Focus on: Holiday Preparations

The retail industry once again is bracing for the fast-approaching holiday season, and this year promises to be as challenging as ever. By focusing on workforce management, retailers can ensure they have knowledgeable associates ready to close sales.

Recent studies, including the American Express Global Customer Service Barometer, show that quality customer service ranks as one of a retailer’s most important advantages in a challenging economy. So it’s not surprising that workforce management solutions are now regarded as critical to maximizing holiday performance.

According to “Enterprise Workforce Management: Redefining the Boundaries of Customer-Centric Retailing,” a study conducted by Miami-based Retail Systems Research, 76% of retail winners are turning to workforce management solutions to improve customer service. Meanwhile, 32% of retail winners are relying on the solutions to better address unpredictable consumer demand—something that will make or break the upcoming holiday season for many chains.

Like many retailers, The Bon-Ton Stores is currently ramping up its holiday staffing campaign, especially across its customer-facing associates—a vast segment that represents categories across general selling areas, including apparel, soft and hardlines within home decor categories, and others that do not require vendor-specific knowledge.

“To accommodate an increase in holiday shoppers, we grow this workforce between 20% and 25%, which increases our overall headcount by 40%,” explained Louise Kennard, director of staffing and scheduling, store operations, The Bon-Ton Stores, York, Pa., which operates 278 department stores under several nameplates.

The chain has learned that ramping up headcount is only half the battle. The past two holiday seasons have created cost-conscious, value-driven shoppers, many who are being lured into stores through promotions. Historically, this created a need for Bon-Ton to “hire up” at the last minute to accommodate this increased shopper volume. Now that the retailer has identified this issue, it can approach holiday hires from a more insightful perspective.

As early as May and June, the chain begins analyzing historical sales patterns that occur during specific weeks in November, and across specific stores in the chain. This data is then applied to Bon-Ton’s overall budgeting process.

“We calculate budgeted hours for this time frame, and that is how we create a fall season budgeting package for our seasonal hires,” Kennard said.

Seasonal help is recruited in early November, before the holiday season kicks in, she added.

“This provides more of a hiring-on-demand operation,” she said. “We are hiring closer to the holiday season, which keeps us from over-hiring and cuts down on the rapid turnover that tends to happen.”

Bon-Ton uses the extra couple of weeks to get new hires trained, and their knowledge levels up to snuff so they can start creating holiday shift schedules. The chain creates these schedules through the workforce management (WFM) solution, from SAP America, Newtown Square, Pa. The solution works very closely with the retailer’s sales planning operation.

Using metrics that measure historical customer traffic and transactions, the chain is able to build business plans.

“It gives us an advantage to learn which store, and which specific areas within each store, can expect sales lifts on 15-minute intervals,” Kennard said. “We are leveraging technology to understand demand and aligning available workforce among our seasonal hires to be available when we need them.”

While the solution has been in place for approximately a decade, Bon-Ton transitioned to SAP’s Web-based version in 2008. The previous generation of the solution was distributed to stores via in-store servers, and then data was consolidated at the corporate office.

The Web-based solution however, is centralized on a corporate server and accessed by store managers via a Web portal. The nimble, Web-based solution allows the chain to monitor schedules in real time and revise plans at a moment’s notice. Its consolidated configuration is more cost-effective since it is not rolled out and housed at each individual store. (Bon-Ton recently completed the rollout of the newest version of the solution to all stores.)

The chain also gains efficiencies by creating schedules during lower network traffic levels. Schedules are created and saved to a batch mode and transmitted for view on Sunday evenings, once stores are closed. “The practice keeps managers from being stuck in the office creating a schedule when they should be on the floor helping people,” she explained. “It also eliminates the need for data to compete for space on the network during the busiest time frames.”

The chain also relies on the solution’s analytics tool to conduct compliance reporting. WFM is integrated within the chain’s time clock and time management system, keeping Bon-Ton in tune with mandated labor issues, including whether associates are keeping their scheduled hours and overtime, and utilizing the time clock correctly.

“It allows us to monitor compliance all the way through payroll,” Kennard said. “It improves efficiency and keeps us on track with scheduling only associates that match demand.”

According to SAP, the solution can reduce management’s administrative activities by 10%. By placing more qualified, effective recruits in the proper positions, Bon-Ton can also reduce store-level turnover rates between 1% and 2%.