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Omnichannel Experience & Intelligent – The Future of Retail
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TCS Consulting Services to Achieve Success in the Business 4.0 Era
Highlights
- A changing retail landscape and an ambitious workforce are turning the spotlight on modern workforce management solutions that enhance associate experience and operational efficiency.
- Intelligent automation can drive the next frontier of workforce management in the retail industry.
- A successful workforce management strategy requires a holistic approach; retailers must invest in technology and employee training, and ensure compliance with laws and regulations.
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The need for intelligent automation
The retail landscape has evolved and so has the retail workforce.
Retailers are facing challenges while trying to keep up with the demands of modern retailing using traditional workforce management tools. Workforce planning is no longer simple math, matching tasks with associate availability randomly. That is because apart from the complexity of managing day-to-day operations across thousands of stores, seasonal demand spikes, and the holiday season, retailers have fresh challenges to contend with. Customers are expecting better service levels, labor laws are becoming more stringent, and there is higher attrition, resulting in understaffing. Further, a new cohort of hourly associates is demanding gig-like flexibility. These factors are forcing retailers to reimagine traditional workforce planning constructs.
5 WAYS AI IS A GAME CHANGER
Modern AI-powered solutions and intelligent automation can act as game changers for optimizing core workforce management processes in the retail industry.
They can be adopted in areas such as workforce forecasting, capacity planning, shift rostering, and task scheduling. Working at the intersection of labor efficiency, service levels, and associate experience, intelligent automation can improve productivity, lower operational costs, and drive employee engagement and loyalty.
We discuss five ways how AI and intelligent automation can enhance workforce management for retailers:
Plan workforce based on predicted bottom-up demand
Traditional workforce planning takes a top-down approach, which involves extrapolating workforce requirements based on historical data and growth in strategic targets. Store managers create rosters based on activities scheduled for each day of the week, irrespective of whether the task is required. For example, irrespective of whether shelves need refilling, personnel are rostered for gap scan and replenishment.
With the growing adoption of intelligent automation and AI, retailers can forecast demand across store and warehouse activities for a given day or timeslot and translate the forecasted demand into specific workloads to plan capacity (roles and skills) across departments and functions.
With access to granular data such as average transaction time per employee and average time taken to restock shelves, they can optimize labor by taking a bottom-up approach to workforce planning.
For example, AI-powered queue management systems that use queuing models can accurately estimate associate capacity, average handling time, and sales or service call volumes (long-term and intraday). The estimates are based not just on historical data but also factors such as transaction and basket size patterns by the hour or day for each location, variables such as weather and promotions, and business rules and constraints such as maximum customer waiting time and average service time. By analyzing the relationship between queue lengths and service rates, the tools can determine the optimal number of checkout counters or queue lines to open at a given time based on the forecasted demand. This helps optimize the queuing process, reducing customer wait time and improving workforce productivity.
Leading retailers are shifting away from roster-based assignment of tasks to dynamic allocation of event-driven tasks. Let us say a shelf needs to be replenished, rather than assigning a task to an associate, the task can now be assigned to the replenishment department. Associates are encouraged to subscribe to departments and volunteer for tasks and are rewarded based on the criticality of the task and their performance. Such factors need to be considered while planning for the workforce.
Optimize employee utilization with dynamic task allocation
Creating fair and efficient shift schedules that satisfy business needs and factor employee preferences and skill sets is challenging. The complexity is compounded by the need to balance quality and operational efficiency while accommodating full-time, part-time, and seasonal workforces. Additionally, retailers also need to consider department-wise standard operating procedures (SOPs) and adhering to labor laws and scheduling rules, such as minimum and maximum number of shifts, hours, or consecutive days. With AI and intelligent automation, a multitude of constraints can be factored in real time to optimize employee schedules and ensure that the right employees are assigned to the right tasks at the right times. This will help prevent overworking or understaffing and ensure a balanced workload.
In a typical store, 60% of activities performed by associates are operational in nature, for example, receiving, filling, waste management, and sorting, and about 30-40% involve customer interactions. Leading retailers are automating operational activities to free up time for revenue-generating customer interactions such as upselling, cross selling, and personalization. In traditional shift rostering, irrespective of whether a shelf needs to be replenished, associates perform assigned tasks such as gap scans. Today, technology solutions such as RFIDs, computer vision, robotic gap scans, planogram compliance, data-led targeted shelf replenishment, self-checkouts, and electronic shelf labels (ESLs) can take over a myriad of tasks that were previously performed by associates. Data-driven solutions can monitor on-shelf availability and generate batch pick lists to avoid multiple trips between the backstage and sales floor. Similarly, with data insights, retailers can create store-level planograms that specify the shelf capacity to be allocated for each product based on local buying habits of customers. Key performance indicators (KPIs) such as fill first time can drive labor efficiencies by helping avoid back and forth trips between backrooms and shelves.
