How Retailers Can Avoid Holiday Season Nightmares by Streamlining Store Operations

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In the retail industry, one fear prevails over all others before the holiday shopping season, and it’s not something that you once thought lived under your bed. That fear [cue Jaws theme] is sub-par sales.

The holiday shopping season is a retailer’s final push to beef up annual sales and please as many customers as possible. October is the final month before that critically important time, and it’s essential to make final preparations and ensure every store is clean, well-stocked, adequately staffed, and poised for success.

But this is no small task. Labor shortages, immensely complex inventories, fluctuations in customer traffic, and uncertainty in the supply chain make optimizing the shopping experience more challenging than ever.

So, how can you avoid the typical nightmare scenarios of being unprepared for the holiday rush?

By streamlining your store operations strategy with intelligent retail technology.

The following pages will examine seven nightmarish retail scenarios commonly experienced during the holiday shopping season, as well as how to avoid them by leveraging the right process and technology.

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The three technologies outlined in this paper are defined as follows:

Workforce management solutions: Intelligent labor budgeting, forecasting, and scheduling

solutions that automate labor operations processes with AI and machine learning

Store execution solutions: Retail-centered technology such as real-time task

management, streamlined communication, and other solutions that simplify task

execution processes at stores

Prescriptive analytics: An “actionable analytics” methodology that interprets data and

determines:

• What is happening

• Why it happened

• How much it is costing the business

• What to do about it

• Who should do it

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Staffing issues such as absenteeism can become increasingly

frustrating during the holiday season. For example, during the 2020

holiday season:

• 32% of retailers said employees would call out of shifts with less

than 24-hour notice at least two to three times a week

• 24% of retailers said employees did not show up for a shift and

did not notify their manager at least two to three times a week

• 55% of retailers noted that attendance issues were more

prominent among seasonal workers

This can make it extremely difficult to complete critical in-store

initiatives on time and can be detrimental to the customer

experience.

With intelligent workforce management, you can combat

absenteeism by providing your front-line employees with optimized

and flexible labor schedules well in advance, eliminating any

absenteeism issues that arise from scheduling conflicts. By

automating the scheduling process, you can immediately account for

employee preferences and availability, forecasted customer traffic,

and in-store workload, creating more accurate labor schedules that

better align with your employees’ needs and outside responsibilities.

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Increased Absenteeism1

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Omnichannel demand skyrocketed during the COVID-19 pandemic,

with many using curbside pickup, buy online pick up in store

(BOPIS), and other services to complete their holiday shopping.

Online purchases during the 2020 holiday season grew 32.2% year

over year, totaling over $188 billion.

Influx of Omnichannel Demand

And this translated to an increase in sales: digital sales from retailers

that offered curbside pickup increased an average of 49% from a

year earlier, compared with growth of about 28% for those without

curbside pickup. With demand for curbside pickup and other

omnichannel services at such a high level, and with that demand

staying high, it will be difficult for front-line employees to keep

up with the relatively new, labor-intensive process of picking and

fulfilling orders.

With a real-time task management solution, retailers can simplify

the process of managing curbside pickup and other omnichannel

services. These solutions provide front-line employees with a

prioritized list of tasks on a mobile device, as well as real-time

alerts whenever a curbside pickup order enters the system. Critical

information can be added to each task, such as pickup time,

whether an item needs to be refrigerated prior to fulfillment, or

if an item is heavy and requires multiple employees to carry it to

the fulfillment zone. In doing so, fulfilling curbside pickup orders

and other omnichannel services is much simpler, with far less

pressure being placed on employees to manage the chaos of heavy

omnichannel traffic.

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Retailers who want to maximize their holiday sales know that impulse

buys can make a huge difference. In fact, studies show 5 in 6 Americans

confess to giving in to temptation and making impulse buys. But

there’s also a way to increase sales even further on impulse buys – via

complementary items.

