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 years the technology has developed, and advancements like contact-less payments, NFC and card-free payments have emerged. However the next technological wave of retail evolution is upon us, and it’s time for businesses to dive in head first.
Cloud software has been the latest revelation in technical advancements. POS, Payroll and Workforce Management, the list could go on. While each of these individually represents a leap in innovation in their own right, the true value lies in their interconnectedness.
On one level integrating Workforce Management software and Payroll software makes sense. It’s practical, efficient and creates order in what can potentially be a frustrating and time-consuming process. However, integrating POS and Workforce Management software goes further as it enables the user with the ability to make smarter decisions, such as:
1. Roster the right amount of staff every time
Ever look across the store to see staff twiddling their thumbs or a huge line at the checkout? Welcome to the complex world of accurate rostering, where you’re either increasing your staffing expenses or losing potential revenue. But, it doesn’t have to be this way. By integrating your rostering system and sales data, you can make smart decisions to have the right amount of staff every time.
2. Make decisions in real time
Thought you were going to be run off your feet this week, only to find that sales are slowing and business is quieter than expected? Once you’ve integrated your sales data into your rostering system, you can make real time decisions on staffing levels, rather than reviewing at the end of each month. Track your revenue and wage percentage costs in real time, so you can alter and adjust the roster as the day or week changes. Of course, all your staff are immediately notified of changes, so everyone’s kept in the loop.
3. Be future orientated, move your business forward
Stop looking backwards at last week’s rosters, timesheets and payslips to make next week’s decisions. Workforce Management software has come along way from the paper rosters and timesheets. It’s now possible to not only forecast future costs, rosters and staff requirements but also automate the entire rostering process with cognitive rostering software.
The rise of internet shopping and retail giants like H&M and Zara means that traditional ‘brick and mortar retailers’ need to be using every edge possible to stay competitive, relevant and front of mind for customers. Businesses that fail to embrace technology as a tool for success, are likely to struggle under the weight of the world that is rapidly embracing a more digital and connected world.
How many times have you walked into a store, only to find that you can’t be served because the company is understaffed? While the economic benefits that come from an optimised roster are apparent, the value that comes from roster optimisation is expressed tangibly on a daily basis through customer service and customer retention.
According to customer experience research conducted by thinkJar’s Esteban Kolsky, 66% of consumers who switch brands do so because of poor customer service and 85% of this customer churn could be prevented.
Kolsky also notes that attracting customers is an expensive exercise costing businesses approximately six to seven times more to attract new customers, rather than retain existing customers. Building on this, further research shows that you’re 14 times more likely to sell to an existing happy customer than a new customer. It is therefore essential that retailers are providing the best customer service experience, to ensure customer retention.
Businesses that optimise staffing rates for peak sales periods, will have the correct staff to customer ratios, creating efficient and favourable customer service experiences, resulting in higher customer retention rates. For traditional retailers, customer retention is paramount, as it not only ensures business continuity but also becomes a significant channel for acquiring future customers.
Differentiating your business through excellent customer service and optimised staff efficiency, not only provides the competitive edge but also allows for financial stability and security as you can confidently make future oriented decisions to grow your business both financially and professionally.
POS software integration is the next step in retail evolution. Like the payment terminal revelation before it, POS data integration will change the way businesses operate and what it means to be a traditional business in a digital world.
Industry Insights |
Change Might Be Coming to Hospitality and Retail Owners
This one is looking at all you Food Produce and Hospitality business owners out there in the Tandaverse. It has been announced that the Senate will launch an inquiry into the Australian Wine Industry. Tanda users in wine country, also known as South Australia, may have already heard South Australian Senator Anne Ruston moved for the inquiry to see if there’s a market failure. This means having a look at that transition from vineyard to restaurant. In true politician style, Senator Anne Ruston says things are going well for the wine industry in Australia, but there may be opportunities we have missed and certain factors going against us. This is all very vague and contradicting. Managers and business owners out there know hearsay is useless for your growth. Facts and numbers are the things most important to you. So what does all this actually mean for you? Well, what is unusual in politics is that it seems all sides of government are for the inquiry. Senate has reported that though the broad-ranging report is still in the process of conception, it would take a look at the power and influence of retailers and wholesalers of Australian wine in domestic and international markets. Not only will it uncover information beneficial to retailers, it’ll examine existing policies like the Wine Equalisation Tax. Though it’s quite apt that the policy is named WET, refrain from wetting your lips to celebrate just yet. Things could be in the process of changing for better or worse. But this is only part of a bigger picture. Free Market Trade agreements are on the table now making it an exciting time for Australian business owners. Tanda, and we’re sure you guys too, are very keen to see how this inquiry unfolds in the near future and beyond.
