Operations Insights
February 12, 2024

Employee experience is customer experience: NRF 2024 Retail’s Big Show

Labor shortages are making it difficult for retailers to maintain an exceptional customer experience, an essential competitive differentiator in a noisy market. Reflecting on NRF 2024, here’s how retailers can “make it matter” with their workforce strategy.

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After years of major disruption, NRF 2024: Retail’s Big Show proved the value of the on-site environment. This year’s theme of Make It Matter directly referenced the drive retail leaders are feeling to make an impact with every workforce decision. With ecommerce slowing down in a crowded marketplace, the customer experience in stores has become a key differentiator.

But labor shortages have made it even more difficult for leaders to manage turnover and keep their workforce engaged, especially when retail associates are a key agent in customer service and reaching corporate targets.

There’s value in looking ahead. John Furner, President and CEO of Walmart U.S., referenced founder Sam Walton whose mindset was that leaders can’t just keep doing what works one time when everything around you is changing. Success requires staying ahead of change.

Consumer expectations have fluctuated throughout the post-pandemic years. They want a faster, more personalized shopping experience, and to seamlessly transition between browsing and purchasing in digital and physical locations. Creating a truly unified commerce experience requires a more agile workforce that can move between physical stores and ecommerce fulfilment, without continually adding headcount.

This sentiment extends to retail managers and their workforce. The past two years were strong for retailers, but with consumers pulling back their spending, companies are trying to be more impactful with the resources they have. Companies need to forecast and schedule staff effectively to match demand in their stores and warehouse locations. And retailers need to be more strategic than ever to manage their resources efficiently.

Yet, today’s retailers are stuck in a perpetual balancing act of employee expectations and aggressive operational goals, making it difficult to achieve maintain a productive and profitable workforce.

Forecasting with impact 

Forecasting models were on everyone’s mind at the show for addressing the today’s continually shifting challenges. Keynote speaker Michelle Gass, President of Levi Strauss & Co., said one of the key principles for creating a unified commerce experience was that everyone today needs to think like an omnichannel retailer. When it comes to staffing effectively, retailers can navigate the balance of costs and productivity by leveraging the power of machine learning in labor planning.

Using machine learning and data assets can help managers bridge gaps in planning on the floor to make better decisions about staffing. Organizations now hold so much data that there’s an expectation from the top that leaders will translate this data into time-sensitive, real-time insights. They want to act right away to prevent no-shows and manage overtime and labor costs. In addition to planning for the short-term, when leaders can forecast future labor requirements, they can allocate workers more precisely to help reduce unplanned overtime and provide associates with more notice and flexibility.

Anshu Bhardwaj, Senior Vice President and COO of Walmart Global Technology and Walmart Commerce Technologies also spoke on how AI can help workers evolve with the times with expertise at their fingertips. Today’s pacesetters will embrace AI, automation, and self-service technologies to simplify repetitive tasks. This will help refocus the whole workforce on the most meaningful work. Predictive technologies can create more agility in workforce operations to better forecast demand, manage day-to-day availability, and match labor to work. This process can be taken a step further to create a better experience for long and short-term planning, with workforce insights through scalable data models.

Planning to share

CNBC senior economic reporter Steve Liesman spoke on the state of unemployment rates and the health of the retail industry. The decline in labor post pandemic means some companies may be “labor hoarding” beyond their need for those workers, which could lead to accelerated unemployment rates if there is a recession on the horizon. 

Dayforce's 2023 Executive Survey found an interesting contradiction of the labor shortages and ongoing complexity crisis. Of employers surveyed, 88% of respondents said labor shortages are likely in their organization in the next year, yet 81% said layoffs are likely in their organization during the same time.

Retailers need to pull all the levers at their disposal and allow stores and locations to spread their workforce for the highest impact for the business. Talent sharing across locations allows organizations to be more flexible with staffing to match demand, whether that requires coverage in store, curbside pickup, or online delivery. Advanced workforce management allows managers to view the workforce from a high-level perch, accounting for associate flexibility and skills, while seamlessly integrating seasonal and contingent workers.

Unleashing your workforce potential

Managing employee expectations and budget realities puts managers in a tough balancing act. Front-line workers want schedule flexibility and will prioritize employers that offer this job benefit. In Dayforce’s 14th Annual Pulse of Talent research, half (52%) of respondents said having flexibility and work-life balance is one of the most important attributes in their job. However, only 21% of employees surveyed said they are offered a flexible schedule by their employer today. Providing flexibility in a fast-paced industry can be challenging, especially for mangers responsible for building fair schedules on budget or introducing more risk to their organization.  

“Retail and hospitality employers need to strike the right balance of appealing to employees’ documented desire for greater workforce flexibility, while managing their sector’s unique staffing and compliance challenges, which can be time-consuming and inefficient to manage,” said Jack Bennett, Vice President and Retail Solutions Advisory Lead. “Modern workforce management systems can help leaders maximize their workforce to better support demand, while minimizing risk to their operations.”

To thrive and be agile in an unpredictable industry, retailers need their employees to be engaged, productive, and addressing the needs of customers. To manage labor costs and staff shortages, retailers are looking to technology to help optimize and automate elements of their workforce planning, keeping with NRF’s “make it matter” theme. Modern workforce management can allow employees to take on shifts at any location of their choice, giving them more flexibility for when they choose to work and allowing them to meet their own financial goals. From a manager level, these systems help fill their labor demand without the additional costs of outside resources.

Retailers have to work harder than ever to balance the employee experience against challenging productivity requirements and tight profit margins – and their customer experience depends on getting it right. As we saw at Retail’s Big Show, the right technology can help simplify complexity, optimize the workforce, and support compliance so retailers can put their focus where it should be – their customers.

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