Most retailers are very familiar with the concept of complementary

items -- two or more items that are frequently purchased together

and generate a halo effect by increasing sales. These combinations

may be intuitive (e.g., shampoo and conditioner) or unexpected

(e.g., diapers and beer). With the right process and technology,

you can easily get the insights that reveal these complementary

item combinations.

Prescriptive analytics provides that visibility. The right “pattern

family” (a group of algorithms within the solution that look

for specific data behaviors) can analyze millions of historical

transactions for the exact items you plan to promote during

the holiday shopping season. It then identifies other

products that were often sold with these promoted items

and automatically directs your merchandisers and store

associates to display them close to one another on the

sales floor and online (e.g., in the “Other Items You May

Like” widget). The result? Increased sales and a better

customer experience via simple impulse buys.

Lagging Impulse Buys3

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Seasonal Staffing Challenges4

Understaffed stores were a massive issue during the 2020 holiday

season, exacerbated by the safety and capacity restrictions imposed

by the COVID-19 pandemic:

• 96% of retailers said that their company faced hiring challenges

• 40% of retail managers said stores fully met their hiring goals

• Stores were understaffed 30% of the time

These staffing challenges have a ripple effect, overburdening

employees in understaffed stores, making it difficult for employees

to get critical tasks done on time, and lowering the customer

service and satisfaction levels. This can damage employee morale,

decreasing engagement and retention throughout the holiday

season, not to mention the negative impact on sales.

Intelligent workforce management solutions use AI and machine

learning to generate optimized labor forecasts and schedules,

identifying and correcting for trends and anomalies in forecasting

data to combat the disruption of unforeseen events. These solutions

improve scheduling efficiency, utilizing each employee to the best

of their ability, blunting the impact of understaffing issues – all while

ensuring equitable employee work schedules. With the ability to

schedule at the market level or to schedule an associate for multiple

roles throughout the day, you can also share resources and better

address staffing challenges within regions.

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Few things ruin a holiday shopping experience faster than

“phantom inventory syndrome,” whereby your inventory

management system falsely claims that certain items are

available due to unreported damages, theft, etc. Phantom

inventory skews your records, making out of stocks much more

likely.

By extension, those out of stocks alienate your customers.

According to retail surveys:

• 39% of consumers have walked out of a store without

buying anything due to an out of stock

• The percentage of customers satisfied with in-store product

availability dropped 11% from 2020 to 2021

This is the absolute last thing you need amidst a busy holiday

shopping rush.

Excessive Phantom Inventory

From a customer standpoint, phantom inventory is especially

problematic for BOPIS / curbside pickup customers. If a

customer orders an item after seeing it listed “in stock” online,

but the picker can’t find it on the shelf or in the stockroom, the

item will either be substituted or canceled outright. In either

event, the customer may become frustrated and decide not to

shop at your store (or website) again. This is especially true when

customers are paying a personal shopper or delivery fee for the

service. If their order is only partially completed, they may have

to pay for follow-up orders to get their items.

A good prescriptive analytics solution combats phantom

inventory by flagging popular items whose sales drop despite (1)

the store showing inventory on hand, (2) historically higher sales

for the item and (3) other stores showing normal sales for the

item. It then alerts an associate to investigate and correct any

potential issue. This is a very effective way to:

• Combat phantom inventory at the source

• Provide visibility into execution

• Ensure compliance

• Provide on the job training

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Success during the holiday season depends on stores functioning like

well-oiled machines. Shelves need to stay stocked, signage needs to be

accurate and prominent, and promotions need to be highly visible and

properly marked. If any of these aren’t completed correctly, customers

will likely be confused and frustrated, unable to purchase what they

would like.

With real-time task management, you can ensure that all of the

tasks relating to promotions, stocking shelves, and other critical

projects are intelligently routed to the right employee, with pre-set

prioritization levels ensuring that the right employees are working

on the right tasks at the right time. Store managers have real-

time visibility into task status and completion rates, giving them

the ability to manage by exception, focusing their attention on

specific problem areas in order to ensure the most impactful

tasks are completed on schedule.

