Omnichannel

Improving retail productivity within the ‘new normal’ environment

Simon Hedaux, founder and CEO of Rethink Productivity, shares his insight on how being productive is not just about cutting costs, it’s about doing more with existing resources

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July 3, 2020 by Simon Hedaux — Co Founder, ReThink Productivity

We are moving to a 'new normal' as businesses start to open again. Most retailers will have experienced sales revenue disruptions, and as we continue with ongoing uncertainty it has never been more important to get your cost base right and improve your productivity.

There are two factors that may create significant changes within your operation that could impact productivity.

The first of these is the extra workload associated with keeping colleagues and customers safe in your store. This may be more frequent cleaning activity or colleagues managing queues and customer flows to maintain social distancing. These are non-negotiable and will increase workload and associated costs. The more you can help encourage customers to adopt the appropriate behaviors, the less your team will have to monitor customer flow and be ready to intervene if needed.

Changes such as having designated in and out doors combined with a one-way route around the store can help. That is easier to do in grocery type environment where the aisle layouts lend themselves to a clear track around the store. It is harder to achieve in a more browsing style layout, such as fashion and beauty stores. If you are making layout changes, consider how they impact on the efficiency of your operation too. Footfall counting technology is being repurposed to help stores manage instore customer numbers and even monitor customer flow around the store to maintain social distancing. These solutions could help reduce colleague hours required to limit total customer numbers.

The second change is how customer behavior changes. Most analysts expect that younger customers may quickly go back to normal and perhaps to expect a surge of pent up retail gratification. Older customers, who remain at greater risk, may be more cautious and spend less time in stores and coffee shops than before.

There are some customers who have taken on stay home messages to the extent they have become fearful of shopping malls and places where they maybe in a crowd. If your customer base and their behavior change, you will need to review how you operate and how best to drive revenue.

Despite many uncertainties, the principles of a slick operation remain the same and these are our top tips of where to find efficiency opportunities.

Match your stock levels to requirements — excess stock creates more work in store. when stock exceeds the shop floor holding, it must be moved and counted multiple times. The ideal situation is for delivered items to go straight to the shop floor, so your team touch them just once as they put them on display. Count how often your team touch an item before it is sold and identify what you can do to eliminate touches.
Streamline counts — evidence is that the more counts are done, the less accurate the theoretical stock file becomes. Can you stop all routine inventory stock counts? For lines that go negative on the stock file, remove any counts and auto zero them overnight. Reserve your count efforts for gaps and nearly gaps so you focus on making sure all lines are available for your customers.
Match team resources to demand — for lots of reasons it is likely that the trading pattern and workload in your stores will change. Too many colleagues on duty reduces productivity and too few risks a sub optimal operation and less time for customers.
Eliminate all non-essential tasks — most businesses have admin and compliance checks that are nice to have or were started years ago and have become an ingrained habit. Review your operation for tasks that take up time and don't drive sales. For example, do you need to balance every till each day? Just do it weekly if the store is within defined error parameters. Do area managers create extra trackers and reports? Can price changes be given to stores as batches twice a week to make it a more efficient process?
Review what you did at the peak of the crisis — most retailers that traded through lockdown periods adopted changes that they would not have considered in more normal times. If you altered how you did things and slimmed down your operation, think carefully before you add activities back into the store repertoire.

Our final recommendation is to remember that being productive is not just about cutting costs, it's about doing more with your existing resources. The best way to improve your productivity is to sell more, and in these times of change there will be opportunities that creative organizations will exploit.

For example, there may be subtle changes to your sales mix driven by customer changes that create opportunities for new products. And new ways of serving customers are opening up, for example, many retailers have rapidly added click & collect, drive through options and enhanced online ranges. It is likely that this challenging period will accelerate the move to online and it doesn't all have to go to Amazon.

Simon Hedaux is founder and CEO of Rethink Productivity.