A Blog by Jonathan Low


Dec 7, 2019

Retailers Adjust Strategy, Staffing To Meet Customers' Switch To Online Buying

Retailers have adapted to online shopping by investing in retraining their workforces and changing the way their stores are organized to encourage consumers to use them to pick up digital orders.

And customers are noticing. JL

Sarah Nassauer reports in the Wall Street Journal:

Foot traffic to U.S. stores fell 6.2% on Black Friday, as more people ordered online. Target, Walmart and other retailers are staffing stores differently to meet new competitive challenges, as well as attract workers and control payroll costs amid the tightest labor market in decades. Daytime stocking is becoming more popular, efficient use of labor that keeps workers in the store helping shoppers Some chains, adapting to the shift to online shopping, use their stores to handle deliveries or shoppers to pick up orders rather than wait for an Amazon package.Target says it sources 80% of its online orders from stores, not warehouses.
On Black Friday morning at a Target TGT 0.28% store in Brooklyn, stacks of televisions, microwaves and toys awaited the rush of shoppers looking for holiday deals.
Hours after the store opened, it was calm. The piles stood tall.
More frantic were the Target workers pushing carts through aisles to collect products ordered online by shoppers for home delivery or for pickup at a desk near the front of the store.
Early data show that online shopping will once again account for a larger percentage of total holiday sales compared with previous years. Foot traffic to U.S. stores fell about 6.2% on Black Friday, as more people ordered online or went to stores on Thanksgiving Day, when visits increased 2.3%, according to ShopperTrak, which uses cameras to count traffic in a range of U.S. stores.
“For this to be a Black Friday and it to be this calm in store, it says a lot about the role of technology today,” said Daniel Murreld, a 29-year-old employee at the Brooklyn store who has worked in retail much of the past decade.
Retailers are trying to adapt to a world where shopper behavior is changing and competition for online spending is fierce. Target Corp., Walmart Inc. WMT 0.94% and other retailers are staffing stores differently in an effort to meet new competitive challenges, as well as attract workers and control payroll costs amid the tightest labor market in decades.
Online sales reached $7.4 billion on Black Friday, up from $6.2 billion last year, according to Adobe Analytics, which tracks hundreds of retail websites. E-commerce is expected to account for about $170 billion of the roughly $730 billion in total holiday spending this year, according to National Retail Federation estimates.
Some chains, including Target, Walmart and Best Buy Co. , have posted strong sales in recent years by adapting to the shift to online shopping. They use their stores to handle deliveries or convince shoppers to pick up orders rather than wait for an Amazon.com Inc. package.
Target says it now sources 80% of its online orders from stores, not warehouses. At the Brooklyn store around 80 workers handle internet orders, collecting products from shelves or putting items into boxes in the backroom for delivery.
Target retrained the bulk of its 300,000 year-round U.S. workers over the past year, giving them new titles and responsibilities. The Minneapolis, Minn.-based retailer hopes to mold each into an expert for a specific area of the store such as the beauty department, toys or online fulfillment to offer better customer service and use labor spending more efficiently.
“I’ve been with Target for 22 years and this is the largest [staffing] change I’ve been a part of,” said Ashley Petzold, senior group vice president of stores. “As the retail environment has been shifting, I think we realized we needed to change as well.”After poor sales in 2017 prompted a new plan to invest in stores, Target executives also decided to revamp the staffing strategy, Chief Operating Officer John Mulligan said in an interview. Internal shopper surveys showed low scores for customers in need of assistance, Mr. Mulligan said.
At the same time, Target wasn’t providing fast, consistent service when shoppers ordered online for home delivery or pickup in stores, he said.
Under the new staffing system, more workers are responsible for the full chain of tasks needed to keep their department well stocked and shoppers happy, including finding products in the backroom and stocking shelves, tracking inventory and answering shoppers’ questions.
Target added technology on hand-held devices to guide workers through the store more efficiently to gather or send out online orders. And more workers are putting products on shelves during the day, not at night, to be able to help customers at the same time.
Target has also promised to raise the minimum hourly wage it pays store workers to $15 by next year. Labor spending has increased at a higher pace than sales each year since 2016, said a spokesman.
Walmart, the country’s largest retailer by revenue, has also asked more staff to stock goods during the day in recent years, though only in a minority of the retailer’s 4,700 U.S. stores, said a spokesman. The Bentonville, Ark., company uses stores to fulfill its online grocery orders, and is increasingly relying on stores for other types of e-commerce orders, although most are shipped from dedicated warehouses.
As retail wages rise, daytime stocking is becoming more popular as a more efficient use of labor hours that keeps workers in the store helping shoppers, said Craig Rowley, a senior human resources consultant at Korn Ferry, a consulting firm. Many retailers started unloading trucks of goods and stocking shelves at night over 15 years ago, aiming to do that work fast without shoppers in the way, said Mr. Rowley.
“It’s like running a little business now,” said Kevin Lopez, a 21-year-old sales associate responsible for the toy department at a Target in Queens, N.Y. Ahead of the release of the “Frozen 2” movie in November, Mr. Lopez asked his store manager for extra space to stock toys related to the movie, trying to grab more sales. “I feel like I’m more in control of my department,” he said.
Some workers have found the change overwhelming. “They want every employee to be doing everything and so it’s making it so nothing gets fully done,” said a 21-year-old staffer in a Texas Target. Others complained to managers when the new system made their existing work shift unavailable.
“Change is hard, even the fact that we made the change over a period of several years,” said Mr. Mulligan. Target made sure each store worker had a conversation with a superior about the new system, he said.
Target is increasing market share in beauty and other areas where it now has more dedicated staff trained to give product advice. In 250 stores that tested the new employee structure last year, sales increased faster than the chainwide average, said a spokesman.
“I think the biggest change is the introduction of online and digital retail into stores,” said Ms. Petzold, the Target executive.
The new staffing system will be stress-tested amid the holiday shopping rush for the first time this year. On Black Friday morning, at the Target store in Brooklyn, a line of shoppers waited to pick up online orders at the front of the store.
A family considered buying a microwave offered at a discount, but one of the younger members of the group chimed in, “No. Let’s order it online.”


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