The retail workforce is about to undergo sweeping changes
Brick-and-mortar retail has done much better during the pandemic than most experts predicted. It was easy to think that the potential for extended shutdowns would mean an accelerated end to physical retailing when there was a larger population of wildlife in the shopping district than people. However, while still facing a lot of uncertainties related to the delta surge and the delay in returning offices to full staffing, the retail store is still there and it’s okay … okay.
In fact, physical retail appears to be rebounding from the pandemic even before the pandemic is officially over – already in 2021, more US retailers plan to open more stores than close them. Coresight Research reports that the rate of store closings slowed for the first time this year, in part due to the slowdown in retail bankruptcies, and that store openings were up nearly 42% from the previous year. same period last year. To be fair, many of these store openings fall into the discount category – low-cost retailers with a large assortment of essentials. But we’re still a long way from the end of the retail store.
And store openings are back on the agenda as a growth strategy. The stores may be smaller and more locally focused, but this opens up the possibility of opening a lot more.
All of this is great news – with just one take. Who will endow them?
It’s hard to find people – and it’s about to get harder
Frontline workers in retail have faced an unprecedented set of challenges related to the pandemic, ranging from having to make personal choices about whether to risk their health to show up for work, to adhering to public health guidelines, handling long-hour and overtime requests while dealing with a stressed-out audience which unfortunately took that stress out of store workers.
It’s no surprise that retail workers have quit en masse. In a market of ten million job openings, nearly one million of them are in retail. And it’s about to get worse – vacation rental needs are looming. Retailers created 702,000 seasonal jobs in 2019, but then added more than 788,000 in 2020, even amid the winter wave of Covid. The National Retail Federation has already raised its overall forecast for retail sales in 2021, so even with the continuing uncertainty of the pandemic and the increase in the delta, it is likely that retailers could beat seasonal hiring figures by 2020 in 2021 – if they can find workers.
And find them, they can’t. In July 2021, a Korn Ferry survey found that 51% of retailers surveyed already said they had moderate difficulties hiring store workers, and 36% reported “significant challenges.” And a Salesforce study predicts that retailers will miss up to 350,000 workers before holiday sales peak.
All stops – and more
Retailers are starting to look very desperate right now when vacation rental needs are great. Some savvy retailers have reached out to summer workers before they return to school to try and lock them up for help while on vacation – offering retention bonuses for as little as four weeks of work in November or December, though employees keep their word. Chipotle and Target apparently accept applications through TikTok, and Denny’s will provide applicants with free breakfast. A McDonald’s in Oregon actively recruits 14-year-olds.
Some retailers are turning to automation. For example, DSW has announced plans for self-service, and Amazon has just stepped up its Whole Foods business to enthusiastically adopt its “Just Walk Out” technology. Not all retailers are good at checkout automation – DSW has a vested interest in ensuring that the shoes in the box match each other and that the shoes in the box belong to this box (with the barcode on the side that determines the price charged).
And some retailers are getting creative with benefits. From Target handing out one-time bonuses at Walmart and Lululemon offering mental health benefits, to Amazon funding tuition fees, to closing restaurants to give employees a break, retailers are trying to balance the means. withholding workers and wage increases, which increase structural costs that are more difficult to roll back once the pandemic is over.
Does it work well? Considering that already this year several retailers, including Walmart, CVS and Walgreens, had to increase their wages up to $ 15 an hour to start, it seems the answer is “not right”. Cash is still king in this tight job market. The Korn Ferry survey of retailers found that 65% of retail executives have already increased their departure rate for store workers this year, or plan to increase it before the end of the year.
And then there’s Best Buy
There are lots of tips on how to hire and retain workers in a tough market. Harvard business review recommends that companies “break market standards” by offering disproportionate starting salaries. However, when the market norm has changed so drastically that companies are using TikTok, recruiting 14 years and $ 15-20 an hour to attract workers, pay starting wages or high bonuses no longer seems to matter. something so extreme.
It appears that Best Buy has taken this current situation to heart. The company has increased the percentage of full-time employees and is investing in things like home theater setup expertise. Rather than treating employees like disposables, the company makes them a central part of keeping stores relevant.
Other recent changes: recruiting employees as delivery drivers, with a focus on building connections with the local community, or building a warehouse that serves as a virtual store, where online shoppers can connect. connect directly with a person who can walk around and show products in a store context of the store.
Holidays and beyond
While hiring for the holidays allows retailers to attract nearly a million seasonal workers, it also gives them a chance to attract a million regular workers – at a time when retailers are already down by nearly one million. ‘a million workers to start. It appears that strategies that help entice seasonal workers to stay after the holidays could help retailers close their job gaps. However, seasonal workers are often of a different breed – not motivated by long-term employment, as much as by the discounts and cash that helps them fund their own vacation expenses.
But like everything else, the pandemic accelerated labor trends that were already in play. Retail stores faced a questionable future before the pandemic, and they needed a strategic overhaul long before the pandemic did. forces online shopping to take a hockey stick at store expense.
Part of the challenge with the stores has been what happened to store the workforce. Retailers have removed a huge amount of labor from stores over the past forty years, and the past twenty years in particular have seen a drastic reduction in full-time jobs (with benefits), reductions in hours of work, the introduction of on-call work, and in general just an erosion of the expertise available to customers in stores. Retailers have painted themselves in a low-wage, low-skill corner. Part of this erosion has been brought about by online competition – store workers simply cannot keep up with all the rich product information available online. But part of it was self-inflicted. Retailers have long struggled with how to deliver better information to store associates, resisting things like mobile devices for store associates as being too expensive or too difficult to implement.
Retailers have found themselves in the pandemic with understaffed, under-trained and underfunded stores. And now that labor is hard to find, retailers are paying more to staff stores and realizing that they have to expect more from these store associates as a result. The value of product knowledge has not been completely eroded by online selling, and store associates still need to play a critical role in up-selling, cross-selling, curation, and expert-level expertise. Of the products they sell.
The bottom line
So what does the future of working in retail look like? The days of low-skilled, low-paying retailing may be gone forever. And this great experience with retail wages and the enormous pressure on wages, perks, and perks is a chance to see if paying more actually pays more for retailers – in an age when stores need to be much more than just one. simple place to acquire and pay for goods.
And technology will be more important than ever, not only for managing employees, but also for empowering them. It is increasingly difficult for a store worker to do their job without technology. Between online orders entering the store for pickup or shipping, or online returns arriving at stores to be processed for consumer credit, or the growing role of the online influencer in the store – while companies like Nordstrom are introducing live streaming in stores to reach online shoppers – the traditional role of the store clerk as someone who rings cash and take out sales is over.