Managers can generate full-day shifts, multiple half-day shifts, and cross-departmental shifts to maximize associate utilization. They can create optimized associate-level schedules based on service requests, confirmed bookings, associate availability, role, and assigned shift type and index. They can also assign workloads to specific task groups such as frontline or backroom tasks; task buckets such as filling, receiving, cashier, planogram, floor displays, price changes, auditing, and customer service; and process areas such as deli, bakery, apparel, or frozen section.
Focus on what matters with exception-based management
Equipped with full visibility into rosters, managers can easily track tasks and manage by exceptions. AI can help detect and prioritize exceptions such as a significant drop in workforce productivity or an unexpected decrease in sales during a specific period and can automatically generate alerts to managers. The alerts provide real-time notifications about potential issues that require attention and how to address them. They can help managers take timely interventions. Managers can create, assign, reassign, and reprioritize tasks and assign associates to dynamically generated event-based tasks, as well as track progress. With mobile apps and digital platforms, managers can efficiently communicate with employees.
Improve employee morale with flexible schedules and on-the-job support
Maintaining employee satisfaction and morale in the face of variable schedules and demanding workloads is challenging. AI-powered workforce management platforms can automatically match business needs with employees’ skills and schedule preferences. They can facilitate shift swaps or time-off requests by managing the approval process automatically. Equipping store staff with a mobile solution to complete common tasks or access work-related information (submitting time-off requests or swapping a shift) empowers them in the decision-making process, fosters a sense of ownership, and improves morale.
During the holiday season, workloads are strenuous, with each associate handling anywhere up to five tasks at a time—running registers, cleaning up for maintenance, working with freight, and stocking shelves. Hundreds of thousands of seasonal workers are hired for store, customer service, and supply chain activities. Getting them up to speed in the busiest time of the year is challenging. Managers can leverage digital platforms for onboarding and training and deploy digital assistants for on-the-job support.
Improve productivity and reward associates by benchmarking performance
With the availability of granular data on associate performance, it is easier to measure workforce productivity against benchmarks and make continuous improvements. Employees can track their performance against goals and targets, fostering healthy competition and continuous improvement. For example, if the standard time to fill a shelf is 30 minutes and an associate completes the task in less time, they are rewarded. But if many associates qualify for rewards, it could indicate that the metric of 30 minutes needs to be revised. Employee productivity data can be fed into workforce productivity systems to readjust the effort hours assigned for each task.
Based on the insights generated by the workload reports, managers can optimize resource planning, track employee performance, and improve skill and task mapping, thereby enhancing employee engagement and operational efficiency.
KEY ENABLERS FOR A SUCCESSFUL STRATEGY
Creating a superior associate and customer experience will require retailers to adopt a holistic approach.
An effective workforce management strategy is underpinned by three crucial enablers—technology, training and recognition, and compliance.
- Adopt technology: Retailers should manage everything from scheduling and staffing to employee engagement in one unified environment. They must invest in AI-powered workforce management tools to manage tasks such as queue management, demand-driven shift rostering, smart task management, and targeted shelf replenishment. These tools can help retailers streamline processes and be better equipped to handle daily rigors as well as surges during the holiday season. Implementing mobile communication and collaboration tools can facilitate real-time updates and coordination. Additionally, retailers must adopt an event-driven task management approach through a store control tower to get real-time visibility of all store events and tasks. This will enable them to intelligently prioritize critical tasks that impact customer experience or store revenue.
- Provide comprehensive employee training and recognition: Retailers must foster a culture of continuous learning and development through tailored training programs on standard operating procedure (SOP) compliance, building efficiencies for replenishing stocks, regulatory manuals, and safety protocols. They must reskill and upskill employees to work alongside automated systems. Further, they should use tools that trigger automated rewards and recognition when employees achieve specific milestones or demonstrate exceptional performance by consistently performing tasks better than the planned standard times for the corresponding tasks.
- Comply with laws and regulations: Retailers must stay updated with labor laws such as the Fair Labor Standards Act (FLSA), nondiscrimination laws, and the federal minimum wage law to avoid penalties and legal consequences. Prioritizing data security and privacy will help safeguard sensitive employee information. Finally, they must enable fair shift policies with non-biased weekly shift patterns rotations, uniform distribution of night shifts or early morning shifts, and safe shifts for female staff.
TAKING A HOLISTIC APPROACH
Intelligent automation is not just about streamlining workforce management processes.
It is a comprehensive approach that empowers retailers to leverage their most valuable asset, their workforce, to its fullest potential. By adopting advanced technologies and data-driven insights, intelligent automation can play a significant role in optimizing workforce management. Retailers can tailor strategies based on individual employee strengths, preferences, and growth trajectories. This can help enhance operational efficiency, workforce productivity, and overall performance. They must carefully orchestrate the integration of intelligent automation, ensuring it aligns with company culture and values. Reskilling and upskilling employees to work alongside automated systems are integral to successful implementation.
