As the effects of the COVID-19 pandemic lessen, the retail sector faces a unique challenge. While some consumers are spending more after two years of lockdowns and reduced activity, others are not. Inflation, rising prices, and mass layoffs are creating high levels of economic uncertainty. That uncertainty is translating into unpredictable consumer behaviour at a time when retailers are desperate for certainty.
Even before the pandemic, the retail sector was struggling to balance rising costs with a changing customer base.
“Margins are stressed from all sides,” noted a report by McKinsey back in 2019. “Higher costs to manage e-commerce supply chains, growing demands from suppliers to pass on raw-material cost inflation, higher investments to match new competition, and steadily rising labour costs,” are all pressuring retailers.
Today, that uncertainty is mixing with growing economic pressures. The results are threatening to create genuine pain points for retailers.
A recent survey by Prosper Insights & Analytics found that 36% of American consumers were reducing their shopping trips. At the same time, however, 42.4% were found to be shopping more during sales events. These conflicting trends make it difficult to predict demand.
Now, retailers are turning to technology to find their feet. Technology ike intelligent automation and artificial intelligence (AI) will, they hope, help meet the need for predictability, cost-savings, and efficiency.
A platform approach to retail
Sanish Mondkar, founder of Legion and ex-SAP exec, came “face to face with the labour crisis during a long road trip across America.”
In an interview with Forbes, Mondkar explains how “It was striking to see labour-intensive businesses like retailers and restaurants having perpetual ‘for hire’ signs outside their locations, but at the same time, employees were changing jobs at a rapid rate and still couldn’t make a living wage.”
Mondkar’s company operates a workforce management platform he says helps retailers “strike a balance by offering workers the autonomy typically associated with gig jobs while ensuring the stability of hourly positions — without sacrificing labour efficiency.”
A great deal of the increased efficiency that platforms like Legion offer stems from intelligent automation. Workforce management platforms are leveraging digital tools that can automatically deploy surveys to team members, deliver feedback, confer well-earned awards, and provide instant access to earned wages.
Most importantly, they can automate scheduling by predicting demand based on past data. “By leveraging data from historical and ongoing operations, local events, weather, and holidays, we assist retailers in obtaining a truly accurate understanding of their expected demand across all customer touch points and locations every 15 minutes,” Mondkar explains. He adds that this enables retailers to ensure the right number of workers are scheduled on particular shifts.
- Digital Strategy
