal, Deloitte. 

“The consumer, generationally, is becoming more and more diverse. With a diversifying consumer comes a diversifying set of needs and wants from the consumer that the industry then has to respond to,” Jenkins says. 

One of the biggest factors is the expectation for highly personalized shopping experiences. Personalization certainly isn’t new to retail—the sector has done it just about as well as any other industry for years—but those offerings will need to be significantly expanded and consistent across all channels. 

Walmart, for one, is planning to use AI to power its new InHome Replenishment service. A “personalized replenishment algorithm” will track customer orders and learn behaviors around what items are purchased, with what frequency, and at what quantity to automatically fill customers’ online shopping cart with personalized picks at the correct time.

“Consumers now expect personalized shopping experiences tailored to their preferences,” KPMG reports. Retailers who use data analytics as an important window into customer behavior can provide personalized product recommendations, customized marketing campaigns, and better customer service to strengthen relationships and loyalty, the report finds.

3. Streamlining Systems to Get Better Data

Retailers don’t lack data—they lack confidence in their data, IDC research shows. Why? Largely because of too many disconnected point solutions, siloed data, and integration complexity, retailers say.

“Without a single source of reliable, real-time data, you’re not synchronized as an enterprise,” says Keith Pickens, managing director, retail, at Workday. “You can’t manage the end-to-end risk chain. You can’t see those constraints that will affect finances, inventory, or talent.”

At a time when retailers are balancing heightened consumer expectations and a tight labor market, increasingly complicated tech stacks make it tough to react nimbly to market shifts. This is especially problematic for large, multinational retailers that share data across stores and continents—and with both internal and external stakeholders.

Mondelēz International, a $29 billion company with brands including Oreos, Ritz, and Cadbury in its portfolio, wanted to make company data more accessible to internal and external stakeholders. With API-based integrations enabled by Workday, Mondelēz was able to streamline what had been a time-intensive batch file transfer system.  

“With traditional file transfers, we do the heavy lifting by creating, transforming, and sending the data to whomever is going to consume it,” explains Aaron Colley, Workday technology lead and HR solution architect, Mondelēz International. “With API integrations, we open the doors to our Workday data—in a totally secure, privileged way—and give users a key to specific data elements. They take the data, then change and load it however they want. Having one source of truth is powerful to the business because it ensures the integrity and consistency of all reporting instead of piecing reports together from different data sources.”

To meet the pressures and opportunities of the near future, successful retailers will invest in generative AI, embrace the cloud, and streamline platforms where possible. Those that have already accomplished this have seen the biggest payoffs from digital transformation in three key areas: customer engagement, employee productivity, and cost containment, according to a KPMG survey.

“Retailers need a direct line of sight into the parts of the business that are driving revenue, supporting and empowering their workforce, and providing superior consumer experiences,” Pickens says.

To learn more about how Workday helps retail drive digital transformation, visit our website.