As retailers continue to emerge from the pandemic and gear up for the 2022 holiday season, the challenges of retail hiring and retaining employees are becoming increasingly apparent.
First, there’s the struggle to find employees to fill open positions, as the onsite nature of retail jobs has limited the applicant pool.
Then there’s the challenge of keeping current associates happy and fulfilled, all while not overwhelming them due to staffing problems.
Retailers are on the case. According to a Deloitte study, 83% are investing in employee recruitment and retention.
Those issues include reassessing salary but go beyond that to rethinking flexibility and culture, as well as diversity, equity and inclusion (DEI).
The key is to create a culture that’s worthy of employees’ time and energy on its own merit, rather than one in competition with another, such as those exemplified in the gig economy.
At a glance, jobs in the gig economy such as Uber, DoorDash and Instacart are tough to compete against, retail executives acknowledge.
Gig jobs may be considered more attractive than traditional retail positions because they often offer flexible hours for the same (or better) pay.
They successfully attracted workers who were forced to leave their retail jobs when stores closed during pandemic lockdowns, and many don’t want to return.
With a reported 1 million unfilled retail positions available, stores will require some creative solutions to lure back former employees.
During the past two years, many wage earners have reflected on what work means to them individually.
Money is not always tied to feelings of satisfaction and purpose. Many are seeking a better balance between work and their personal lives.
And then there’s the desire to work from home – a request that is impossible to align with the requirements of retailing.
All of that has created the perfect storm of people leaving their current job while seeking work that allows them to live their lives on their own terms.
Executives must therefore think outside the box to attract talent.
The challenge facing leadership is the acknowledgment of the constraints of retail work, while leveraging its advantages.
Those benefits are many times directly influenced, if not created, by employers. Significantly, such advantages must benefit both the employer and the employee.
Developing and promoting clear career paths encourages employee tenure. Employees are not simply seen as filling a shift, but rather, as representatives of their brands.
Offering professional development programs demonstrates to workers that a business wants to invest in them.
They provide the retailer with a trained workforce and the employee with a resume-worthy credential.
Not every company can offer in-house training; some employees may be looking to continue their education more formally, for instance at a college or university.
Tuition assistance options can support those career-advancement goals.
Many workers want reassurance their activities mean something and are valued.
Providing an actionable plan to the next level as well as the education or training needed to get there can promote longevity in the ranks.
Diversity, Equity and Inclusion
Infusing DEI into the fabric of a retail business requires a commitment to investing in staffing.
Deloitte’s research found that 94% of retailers believe employees prefer workplaces that “consider DEI.” That means DEI initiatives should be in place at all levels of a company, from entry-level to the C-suite.
Improving DEI starts with an audit of current recruitment practices to identify gaps in the hiring practices.
Each element of the recruiting process—from job descriptions and candidate outreach to employee satisfaction surveys, should be evaluated.
Just as a retailer would promote its career advancement opportunities, it should also be transparent about its DEI goals and initiatives.
The two strategies can work collaboratively, helping traditionally disadvantaged groups receive training and education that can provide entrée into the elusive C-suite.
In a post-pandemic world, retailers must reevaluate what they offer employees beyond salary and standard benefits.
The past two years have given the workforce an opportunity to contemplate how they want to work, and what they want to receive for that effort.
Retailers now must reevaluate what it will take to get associates back into stores while developing a commitment to their staff as well as to their bottom line.
The last two years have seen dramatic changes in the retailer-vendor relationship. Supply chain shortages caused by the pandemic are still reverberating throughout retail operations.
While the online channel unsurprisingly grew in response to imposed lockdowns, the less-popular hybrid shopping model known as “click and collect,” also gained tremendous momentum.
Retail Pro’s customer ACFC was able to make BOPIS a reality early on in the pandemic thanks to Prism’s data integration and total inventory visibility.
And, although shopping has returned to pre-COVID routines, supply chain issues remain. Here are some ways retailers are handling post-pandemic challenges.
The Product Journey to the Customer
Dropship is more popular. Published statistics show that the global dropshipping market is forecast to reach $196.78 billion in 2022, a substantial increase of 23.7 percent from 2021.