Industry Insights |
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 labor 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?
Awards & Rostering |
Black Friday Blues? 5 Tips to avoid a staffing slump
Retailers all over the U.S. take the time to prepare and advertise Black Friday deals and discounts, for good reason: last year, retailers earned $7.9 billion on Nov. 24. This figure represents an increase of nearly 18% from a year ago, and research indicates it can only go up. And while online shopping is all the rage, store traffic only declined by 1%. This means a considerable number of shoppers still prefer to get their retail fix in brick-and-mortar stores. Others engage in both types. The situation presents a significant challenge for managers nationwide. So if you’re managing a business, here are 5 tips you can use to avoid a staffing slump on the most important day of the year. Leverage your pool of part-time staff Part-time workers, also known as the contingent workforce, is a subsection of the broader workforce that works on a flexible basis. This includes casuals, contractors, and temps across a wide range of skill sets and capabilities. They may choose to work for one business at a time. They could also make up their working schedules across a variety of employers. During shopping holidays, they can make the difference between success and chaos. Many employers see part-time workers as a last resort. However, effective managers will instead schedule them on a regular basis to improve customer experience and increase sales. Part-time workers are flexible, so productivity is greatly improved without additional permanent wages. Based on your data of peak hours and most critical tasks, leverage your pool of part-time workers to ensure there is no gap in your operations. And make sure to contact them early, because many other businesses will be demanding their services this season. Read more: What is the Contingent Workforce and how can you leverage it in your business? Distribute your A-Team Good managers know how to delegate properly and rely on the best of the best to do it. During shopping holidays, it’s necessary to make sure that each shift and each team has at least one key player who can handle the pressure. But even the top performers need an effective support team to function, so you’ll need to spend some time on getting the mix right. Start by pulling POS software results from past Black Fridays, and distribute your best associates among the different teams. Schedule more top performers during peak hours to prevent overall burnout. Read more: William Gooderson’s 8 Characteristics of Good Managers Set targets and rewards With the Christmas holidays just around the corner, many employees will be looking to make bonuses. This is especially true for part-time workers who may have had erratic schedules and inconsistent income. One effective way to motivate everyone to perform at their peak on Black Friday is to set clear targets, and rewards when they’re reached. Cash and gift cards are popular, but another option is to put up some of your merchandise as rewards. To prevent unhealthy competition, give them out on a team basis, or hold a raffle whenever a goal is reached to energize employees. Brief staff, communicate changes early The pre-Black Friday briefing is extremely important in setting expectations and reminding everyone of the best practices to be followed. This is also the best time to go over safety reminders, as serious accidents have happened in the past. Employees need to stay calm throughout the day and take crowd management seriously. Mistakes and malfunctions will happen, but that’s just part of the process. Start with preparing them for the correct mindset, and emphasize that as long as the team works together, Black Friday will be a productive experience. If there are any changes in the schedule, make sure to tell them days in advance. This will avoid unnecessary stress on the day itself, especially if you are managing different locations. Workforce management software like Tanda make it easy to schedule staff and communicate changes via SMS, email, or in-app notifications. Tanda also creates accurate timesheets ready for export and compatible with most payroll software out there, so paying employees for Black Friday will be a breeze. Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today Don’t forget Cyber Monday Many customers split their time and money between Black Friday and Cyber Monday. Last year, digital transactions reached a record $6.59 billion, a 16,8% increase from last year. Clearly, Black Friday shouldn’t be your only priority when it comes to staffing, especially if you run an online store along with your physical one. Heavy online traffic brings with it system and customer support challenges. Make sure your online teams aren’t too worn out from Black Friday and be ready to call in additional staff. Black Friday is the busiest day of the year for retailers. However, there’s no reason why employee and customer experience alike can’t be planned out to get the best results. Keep in mind that these opportunities are not just for sales. They are also there to hone company best practices and train future managers of the company. So when you’re planning out your staffing for Black Friday and other shopping holidays like it, look at the big picture. Invest in technology that will help you in the long run. And most importantly, invest in the people who will make those sales happen.