Tanda Blog: Industry Insights

Industry Insights

Why Pharmacies Love Tanda

Tanda spoke to Jarred, Co-Owner of Marraboor Pharmacy about his experience using Tanda. Marraboor Pharmacy is a locally owned and operated pharmacy located in Swan Hill. They have been providing great quality service and health advice to the community for over 50 years. Known for their friendly and knowledgeable staff, Marraboor Pharmacy provides a range […]

4 Tips to Maximize Table Turnover and Staff Productivity

The pressure is on to maximize table turnover and your entire staff’s productivity at your restaurant: on one end, you have no empty tables with more customers hanging out outside or by the bar, waiting to be served. On the other, your team is pushed to serve every dish and bus out every plate as […]

Is your workforce prepared for Artificial Intelligence?

Ikea recently announced its intention to explore Artificial Intelligence (AI) through a customer survey ‘Do you speak human?’. It’s a novel idea for a company that makes a living selling flat pack furniture, however, they are right on the money. AI has grown dramatically over the last few years, and it’s expected that the market […]

The Benefits of Cloud Software for Pubs & Clubs

Cloud technology is the latest technical evolution sweeping the industry delivering unprecedented value, capabilities and potential to businesses of all shapes and sizes. Pubs & Clubs are increasingly embracing new and exciting cloud technology; from automated inventory, mobile POS, and cloud payroll solutions. What is the Cloud? The cloud in its simplest form is a […]

The next stage in retail evolution?

Three reasons why you should integrate your POS software The advances in credit card technology and the creation of the of the electronic payment terminal in 1982 revolutionised payment processing for businesses around the world. It leads to better cash flow management, and an increase in sales processing efficiencies, ultimately influencing customer spending behaviour. Over the […]

Are your staff qualified to work?

Knowing when staff are working is one thing, but knowing that staff are qualified and competent can add a huge reassurance for employers. Industries such as hospitality, childcare and medical services are required to track staff qualifications to meet legal compliance regulations. In addition to recording staff qualifications, childcare centres are required to display staff […]

Embracing Smart Tech for Franchise Success

The Australian franchise space is embracing technology to become more heavily engaged with their consumers, strengthening their brand and relationships with customers. However, issues such as compliance, brand reputation and franchisor oversight are becoming more regulated, franchisors must be proactive in protecting their brand reputation and mitigating potential risks. Best practice franchisors are embracing smart […]

Domino’s and Tanda: Building the Workforces of the Future

Brisbane-based company Tanda has today announced a business partnership with Domino’s Pizza Enterprises Limited, to automate and optimise the company’s payroll process. The partnership will assist Domino’s in empowering its franchisees with the right technology and tools to efficiently manage rostering and payroll as a competitive edge. Tanda Director Tasmin Trezise said he is excited […]

Why graduates should consider startups for a career

Today’s corporate society is changing as businesses begin to measure their success by culture and impact rather than head count. While this attitude change may be slow coming for some, for graduates it represents unlimited career opportunities. The world of today’s graduates differs greatly from that of generations before. It is shaped by agile roles, […]

“If in doubt, ask a customer” – How We Build Product at Tanda

Since 2012 Tanda has grown from me and a few mates in a share-house to a business employing 30 people. Most of that growth was in the last 18 months, as both our product and customer success teams have tripled in size. There’s been growing pains, but I’m happy with the point we are at […]

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How this retailer increased profit by $8.9m from rostering more hours

There has been a lot of speculation on why we are losing retailers so fast. An interesting research piece from the US presented an alternative hypothesis that generalises the issue down to rostering for profit rather than rostering to control costs. For context – If you were given the choice of increasing revenue by 5% or reducing costs by 5% in order to create the most profitable outcome, what would choose? A “back of the hand” calculation would show that reducing costs increases profit more than the equivalent uptick in revenue. Accordingly, most retailers choose option two. This makes sense if you assume the two scenarios are independent of each other, but what if the cost was your employees? This is where the problems arise. For industries like retail, where staff have a direct impact on sales, it’s not as simple of a question as cutting costs to increase profit. In a study led by Professor Marshall Fisher from Wharton, he and his research team constructed a conceptual model from historical data to identify stores within a US-based retail chain that had the highest potential to benefit from increased labour spend. Importantly, the strategy was actually implemented at 168 retail sites over a 26-week period to validate the model, with the retailer electing to implement the strategy further. The result: A near $8.9 million increase in profit of the stores included. The labour cost challenge The challenge in allocating labour budgets lies in the tradeoff between the known immediate payroll cost and the less certain increase in sales that could be achieved with more staff on hand. The researchers point out that retail managers have a tendency to overweigh the decision to reduce the known payroll cost than the less certain increase in sales which could be achieved by allocating additional labour spend. The labour budget death spiral The study highlights the limitation of the most common retail strategy — setting labour budgets as a portion of sales. Fisher points out that this approach creates a circular problem by failing to take into account how store labour spend can positively impact sales, with the worst case leading to a spiraling effect of reduced sales forecasts reducing labour spend which reduces sales further and so on. Quantifying the impact of labour spend on revenue Creating labour budgets that are designed to maximise profit requires retailers to know on a store-by-store basis the correlation between labour-spend and sales. One way to do this is by looking at times when staffing levels deviate from the original schedule. If ten staff were scheduled on a particular day, but on that day only eight turned up, did sales also decrease by the same portion? If not, by how much? If the answer to the above is that sales didn’t decrease at all, the store is likely overstaffed. If there is a measurable impact, the inverse scenario is likely true and the store may be losing sales by being understaffed. This is the same approach used in the study, which found the relationship between random staffing deviations and impacts on sales was statistically significant. Results showed an increase in labour spend pointed to increased sales at varying degrees, depending on known store attributes. Implementing the strategy for profit The study identified stores in a US retail chain which had the highest market potential, making them good candidates for an increased labour spend. The market potential factored in attributes like average basket value and proximity to competitors, which would create scenarios that allow workers to have the highest impact on converting sales. In the study, 168 stores were selected this way, then allocated a 10% increased labour budget over a 26-week period, of which 75% of the increase was actually consumed in practice by the stores. The outcome was a 4.5% increase in revenue at the impacted stores and resulting in a near $8.9 million profit increase. Learning from the strategy The study shows empirically why the common practice of setting labour budgets as a fixed proportion of forecasted revenue is often self-defeating when applied in a retail setting. An opportunity exists to all retailers to leverage this same profit-centric model for defining labour budgets. The data required is available to all retailers however, it may just be a matter of leveraging that information with the right systems. An integrated forecasting strategy that integrates foot traffic, sales, and employee scheduling data is a practical opportunity afforded to retailers of any size to optimise their labour resource allocations. The interesting part is, Fisher’s research is readily available to all retailers who are looking to drift away from the traditional method of fixing labour budget rosters. The next step is to get this method of labour resource allocation battle-tested in the Australian markets. Stay tuned. Up next: What is the Contingent Workforce and how can you leverage it in your business?

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