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How LMS drives labor cost savings across the store network

From DCs to store oulets, retailers are feeling the pressures of maintaining the high service levels that today's consumers expect. Customers want the option to order and receive products from any channel available - whether that means same-day shipping from an online order, buying online and picking up in store (BOPIS), or a traditional in-store purchase. Regardless of how they order products from their preferred retailers, customers expect a seamless shopping experience. This omnichannel retailing model results in increased complexity, more labor touch points and a much greater potential for inefficiency across a retailer's workforce. 

In our sixth On The Move webinar, titled "Driving labor cost savings across the store network," I discussed the key role that labor management software (LMS) plays in addressing these retailer challenges and meeting customers' expectations. As I explained in the webinar, the retail store is not only here to stay, but many retailers are reevaulating its importance in the omnichannel order fulfillment process and seeking to leverage its full potential by treating each store as a mini distribution center.

Without the necessary process controls and visibility that LMS provides at the store level, retailers run the risk of driving up labor costs and cutting into their profit margins. The focus of my webinar was to explore ways retailers can deploy LMS to drive incremental labor efficiency improvements in their stores - resulting in significant savings across their larger store network. To demonstrate this concept, I touched on the key areas where LMS can make an impact:

  • Customer experience: better match workforce competencies to tasks at hand and keep the customer-facing personnel on the floor
  • Inventory visibility: confirm availability of items on hand and locate them quickly
  • Service levels: become predictable in process execution and win the service level war by delighting customers and earning their loyalty
  • Order picking: improve visibility to BOPIS orders and evaluate individual performances
  • Replenishment: take the guesswork out of how many resources are needed to receive and stage products
  • Order packing: help make the transition to shipping from stores to regional customers
  • Returns: determine how long a return takes to process and establish productivity targets

Ultimately, the objective of an LMS in the retail store is to identify the most productive ways to perform all of these tasks and make them repeatable. In doing so, stores are able to establish a degree of predictability in their processes that enables them to more accurately plan for labor requirements. Many times, supervisors will overstaff during peak periods by as much as 25 percent. If you consider the impact of eliminating that 25 percent increase across the network of stores, than the labor savings can quickly add up. 

Along those same lines, I also explained how LMS gives stores the ability to adapt and alter plans as priorities change. Omnichannel retailing and consumer demand can be unpredictable. A weather event may clear out a whole section of a retail store, while a rush in online orders creates a completely different order fulfillment cadence. LMS gives stores the agility and visibility to inventory and resources to adapt their plan to the priorities of the day.

To view this On The Move webinar in its entirety or revisit key sections, please vist the archives section of our website. If you have any questions about the important role of LMS in omnichannel retailing, please feel free to contact me directly.