Wave after disruptive wave of change is washing over the Retail industry. Though E-Commerce is having a large impact on traditional brick and mortar Retail, workforce changes and cost models are about to land the largest change in decades on the Retail world. Rapid, targeted changes in your onboarding and training strategies will substantially reduce the pain.
State and local governments across the country are introducing rapid increases in local minimum wage laws. Let’s consider the profitability impact of time devoted to non-selling activities in a typical apparel retailer.
For comparative purposes, let’s assume that an hour of labor expense with a wage cost of $8/hour correlates to $250 of revenue, and a net profit of $12.50. Using a factor of 15% per hour for non-selling activities (stocking, merchandising, training, etc.) produces an embedded cost of $1.20 per labor hour expended.
The impact of that non-selling expense explodes when you double the minimum wage cost and may eliminate your profit.
The Bureau of Labor Standards indicates that during “Selected Time Periods From 1987 to 2014, productivity increased at an average annual rate of 2.8 percent in the retail trade. Unit labor costs were unchanged in retail trade from 1987 to 2014.”
We’ve spent the last 18 months conducting workshops and interviews with our clients and industry experts across the country. Our research lead us to build a new software as a service product that our clients tell us will increase productivity and streamline training for your employees, on the floor on any device available, when they need it, without the cost, delays and headaches of an LMS platform.
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