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.
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.”
Weekends Only was spending money on time and attendance systems that weren’t helping them reach business objectives. The previous systems slowed down team communication and collaboration – which impacted the employee experience. As a result, their team wasn’t hitting goals and losing valuable time that could be better spent on growing the business.
“We worked with a couple of different systems to try to build and work with their tools, but they weren’t able to take into consideration a lot of layers that we wanted to add in,” says Heather, former Talent Solutions Manager for Weekends Only.
So, they began looking into a more robust scheduling and HR system that could help them create stronger workforce efficiency among 400 employees. They kept an eye out for a system with different functionalities that could help them save on costs and time immediately.
One of those functionalities was scheduling visibility. After finding a system that offered this, managers could see who’s available for open shifts, who are trained in particular work areas, and get employee suggestions. And employees could access their schedules, swap shifts, and check for timesheet accuracy.
This helped their business save on costs by having higher attendance rates and appropriate staff ratios during various peak periods. “I would say we have a very lower percentage of no-shows now. Scheduling visibility has created much better attendance,” says Heather.
In their search, they were keen on adopting a new system that could integrate with their existing platforms and offered automation to save their team time on manual work. Two to three managers used to spend four hours per week doing admin tasks that could now be done within an hour with their updated system.
That time savings end up being worth 336 hours per year – which is worth approximately $48k annually to their business. Also, managers and leaders have been able to use that saved time to focus on employee development and engagement – which are all key to staff retention as turnover can be costly.
“Ultimately, what led us on the search for a new system is the obstacles that were preventing our leaders from focusing on things that are impactful to the business,” Heather shares.
Their search took some dedicated time, but it was worth it as Weekends Only also saw an immediate return on investment of $10k.
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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 cutting costs and boosting profitability? See how Deputy can help.