The relentless rise of online retailers has led to deep soul-searching among brick-and-mortar retailers to find ways to compete. The traditional methods of competing through convenience, assortment, and pricing are largely ineffective against online retailers who outperform brick-and-mortar retailers in these dimensions. The last arrow in the quiver is to use service as a way to distinguish themselves from online retailers. Yet, research suggests that retailers tend to view store associates as an expense to be controlled rather than as a medium to provide better service for customers.
Research: When Retail Workers Have Stable Schedules, Sales and Productivity Go Up
Practices such as lean staffing and unstable scheduling have flourished in the guise of enabling greater profits for retailers. In fact, studies have shown these practices have hidden costs. And a new experiment at Gap shows that offering workers more control over their schedules, and more regularity in when they’re working, has bottom-line benefits: sales in stores with more stable scheduling increased by 7%, an impressive number in an industry in which companies work hard to achieve increases of 1–2%. Moreover, labor productivity increased by 5%, in an industry where productivity grew by only 2.5% per year between 1987 and 2014. Researchers estimate that Gap earned $2.9 million as a result of more stable-scheduling during the 35 weeks the experiment was in the field, even though the experiment cost only about $31,000 to run.