ALEXANDRIA, Va.—Retailers are racing to adapt to a world where shopper behavior is morphing and competition for online sales is tough, reports the Wall Street Journal. At big retailers, such as Target and Walmart, management is staffing stores differently in an effort to meet new competitive challenges, attract workers and control payroll costs in the tightest labor market in decades.
Early data indicate that online shopping will 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 shopped in-store on Thanksgiving Day, when visits increased 2.3%, according to ShopperTrak.
E-commerce is expected to account for about $170 billion of the roughly $730 billion in total holiday spending this year, according to the National Retail Federation. Some chains 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 package.
Target retrained the bulk of its 300,000 year-round U.S. workers during the past year and says it now sources 80% of its online orders from stores, not warehouses. At one Target location in Brooklyn, about 80 workers handle internet orders, collect products from shelves or put items into boxes in the backroom for delivery. The Minneapolis-based retailer hopes to mold each employee 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, Target executives decided to revamp the staffing strategy, said John Mulligan, COO. Internal shopper surveys showed low scores for customers in need of assistance, he said. At the same time, Target wasn’t providing fast, consistent service when shoppers ordered online for home delivery or pickup in stores.
Under the new staffing system, more workers are responsible for the tasks needed to keep their departments well stocked and shoppers happy, including finding products in the backroom, stocking shelves, tracking inventory and answering shoppers’ questions. Target adopted hand-held devices to guide workers through the store more efficiently to gather or send out online orders, and more employees are re-stocking shelves during the day, not at night, so they can assist customers at the same time.
Target has announced it will increase the minimum hourly wage for store workers to $15 by next year. Labor spending has increased at a higher pace than sales each year since 2016, a spokesman said. Walmart also has asked more staff to stock goods during the day, though only in a minority of the retailer’s 4,700 U.S. stores, a spokesman said. The Bentonville, Arkansas, company uses stores to fulfill 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 a more popular and efficient use of labor hours that keeps workers in the store helping shoppers. Many retailers started unloading trucks of goods and stocking shelves at night more than 15 years ago, aiming to do that work quickly without shoppers in the way.