That number is expected to continue to rise, reaching $243.42 billion next year.
The uptick in retailers needing to fulfill online orders during the past two years is a big reason for the dropship surge.
Retail Pro’s ability to streamline inventory visibility across all channels and give retailers a single view makes it easier for them to reduce the margin of error in fulfilling online orders.
Retailers Expanding Retailer-Vendor Relationship
Retailers have expanded their footprint to include marketplaces such as Amazon and Alibaba, as well as social platforms including Tik Tok and Instagram.
Miniso’s UK branch was able to experiment easily with selling on Amazon in the face of tough challenges brought on by COVID with Retail Pro Prism, opening their understanding of future operations possibilities
In fact, TikTok has been experimenting with shoppable ads and shoppable livestreams indicate its readiness to compete for retailers’ attention with Instagram and Facebook.
That has boosted brand awareness not only for the retailer, but also for the supplier. As product demand increases, however, shortages sometimes occur.
Expanding selection through third-party relationships. Some large retailers, notably Lands End, Hudson’s Bay and Anthropologie have begun their own marketplaces.
Those retailers feature channels on their websites that allow select third-party brands to sell products directly to their customers. It increases selection while letting the retailer avoid increasing the number of vendor relationships they must manage.
Automation of Operations
Increasing workflow automation. Reducing or eliminating the manual creation of reports regarding orders, stock levels, and sales trends, and automating that process can accelerate the receipt of information regarding potential stock shortages.
That is particularly helpful when earmarking stock for in-store purchases; for ecommerce order fulfillment and for pickup by click and collect customers.
Automation reduces errors and makes data collection more efficient. Retailer Saleem Fabrics was able to automate their inventory to lessen challenges brought on during COVID with the help of their Retail Pro Business Partners at System Plus and Retail Pro’s software plugin capabilities.
The best supplier-buyer relationships require collaboration. Retailers and their suppliers must be committed to the long-term pursuit of value.
Working with Retail Pro and our partners means a retailer has engaged support and help to take any steps necessary for the sorts of modernizing changes in operations mentioned above.
Together, retailers and their partners are employing innovative solutions to offer joint opportunities to create and retain significant value.
After two years of isolation, customers are ready to visit retailers, and stores are more than ready to greet them as they look to expand operations.
Anticipating pent-up demand, retailers are looking at not just beefing up their square footage but also global expansion to meet customers’ demands for exceptional selection and outstanding experience.
The recent past has been tough on retailers: COVID magnified existing weaknesses, accelerated emerging trends of increased online shopping, and forced organizations to adopt new technology faster than they had anticipated.
Approximately 40 million workers were furloughed or laid off as demand dipped and factories and offices were closed to prevent the spread of the virus, according to Deloitte.
Additionally, people stopped traveling and leaving their homes to shop: Business Insider reported an 82.6% year-over-year foot traffic plunge for the week ending April 18, 2020. E-commerce took hold as brick and mortars complied with government mandates to close.
Retailers that had entertained physical expansion plans in 2020 quickly course corrected and invested in online sales platforms to try to make up lost revenue. That strategy – which included click and collect and curbside pickup — helped many physical locations remain in business.
As the pandemic waned and retailers reopened, they started streamlining operations to ensure that their physical stores were in sync with their online systems, which had become more robust during the last 24 months.
Retail Pro Prism’s omnichannel retail management platform gives retailers the tools to monitor their inventory across channels, keeping in-store and online records in sync. The operations were often merged into a hybrid store/warehouse, in which online orders could be fulfilled by the stores’ brick and mortar locations.
Strategies to expand revisited
With those new logistics in place, retailers are once again considering and moving ahead with physical expansion. But, for the largest, most well-known names, creating more big stores isn’t in the game plan.
Instead, smaller, more boutique-type stores that focus on the customer experience is the winning strategy.
Take Nordstrom’s, which even prior to the pandemic offered curbside pickup and has continued to strengthen its integration between online and offline channels.
