Consumer trends and behavior continue to undergo a systemic shift as buyers change their shopping preferences from the traditional store to e-commerce, mobile, and other channels.
Retailers are feeling the impact of the shift from in-store buying to online buying, and are left with two choices – to focus on rapidly moving toward channels out of brick and mortars or to drive efficiency and essentially reinvent the customer experience in their existing stores. Most retailers have chosen to reduce the size of their store footprint or abandon the store channel all together. Others are innovating and providing unique experiences for customers to drive traffic to their stores – including specialized services, products, and experiences.
Many retailers today are reliant on Microsoft Excel to support critical processes related to Store Payroll planning; however, in order to fully understand and analyze Store Payroll, more robust tools and processes are required. With the right processes and technology, retailers have the opportunity to better understand their Store Payroll expenses and optimize their strategy to include new investment or reductions in cost. Leveraging this information provides a comprehensive view for organizations to better forecast the future.
A detailed analysis of the historical performance of individual stores, vintages of stores, and store formats yields invaluable insight into the current expense landscape. For many retailers, even a small percentage impact on Store Payroll can yield millions of dollars a year in savings – and often can be done without an
Providing the ability to better analyze the “what happened?” and determine how to best plan for the “what will happen?” requires modeling key elements of Store Payroll:
- Management Payroll – Understanding the required levels of supervision and creating a leveraged model is critical to managing and controlling cost while yielding strong results. Addressing key questions such as: What is the anticipated level of management (Store, Assistant, and/or Department) required to support the store and the expected customer traffic? Do I need multiple department managers, a single department manager, or any at all?
- Selling Payroll – The ability to align labor to forecasted sales by day part is critical to optimizing labor expenses. Based on need store projections for sales, how do we best align the right level of coverage during peak times and ensure there are no lost sales due to inadequate staffing? How do we ensure that we have the right level of coverage in place to meet customer needs at the level of service we want to as a brand? (e.g., Sales Associates, Cashiers)
- Non-Selling Payroll – To support the sales volume of the retail location, there is typically a series of non-selling payroll activities required. How do we ensure we have the right inventory on the shelf to meet customer demand? How do we make sure the store looks appealing and is ready for customers? (e.g., Inventory Clerks, Maintenance, Space Management, etc.)
- Other Payroll – For luxury retailers, there are other elements of compensation that can drive complexity in the business process, including expenses such as: Commission, Spot Bonuses, and other sales incentives. How do we ensure our associates are driven to maximize their sales? Ensuring the right compensation structure is in place to drive the correct behavior is key.
Peloton believes that as the marketplace becomes increasingly complex with decreasing store traffic and other external factors impacting store sales, retailers that have the ability to better analyze and plan for Store Payroll will outperform their competition. The need to optimize the Store Payroll in each location becomes critical as stores look to reduce cost, increase customer service, or expand on the customer experience.
Our most successful clients are leveraging a robust Planning and Analytic platform – Oracle’s Cloud Platform – as the foundation for their Store Payroll planning and reporting needs. Peloton is strategically focused on enabling our Retail customers to drive business performance by utilizing top technology and a comprehensive strategy.
Contact us if you’re interested in learning more about how we have partnered with Retail organizations like yours to drive efficiency in the Store Labor planning and reporting process.