Times For Retailers May Be Tough, But That’s No Excuse For Cutting Staff

There’s no question that Kiwi retailers are struggling with reports that almost half did not achieve their sales targets in the first quarter of 2023, and while some may be pondering cutting staff—if they haven’t already—but that would be a mistake.

Mark Presnell, the CEO of Convergence, a specialist in eCommerce integration, is urging employers to avoid going down the same old path of cutting people loose because such cost-cutting tactics are a thing of the past. Retailers have so many more options today.

“The astute use of online retailing technology will reduce the need for staff doing repetitive low return tasks and, by making those positions redundant, those same staff can be employed in areas that create value for the business.

For example, one brick-and-mortar store in Invercargill integrated its eCommerce website with its business software. This freed up people who were employed full-time (to update products and pricing on the website) to shift to more valuable roles. The company is now selling more shoes online than through its store.

“Take the staff that are freed up, or redundant, as a result of automation and employ them in areas such as customer service. For example, they could be employed to follow up with customers by phone, which puts the personal touch back into retail.”

Other activities that would add value to the business and help it thrive in challenging times include quick and efficient issue resolutions, a seamless returns process and better personalisation with a real focus on tracking customer preferences and purchase history. Doing this enables the retailer to offer customers personalised recommendations and targeted promotions.

“When you integrate your eCommerce website with your business software—and less than half of New Zealand retailers do this—you reduce manual, low-value labour updating inventory levels, order processing and the like. With real-time inventory management and synchronisation, you can optimise stock levels and reduce inventory costs,” Presnell says.

Automated order fulfilment, elimination of duplication and improved analytics for real-time can cut costs by as much as 30%. According to global management consulting firm McKinsey & Company, fulfilment costs alone account for 11- to 20% of eCommerce revenues.

“With such savings, there is no need to cut staff. Put them to work productively growing the business. Turn adversity into opportunity.”

Presnell provides three tips for how retailers may cut costs, free up staff and add value:

1. Streamline Workflow Processes:

By integrating the eCommerce site with business software, retailers can automate workflows, order management processes, inventory tracking, and fulfilment to reduce errors and eliminate manual intervention. This allows existing staff to focus on more strategic tasks rather than repetitive manual work.

2. Create clear process definitions: Once a process is clearly defined and proven successful, the opportunity to automate it comes into play.

3. Improve Customer Service: Integration can enhance customer service without increasing staff numbers or cutting staff.

“Customer data gives retailers a comprehensive view of customer interactions, enabling personalised customer service and tailored recommendations--satisfied customers are loyal customers,” Presnell says.

In 2023 there isn’t any excuse for the staff-cutting tactics of the last century. Instead, use technology to add value and grow through tough times.

For more information, visit https://convergence.co.nz/

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