Nearly five years ago, Nordstrom Local launched. The stores are roughly 3,000 square feet and do not carry dedicated inventory, but instead are focused on service: Amenities include complimentary personal stylists, eCommerce order pickup, returns, alterations, gift wrapping and complimentary refreshments.
Betting that less space could pay off more was a good gamble: On average, a Nordstrom Local customer spends 2.5 times the amount of a regular Nordstrom customer.
The retailer sees the locals as a way to complement their existing larger stores, and cater to customers more conveniently.
Post COVID, many shoppers are looking for convenience, particularly when at brick and mortars.
The fundamental reasons for shopping in person haven’t changed: They enjoy social interaction and they want to interact with products before purchasing.
However, shoppers may now be a bit more exacting in what they expect from retailers’ service.
Businesses looking to expand their physical footprint must be certain that their existing software can handle the new load.
POS software, in particular, must be scalable in order for the business to remain efficient.
Retail Pro Prism is a scalable, comprehensive software package that can be cloud-based and offers remote support — ideal for an expanding company.
For example, Miniso UK currently has seven stores and has plans to grow its business with Retail Pro Prism to 50 stores in five years. “As you grow, you need clear visibility on all parts of the business and we want to ensure we’re not letting down one side of the business at the expense of the other,” said Miniso UK’s Chief Operating Officer, Saad Usman. “To be successful, we have to develop the online and offline experience simultaneously, which we’re trying to do.”
Growth Requires Local Support
Once software requirements have been established, retailers should consider their support options. Having local IT partners can help ease concerns and create an atmosphere of camaraderie.
Retail Pro has a Global network of local IT support partners in 130 countries, helping their clients with implementations, integration of retail solutions including loyalty, ERP, ecommerce etc.
Local partners also know the region better than anyone, so they can assist with localization of the software for language and branding, and are familiar with legal requirements, such as fiscalization (fiscal law aimed at preventing retailer fraud) as well as tax reporting.
Retail Pro is compliant with regional fiscal and tax requirements such as VAT used in many regions globally, India’s GST, Canada’s GST/HST and Brazil’s ICMS, and various tax zones.
In addition, any software that a growing retailer selects should be “expansion-friendly.”
Retail Pro’s robust API provides centralized flexibility that adapts to local regulation variations, allowing retailers to customize their retail POS systems to specific regional requirements.
For more than 30 years, Retail Pro has provided a base platform and API that supports regional requirements, which are specific to a retail management system and point of sale.
From the UX –where local language support is key– to the more complex needs of taxation and reporting requirements, localization has and continues to be part of Retail Pro’s DNA.
Globally, language can also be a business barrier. Because all languages have a vernacular, idioms and regional “quirks,” Retail Pro has a fully translatable user interface, so translations can be tailored toward local dialects for a given region, specific business or vertical type.
Finally, partnering with the right IT solution provider is critical for retailers’ success domestically and abroad – and the right fit can help both companies grow, especially if they operate with similar values.
Authorized partners are not only trusted technology advisors, but they are also serving as IT project managers for store launches in different regions of the same country as well as coordinating store launches in new countries.
Establishing mutually-beneficial goals motivates all parties. Post-COVID, analysts expect the global retail market to reach $39,933.3 billion in 2030, up from nearly $20,331.1 billion in 2020. Retail implementation of regionally-savvy software and partnerships with local solution providers will be crucial for success.
Sustainability means serious business to a new generation of customers.
Business sustainability is far more than using recycled plastic in shopping bags or motion-sensing lighting.
It’s not a feel-good buzzword. Rather, it’s a way of doing business that considers the effect companies have on the environment or society.
Sustainability – from Millennials & Gen Z to Mainstream
For Millennials and Gen Z customers, sustainability includes reusability.
Thrifting or “resale marketing,” is popular with this group, and the secondhand market, including clothing retailers such as Poshmark and ThredUp, is thriving.
The similar concept of “circular fashion” considers the entire lifecycle of a garment, from how it’s made to ensuring its durability so it can ultimately be passed to several owners.
Established brands are joining the party; for example, Patagonia’s “Worn Wear” program offers credits toward new items when customers trade-in gear.
