Many retailers are still at the edge of their seats as inflation remains high. Supply chain issues, labor shortages, and fluctuating consumer behavior continue to persist. And costs are still soaring on everything from raw materials and freight to wages.
More than ever, cost-efficiency is essential for retailers to stay afloat. But doing so without compromising the customer experience and sales targets is a tough balance.
While retailers aim to avoid overspending on labor during quieter hours, they also want to have enough staff on the floor to keep up with demand and maximize sales. Luckily, there are effective ways retailers can find middle ground here.
Read on to gain tips on how two retailers are successfully saving costs and staying ahead of inflation.
Ace Hardware
Controlling costs, managing staff ratios, and scaling storefronts were tall orders for Lance Stillwaugh, owner of Thorton and Hidden Lakes Ace Hardware.
His team couldn't determine how many staff they needed for peak periods or see the number of employees they needed during slower days. In turn, they weren’t able to create cost-efficient schedules. This put them at risk for overspending on labor during slower periods.
“We weren’t efficient in managing the time that we needed associates. We tried to balance labor based on the customers per hour. But we didn’t do very good forecasting,” says Lance.
So, both his Ace Hardware stores invested in a smart demand forecasting software to track payroll percentage and keep labor costs under budget. They found great success in predicting ideal staffing using inputs like sales per hour, foot traffic, and weather.
The platform gives their business a real-time bird's view of payroll costs compared to sales when creating team schedules. And this makes it easy for them to adjust scheduling staff up or down based on business demand, employee skill sets, or staff scheduling preferences.
“I like the fact that we can look at the dashboard and see the stats page and make adjustments in the middle of the week if necessary, move people into different roles, as well as schedule a little heavy on some if we think things are going to be busier,” Lance explains.
The investment yielded strong results for his team. They’ve reduced their labor cost percentage by 10% YOY. Even more, they chose a smart software that also makes it easy for their businesses to manage labor laws. This has helped them stay on top of compliance risks and avoid high penalties.
“It’s helped prevent errors in our timesheets as well. Everyone logs in, and they can see their time, which is also helpful with conforming with labor laws in Colorado.”
Juice Press
Juice Press faced a real challenge: creating cost-efficient schedules and streamlining communication for 350 employees across 85 locations without the right software.
On top of that, the retail landscape and labor market had completed shifted under their feet post COVID-19, with labor shortages and changing consumer spending habits.
“In a market post-COVID where New York is still recovering, we’re seeing our stores come back at different rates…being able to look at scheduling and labor allocation in a really easy way and compare that to sales is important, so we can be nimble and adjust quickly to what we need to do for the company,” says their COO, Ariana Korman.
When they began searching for employee scheduling software that could help them forecast labor demand and get really smart with their staffing, Deputy was a perfect match. The platform allows their business to optimize staff schedules by analyzing labor and sales trends, which has saved them significant labor costs and increased revenue.
The data-based insights help them understand when they need to schedule more staff, and when they’ll need to be conservative with staffing resources. “We have saved over $200.000 a year on front-of-house labor just by being able to manage it better and being able to put the right people in the right places. We’ve also been able to increase revenue at stores because we can reallocate labor,” Ariana shares.
In addition, the Newsfeed feature allows Juice Press employees to take ownership of their own coverage, communicate about tasks, and build team culture across their stores. “The benefit of using Deputy is really operational efficiency…it gives our employees a lot of empowerment in managing their own schedules,” she adds.
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Save time and money for the long-run
Combating inflation is a steep obstacle for many retailers. But remember: one of the most effective ways to protect your bottom line is through cost -efficiency.
Save on costs where you can, especially on labor and operating costs. To make this possible, take advantage of smart platforms with demand forecasting that makes it easy for your business to hit targets, stay on budget, and avoid overspending.
Bonus: find one with compliance management to help you navigate complex labor laws. This will be helpful if you own or manage many retail locations.
It is also worthwhile to evaluate your current platform(s) and spending. Is the money being spent effectively? Set aside some time to see if there could be one that’s a better fit to help you meet business initiatives and give you immediate savings. The time you allocate for this could end up saving you significant time and money in the long-run.
Need a hand in staying cost-efficient, meeting customer demand, and maximizing sales? Get our free Ebook: Retailer’s Guide to Labor Demand Forecasting.
