Retail, hospitality, and food service businesses have changed radically in recent years, growing in complexity in multiple, interacting ways. McKinsey estimates that investment will be needed across Europe over the next eight years to the tune of €135-335 billion on sustainability, €155-230 billion on digital transformation, and €25-35 billion on skills and talent. In the UK, with interest rates at 4.5%, unmatched at any time in the past 14 years, and inflation persisting at over 10%. Businesses must continually innovate to find ways to do more with less.
In this blog, we’ll explore three areas of complexity retail, hospitality and food service businesses are encountering and how they can successfully and advantageously navigate them.
New formats and channels
Traditionally, grocery businesses revolved around physical, real-world interactions. Consumers visited stores, selected goods, and paid at the till. Today, large retailers run sophisticated online shopping operations, blended digital/physical rewards schemes, delivery, other services, and more. No longer just retail businesses, they are now also logistics, e-commerce, services, and digital marketing and communications operations.
Underway for many years, these shifts were accelerated by the pandemic, when many employees left and didn’t return. Others have exploited the gig economy to move to alternative roles, some mixing and matching various part-time roles with multiple employers, often across sectors. Meanwhile, some employees work on the shop floor, others in the office, and others in the field in diverse roles – web developers, store employees, and delivery and logistics specialists.
The result is mounting demand from the workforce for greater flexibility in their work and where, when, how and with whom they do it. Technology offers businesses various ways to respond.
AI-powered forecasting and scheduling can be powerful aids in building staffing rosters that consider workers’ preferences concerning working times and locations. Such technologies can also enable quicker, more effective forecasting and planning, for example, projecting future workforce requirements about expected demand and operating conditions.
Today’s workforce management tools can also facilitate what-if scenario creation, helping businesses adapt nimbly to rapidly changing circumstances, such as shifting from in-store staff to delivery staff when online demand grows about store footfall.
Mounting expectations and costs
Consumers’ expectations are higher than ever, but they still expect keen pricing. It is the result, in part, of retailers’ innovative responses to the competitive market, which have further driven consumer expectations of more for less. Combined with tight retail margins and today’s inflationary environment, this makes for a challenging cocktail.
Yet more innovation is the answer across all channels – online, through apps, social media, in-store, delivery agents, and services. This means increased investment, but higher costs cannot be passed on to customers without blunting the competitive edge.
How can retail, hospitality and food service businesses square this apparent circle?
Improving employee experience is necessary – across the business, as employee experience improves, so will customer experience. One approach to improving the employee experience is to meet workers’ life-work needs, for example, by giving them greater control over shift scheduling. Able to work more on their terms, when they want, where they want, and with their preferred colleagues and customers, workers will be happier, more productive, and more loyal.
Improving employee engagement is key to improving employee experience. Mobile communications tools and AI-based decision-making support further enable workers to make real decisions about their working lives while strengthening businesses’ ability to deploy necessary resources and cutting managers’ and workers’ administrative burdens.
Such tools can also help connect workers and management meaningfully and facilitate employee engagement and recognition programs such as pulse surveys and awards.
Digital transformation
Key among customers’ and employees’ growing expectations is the desire for ever-improving digital experiences. This presents both a challenge – how to deliver such experiences – and an opportunity – digital tools can be powerful allies in addressing business complexity.
AI-powered tools such as shift rosters can accelerate and improve decision-making and planning. Smartphone tools can provide accessible, secure communication channels between workers and management. And with mobile apps such as UKG Talk, employers can show appreciation to employees with rewards and achievement announcements, which workers can share with their professional and personal networks via social media.
Self-service digital tools allow employees to access the information they need, when and where they need it, without multiple emails to HR. This saves HR time and effort, reducing frustration and costs and streamlining the process for employees, improving productivity and minimising wasted time.
With appropriate digital tools, workers can quickly request additional shifts, shift swaps and time off and communicate where, when and with whom they prefer to work. AI-powered decision-making support assists managers in responding swiftly and appropriately to such requests.
Meanwhile, digital tools simplify data collection across the business. With rich data, analytics can help identify and quantify performance gaps, compliance issues, and avoidable expenses such as unnecessary overtime and unused capacity. This supports strategic and tactical decision-making to improve productivity and efficiency, reduce risk, and enhance employee and customer experiences.
Automation and careful adoption of digital technologies are essential to today’s retail, hospitality, and food service businesses as they tackle relentlessly increasing complexity in their operations.
Read UKG’s latest eBook, ‘Four Steps Blueprint for Retail Success – Innovating People Operations’, to learn best practices and more.
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