With Millennials representing $600 billion in spending power and Gen Z at $140 billion, their preference to shop sustainably can’t be ignored.
Increased appetite for sustainability
Not every product can be reused, however, so looking at responsible, “green” ways of manufacturing continues to be important.
What has changed, however, is that customers are more willing to pay for sustainable products. For example, last July, a survey from First Insight and Wharton’s Baker Retailing Center of more than 1,000 U.S. consumers found 68 percent of them willing to pay more for sustainable products, up from 58 percent from a survey taken in 2019.
That’s a compelling argument for retailers to create, source, and sell more sustainable goods.
Sustainability and cost incentives
Sustainability aligns with business goals as well – and though many small and midsize retails are leading the charge, it’s not solely the purview of smaller companies.
A great example is “Amazon Day” when the behemoth retailer packages into one weekly delivery, chosen by the customer. That’s a huge savings in gas costs for Amazon, while it reduces environmental pollution.
In addition, Amazon has committed to produce 100,000 electric vehicle delivery vans for Amazon through 2024.
Brick and mortar retailers that provided enhanced delivery and customer pickup services might consider reducing the resulting carbon footprint by bundling packages for customers, which will consolidate the number of delivery/pick up trips.
Employees and sustainability goals
Finally, companies that embrace sustainability as a key purpose may be better positioned that their competitors to attract motivated, skilled workers that drive financial success.
Everyone likes to rally around a common goal, and employees with shared purpose are likely to be more satisfied at work – and happy employees are great ambassadors for your business.
The customer journey may always start with shopping, but it doesn’t necessarily end on a happily-ever-after note. Sometimes, the item just doesn’t meet expectations and the customer makes a return.
The return rate for the retail industry in the U.S. and Canada averages 8% of total sales, according to retail analytics firm The Retail Equation.
Returns are a “reverse logistics problem,” but also a fact of life for retailers, which cost time and money.
Because of that, it seems counter-intuitive to invest in improving the returns process — but it’s absolutely imperative. Having a good returns experience can help retain customers, and gaining a reputation for it can actually attract new shoppers.
It’s estimated that between 25 and 50% of online purchases are currently returned, so making the process simple and convenient is vital.
Retail flexibility for returns is a must in the omnichannel: after all, the customer can buy in any number of channels, so returns should have similar options as well.
In having omnichannel capabilities for customers to make returns, retailers can use the return as an opportunity to immediately offset any costs of returns. The retailer can use clienteling through whatever channel the return process is started; suggesting products in line with the general trends of their purchase history.
With a wealth of plugins available, Retailers can customize their omnichannel operations to offer return processes that are convenient for customers and work seamlessly with their retail and inventory management.
Order Management and the channels for returns
Once a return happens, being able to make that addition to inventory available soon after receipt increases the opportunity of achieving a full-price sale.
An order management system can provide instant visibility of returning goods, regardless of how they are being returned — to a store, through a courier service or directly to a warehouse.
In addition, having visibility of these items available allows the order management system to develop fulfillment decisions on how and where items should be sold to maximize profits.
A survey from Inmar found that most shoppers want to return in-store, largely due to the hassle of packing up a return.
Brick and mortars can benefit by enabling in-store returns of online purchases, as that drives store traffic and provides an opportunity to immediately recapture shoppers’ initial expenditures. Approximately 30% of Inmar survey participants said they “usually” or “always” stay in the store and shop with their refund money.
AppCard for Retail Pro provides a retailer with great tools for building personas for retailers various clients and personalize recommendations for them.
The future of returns and making them easy
Some e-commerce retailers such as Amazon make the return experience easy by requiring little to no packaging by the customer, allowing returns in different store locations, including return shipping labels in deliveries, as well as a QR code that can be used at a predetermined courier, which also increases efficiency for the retailer
Returns are an important element of a new online sales cycle: Increasingly, shoppers are employing a “buy and try” approach and they expect sellers to cooperate.
Research has found that much of the returns growth is due to shoppers purchasing more than one of the same or similar products with the intention of keeping one and returning the others.