By pinpointing which employees are struggling to complete

high-priority tasks, these solutions also make it easier to

coach seasonal employees who may be struggling to

accomplish their tasks on time. Store managers can look

specifically at which tasks an employee may be struggling

with and personalize their approach to ensure that

employees are utilized to the best of their ability.

Poorly Executed Promotions and Empty Shelves 6

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Mass Returns7

Across retail, consumers returned an estimated $428 billion in

merchandise last year. A great way to minimize your slice of that

pie is by staving off mass-return situations, especially those due

to quality issues. The holiday shopping season is prime time for

identifying and intervening before such issues can impact the

customer experience on a grand scale.

Why are the holidays a naturally high-risk time for mass returns? It’s

only human nature that the faster we work, the more mistakes we

make. This is often the case for manufacturers around the holiday

season. Desperate to fulfill their retail customers’ massive orders,

factory workers often find themselves working harder and longer

before the holiday shopping rush, increasing the likelihood of

mistakes that lead to quality issues. Needless to say, few scenarios

are quite as nightmarish as having your stores’ service desks flooded

with angry shoppers returning a defective or damaged product. To

stave off the risk of a mass return, you need to be able to identify

quality issues accurately – and fast.

Prescriptive analytics provides a solution. Many retailers have these

solutions configured to monitor return data across their stores. By

comparing each item’s return rate to historical averages, the solution

can easily recognize when returns are higher than expected and alert

the right associate to take corrective action, perhaps auditing the

given product and/or contacting the vendor for credit. This speeds

up response times significantly, empowering the retailer to resolve

any quality issues before they can drastically affect the customer

experience.

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To learn more about how to ensure success at your retail stores, reach out to us at reflexis.info@zebra.com.

A well-known fashion brand used prescriptive analytics to avoid a potentially disastrous

quality situation. The solution pinpointed a $300 jacket which had just been released

for the holiday season and was expected to be one of the retailer’s hottest-selling

products. Instead, customers appeared to be returning this product at a slightly

higher-than-average rate under the “Product Damaged” category. The software

solution sent the jacket’s merchandisers an alert to check the item for quality and

seek vendor credit as necessary.

A very slight vendor mistake turned out to be the culprit. In its haste to ship the

jackets on time, the manufacturer had accidentally attached garment labels that

said they were machine washable. In reality, the jackets were dry-clean-only due

to their delicate faux-fur lining. Thus, when customers tried to launder them at

home, the jackets emerged from their dryers badly damaged.

The only reason the jackets were not being returned en masse was because

many customers had bought them to give as gifts, and thus had not yet tried

to wash them. This surely would have been the case post-holiday had the

issue not been caught so quickly. Instead, the prescriptive analytics solution

alerted store managers to attach special dry-clean-only garment tags over

the jackets’ existing ones, saving the style. The manufacturer also issued

the retailer a large credit to cover its losses.

These are just a few of the horror stories we’ve seen in retail. The good

news is that Zebra’s leading software solutions are used by over 300

retailers across the globe to reduce risk of noncompliance, simplify

work at stores, and optimize labor spend.

About Reflexis Systems, Inc.

Reflexis, now part of Zebra Technologies, is the leading

provider of intelligent workforce management, execution

and communication solutions for multi-site organizations

in retail, food service, hospitality, and banking.

The Reflexis ONETM intelligent work platform is used by

our customers across the globe to simplify execution,

improve communication, and optimize labor decisions.

Today, over 275 leaders in retail, food service, hospitality,

and banking are leveraging Reflexis ONE to achieve

measurable improvements in customer engagement &

associate productivity and retention.

Contact Reflexis Systems, Inc.Email: reflexis.info@zebra.com

Web: http://reflexisinc.com/

Simplifystore operations.

Improvestore execution.

Optimizelabor spend.

The Reflexis cloud-based Real-Time Store Operations Platform helps retailers: