Retail productivity - finding a way through the myths and misunderstandings

25 April 2018

By Lorna Ward, Retail Partner at PwC

“We’re working to improve our productivity” is a phrase I hear often from retailers, but the subject is often misunderstood, shrouded by mystery and packed full of myths. What does this actually mean? It’s hard to know where to start and how to create tangible and sustainable benefits.

Most retailers already have some form of continuous improvement programmes running throughout their business but now is the time to radically review not only the obvious element of numbers of staff, but also what you are asking them to do with the precious labour hours available and, ultimately, what you do with the time or the cash released.

You only have to pick up a newspaper to see just how tough life is for retailers at the moment. National living wage, business rates and Brexit are just some of the pressures contributing to an increased cost line in an economy where top-line revenue growth is hard to come by. Improving retail productivity then seems like a valuable exercise to help the business thrive rather than survive.

The commonly held myth that reviewing productivity is about saving money is not always true. In fact, the best results are often achieved when labour capacity is deployed elsewhere. This gives you a choice: Either take the savings onto your bottom line or re-invest the labour into revenue generating activities, better customer experiences or a combination of all three. This combination can often provide you with a more sustainable competitive edge and help you become fit for growth.

The mantra needs to be – run back of house activities in Head Office and in store like a well oiled, highly efficient factory production line. Run front of house to deliver a tailored and personalised shopping experience – for grocery retailers this will be easy to find products, well stocked shelves, and swift payment processes - for apparel retailers this will be well educated and engaged store colleagues, delivering a personalised brand experience to make shoppers feel special.

The big question is though, is how do you do this?

This requires a belt and braces review of all the activities you ask of your teams. Really challenge yourself what non-value added activities could be stopped? Which could be automated using the latest available technology? And the often forgotten and often most powerful - which activities should you should start doing? Also focus on when these activities need to be done during the working day and by whom – we often find that management hours are being spent on non-management tasks.

An engaged workforce will also aid productivity - it’s well documented that the more you feel engaged, the better your productivity. Once again, digital technology - including gamification - can help here.

But keep in mind that what is right today will not be right tomorrow. Retail and technology is moving at a very fast pace, so your labour model needs to be agile enough to adapt quickly to ensure your teams remain the most productive and customer-focussed as possible.

This is just the tip of the iceberg. Join us for our webinar on May 2nd to hear from BRC and PwC experts on the topic, as well as a powerful case study from the Central England Co-operative. Click here to register now.

Lorna Ward
Retail Partner at PwC

Tel: +44 (0) 7718 340121
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