Retailers must recognize the changing role of returns, understand that they will likely increase rather than decrease due to this new customer mindset, and optimize their processes to adapt and maximize customer satisfaction.
Customers love retailers with omnichannel strategies. Shopping is on their terms: They can choose the time, the location and – if they change their minds – the way to make the return.
No longer are the channels online stores and brick and mortars; today, a brand can also sell products through pop up storefronts as well as Instagram and Snap Chat.
It’s all about connecting with customers at their convenience.
When retailers give customers the flexibility to choose the way they shop, they are also able to connect and provide personalized promotions and timely recommendations. OptCulture for Retail Pro opens up the ability to create personalized promotions and loyalty programs by unifying customer data across channels.
With so many points of engagement between customers and brands, scaling operations is challenging.
Today’s shoppers don’t consider brick and mortar and online stores separate shopping destinations. Instead, they expect unified experiences across every touch point. Retail Pro Prism makes it possible to offer this convenient, omnichannel buying experience.
Order Management and flexible fulfilment
Order Management is critical for a holistic commerce strategy. It connects omnichannel demand to omnichannel supply.
Determining the best fulfillment options means finding solutions that shorten the distance to the customer, increase delivery speed, and reduce costs.
The omnichannel model emphasizes shipping from decentralized inventory sources, such as ship-from-store, buy online pick-up in-store, ship from a partner, or drop-ship from a manufacturer.
Making the right decision improves customer service, because delivery is quick, accurate and cost-effective. Ensuring the ‘last mile’ is optimized by collecting the data in a centralized visual analytics tool saves you money, time, and frustrated customers.
In a warehouse fulfillment model, orders are picked using a variety of methods, including discrete, zone, or wave picking or any combination.
Filling orders from a store limits the type of picking that can be done and retailers often use discrete picking and fill one order at a time. The benefit to in-store picking, however, is the proximity to the customer, who may opt for curbside pickup, eliminating shipping charges.
Curbside pickup has its advantages for shoppers in a rush but for retailers, enticing customers inside to make additional purchases has bottom-line benefits.
However, Pick-up-in-store customer personas are different from an online-only or in-store-only customer personas: They want immediate gratification — they can’t or won’t wait for shipping.
This is a demanding group that generally has little tolerance for friction during pickup. Therefore, clear, precise messaging about when the order will be ready and instructions for pickup are imperative. The pickup process can be made even more streamlined and convenient with Retail Pro Prism mobile POS.
And the pickup purchase process should be quick and easy for customers and employees. Customers’ perceived value of in-store pickup will evaporate if they can find the item on the floor faster.
Inventory management strategies and shipping
Shipping from the store can get customers their orders delivered more quickly. But other times, the warehouse is closer to the customer.
Having the option to ship from one location or the other is critical for flexibility and to keep customers satisfied.
In-store cycle counting can help by keeping inventory counts up to date and confirmed, so at fulfillment time products are where they are expected to be.
When they aren’t, sometimes items have simply been misplaced: an RFID system can help locate them very quickly. With RIOT RFID for Retail Pro, retailers can locate items out of the line of sight and complete inventory counts in a matter of minutes at an affordable price.
Customers have high expectations of how their shopping experiences should unfold, and retailers have a full plate managing and fulfilling orders while recognizing the unique characteristics of every consumer.
What delights one customer may not work for another. Retailers must be flexible and willing to implement customer feedback to create an efficient, intuitive customer experience that, ultimately, is profitable.
Retail Pro Prism POS gives you the flexibility and customization needed to connect your physical and digital store experience: offer customers fulfillment options, empower associates to order specific products from another store, discover shopper insights, and more.
Retail Pro International (RPI) is a global leader in retail management software that is recognized world-wide for rich functionality, multi-national capabilities, and unparalleled flexibility. For over 35 years, RPI has innovated retail software solutions to help retailers optimize business operations and have more time to focus on what really matters - cultivating customer engagement and capitalizing on retail's trends. Retail Pro is the chosen software platform for omni-channel strategy by retailers in 130+ countries.