Innovative Retail Technologies

NOV-DEC 2016

Innovative Retail Technologies (formerly Integrated Solutions For Retailers) is the premier source for innovative yet pragmatic technology solutions in the retail industry.

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warehouse to stores. But to ensure timely and efficient in-store fulfillment of e-commerce driven activities, the OMS must be tied to a real-time store execution platform," he says. He says investment in a platform that integrates with dozens of store-facing systems, including legacy systems that have been in play for years, is necessary to preserve existing investments. Integration of the platform should be enabled by both tried and true batch data uploads and newer technologies such as RESTful services and real-time messaging. The platform should also be capable of evaluating up to hundreds of thousands of messages per second, prioritiz- ing them strategically, and sending alerts with recommended actions to people in appropri- ate roles in the organization. Orr reminds us that the equation doesn't end with the fulfillment of the customer order. "What goes out the front must be replaced in the back, resulting in a river of expected work demand in receipts," he says. "Tight integration of this nonsales/service task work with mod- ern WFM applications allows more accurate projections and measurement." Orr explains that some task work is expected on a daily basis and is impacting the core daily labor models through base coverage and/or earned hours for the work. Other task work related to modern commerce is less frequent but has to be captured properly and is typically done through task management applications. "Task management enables closed-loop workflow and communication, monthly and weekly planning and budgeting, coverage and sched- uling, as well as assignment and tracking," he says. WFM Analytics Drive Improvement We asked Palakurthi and Orr what data merchants should evaluate to drive ongo- ing improvement of associate-driven store execution tasks in the omni-channel age. Both agreed on the importance of efficiency scores. From a team perspective, efficiency scores are a derived key performance indicator (KPI) that has increased in importance in the past several years. They measure the efficiency, and therefore effectiveness, of how well the store is covering demand given the budget. "Eighty-five percent or better is the threshold efficiency score typically sought, and retailers are using this to compare with conversion and Net Promoter Scores," explains Orr. Like conver- sion, retailers are also using this to measure improvement trends. "Having high efficiency scores ensures that their service quality levels are being met or exceeded, and units per transaction, conversion, and sales lift are more likely to happen given proper sales training," says Orr. If this KPI is low or trending down, Orr says it's often an indicator that managers are editing schedules for convenience versus business needs, and/or the store is under- or overbudgeted. Palakurthi adds that analysis of scheduling anomaly data can help merchants answer labor operations questions, including: • Which store managers are making too many edits to optimized schedules, defeating the purpose of aligning associate schedules to customer demand? • Which store managers' editing practices are beneficial, and whose practices should be incorporated into scheduling systems logic? • Which stores are consistently missing sales and labor budget goals and why, due to schedule changes? Orr says sales per hour and conversion tar- gets should also be closely monitored. "Many retailers tell us that they have to pay for every dollar of sales, which is true. Although not the only important KPI, it provides visibility into the productivity of every associate labor hour," he says. When tracked properly and defensi- bly, associate sales per hour metrics provide visibility into your best sales associates, subject to day and time of week realities. Conversion measures transactions per traffic count and is the result of whether the store is taking advantage of and leveraging its resources, training, and merchandise to drive more sales. "Matching efficiency scores and sales per hour on a team and individual basis adds further visibility for managers," says Orr. Palakurthi and Orr agree that peak cover- age and time and attendance metrics are also important. "Retailers need to put their highest skilled associates in the right positions during the peak times to drive the highest perfor- mance," says Orr. But he cautions that some legacy systems, which allow retailers to rank associates, are too subjective and manual. "Best at-peak coverage is defensible and integrated from other systems based on data measurements and fact," he says. Palakurthi, however, cautions that these coverage deci- sions need to be made in accordance with time and attendance work rules to guard against employees passing into overtime status and/or qualifying for full-time employee status. "Time and attendance metrics will also reveal associates who have attendance issues that need to be addressed and which ones are consistently on time and should be rewarded," he says. WFM analytics also help merchants imple- ment and execute on performance-based scheduling. "In today's retail environment, integrated HCM enables the ability to measure performance, leverage that performance for best at peak, then close loop it back to performance management," explains Orr. "The better an associate performs, the more at-peak opportunities he/she will receive, and overall performance and profitability will lift." Palakurthi says these task execution metrics will also uncover: • Which stores are completing promo- tions, seasonal campaigns, product launches at exactly the right time, not several hours later when half of the day's shoppers have already come and gone. • Which stores rapidly resolve non- compliance issues related to loss prevention, safety, and other policies that impact associate and customer well-being, and more importantly, which stores or departments do not. Most importantly, says Palakurthi, manag- ers need access to critical information on a timely basis. "With real-time analytics, manag- ers from headquarters to stores can proactively respond to issues and opportunities instead of finding out after the fact, often when it is too late." Workforce management applications have quickly become sophisticated, tightly integrated systems that are critical to efficient omni-channel operations. As digital con- sumer touch points and fulfillment options multiply and create a measurable impact on store labor, WFM has assumed a critical role in store execution. 31 Nov-Dec 2016 Retailers need to put their highest skilled associates in the right positions during the peak times to drive the highest performance. Best at-peak coverage is defensible and integrated from other systems based on data measurements and fact. John Orr SVP Retail, Ceridian HCM

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