Productivity Pulse Future Ready Retail Benchmarking Report SPECIAL

Welcome to the Productivity Podcast. This is a special edition of the Productivity Pulse, and I am joined as ever by Sue and James. Hi both. So special edition because we are delighted to introduce our first rethink productivity future retail ready benchmarking report.

Headline is can retailers really afford to ignore a 6.25 billion pound opportunity. So a big number, details in the report, how we get there. And we're going to take you through today really top line our six golden rules to maximize store performance that come out of the data.

I'll talk a bit about why we did it and then we'll work through those rules with Sue and James. So with the work we do, we're extremely conscious that most retailers, hospitality companies have done all the easy stuff. It's been really tricky with all the kind of headwinds of national living wage that have come through. There's the new employee rights that's in place, and clearly there's lots of cost pressure around from the war and global uncertainty that impact everything from energy through to property and so on.

So it's a really tricky time to operate and has been. And most people organisations have responded by tightening their labour models, reducing perceived waste and driving leaner store operations, which on the surface is perceived to be success. And maybe it is, maybe it isn't, but we'll we'll get into the detail of what that looks like. But before we go through the golden rules with Sue and James, I just want to talk about 80 being the magic number.

So at Rethink, as I'm sure you know, if you listen to these podcasts and you've interacted with any of us, we do lots of productivity measurement. Every measure we take on every project for every client provides an indication of how busy the store team is. We take the time that the teams spend on what we call value-adding activities, so being with customers and essential tasks, and we multiply that by the pace of work at which the team are performing at. That used to be a former British standard.

We're upholding that, and it's something that our team get trained on on a yearly basis, so they make that judgment. 100 swift and business like ideal classes pace that can be carried out for full shift. Pace lower than 100 creates a productivity opportunity, more than 100 leads to burnout. However, if our efficiency index was to equal a hundred, it kind of means that the team are working on value add or essential tasks for 100% of their time at an optimal pace, but they wouldn't be getting breaks, there'd be no chatting, it wouldn't be a particularly funny environment, and it's not really realistic.

So 80% is our magic number for efficiency index, should mean that work's getting done the right way, the right pace, but actually, it's also a good place to work for your colleagues who are going to deliver clearly the service for our customers. So six golden rules for maximizing store performance. Number one, and Sue's going to take us through this, is rethinking efficiency. So this one follows on from what you just said, Simon, about the efficiency index and being at 80 is the ideal.

With all our data, we've been able to see that over the last five years in particular, there's been a trend where the efficiency index, the average efficiency index for a retailer has has increased. And now kind of about two-thirds of the stores that we'll see are are over that 80. Now, being over 80, it creates a risk of the store becoming overloaded. Because if you like, stores have often operated with a bit of a cushion.

So, and those of us that have worked in stores will know that at Christmas everybody gets you manage to do a bit more, or you know, you have a busy bank holiday weekend or something, and you manage to do more than you've ever done with the same amount of people. But actually, when you're at seed regularly over 80, that cushion has kind of disappeared and it's not there. And it means that unless you're incredible at how you're balancing when your team are in, there's a real risk at these peak times when the most customers see you, that actually you're overloaded, you're perhaps not delivering the experience that you wanted.

And it can not just be unexpected peaks of customers, which do happen regularly all the time. It can be things like a late delivery that doesn't arrive when your team are ready and there for it. It can be things like tech failures. So all those things that kind of do can and do go wrong in in the real world of retail, it means that there's a real risk that you become overloaded, the team can become stressed in that situation, and they certainly don't have enough customers.

So it's having that real balance. And that plays through in the in the numbers, I assume, in terms of sales, etc. Well, that's the that's the risk. So there's a risk that kind of this over focus on cost reduction and running things too tight can damage sales.

And we're terming that the productivity paradox. So on paper, it can look like you've tightened it and it all looks good. In reality, there could be a risk that what you're doing is impacting your sales at people. So that moves us nicely into rule number two, which is managing capacity intelligently.

So this is absolutely about making sure that that you are ready for those peaks so that you you have got the capacity when you need it. Um there's lots of help with forecasting these days. But what we're saying is about the the winning retailers in the future will be able to model those demand patterns accurately, they'll really understand what the peak requirements are and make sure they're investing in capacity to deliver that. Because there is this risk that when you're having to match your peak quite closely, if your say setup's done with legacy contracts and you've got lots of full-timers, when actually what you need is to be able to cope with a peak in the middle, it's it's how you cope with that.

Perfect. And James, rule number three, simplified security. Thank you. Yeah, I I think it's really exciting to have been involved in pulling this report together.

Obviously, we've got lots of data across lots of retailers across many years. And one of the things that we've been able to do is look at how long it takes stores to add security tags and uh bottle locks and stuff like that to products and how long it takes to remove it at the till. And one of the things that we've observed over the last couple of years when theft is getting worse is that security should safeguard your operations and productivity. Unfortunately, what we see is it often quietly erodes it.

So in one supermarket, we saw it as taking more than 15 seconds to add soft security tabs to every item. So that's 15 seconds per item, and then about 12 seconds to add bottle locks. These types of hours are rarely factored into the saving. And in some scenarios, the cost of security tagging everything was was actually quietly eroding profitability rather than adding to it.

And so what we what we are saying from this data is that the retailers that figure out how to simplify security either do it quickly or figure out how to intelligently target what to tag actually are are going to be set up to succeed better than those that kind of just apply it in a blanket way. And understanding the consequence of those decisions, because it it's easier to just tag more stuff or lock more stuff up, I assume. Yeah, that's that's right. And it's you know, the measurement is key here because it's you know it's it's the time that it takes to do those things and the impact it has on the customer experience as well, that is easily hidden by the by the numbers.

Perfect. And you're gonna take us into rule number four, which is unlocking self-checkout potential. Yeah, I mean, uh amazingly many retailers we work with have self-checkouts in their stores and staff will put offers in front of them and not turn them on so that customers can't use them. We also see a range of interventions occurring at self-checkouts simply because of how they've been configured rather than being thought through.

They've just been configured badly. This adds time to this adds time to the customer journey and dissatisfies customers, and even more importantly, creates a huge number of interventions that staff have to take part in. Um really the the key here is uh switching on to a missed opportunity. So we know that self-checkouts can add speed and simplification and satisfaction to transactions, but when they're done poorly, it simply shifts workload to the till.

So we're really encouraging the future ready retailers to examine their setup and make sure they're getting the most out of it. And James, rule number five is around designing services deliberately. Yeah, I think you know, in my customer experience days, we always used to talk about start with the end in mind. And I think this is similar to your self-checkout installations.

Again, going across our considerable database, we find huge amounts of time added to transactions, trying to get people to sign up to loyalty programs, trying to administer those loyalty programs. These things need to be implemented with the end in mind, what you're actually trying to achieve. And adding a minute onto a transaction after somebody's already decided to purchase is really not a good use of your or their time. And there are a range of services like retail has never been more complicated.

We've got loyalty cards, we've got order at home and collect-in-store, we've got parcel collection and drop-off, we've got third-party delivery apps. All of these complexities are added on to a store's workload, chasing a profit, but without really thinking about how it's going to impact. And so what we're asking future ready retailers to do is to think about how these services are designed in order to unlock the value within them rather than just add lots of extra task onto the onto the store teams.

Yeah, so I mean it's like we want these services to attract customers and build revenue, uh, not overwhelm the store teams. Perfect. And the the final rule is around deploying technology pragmatically. So prioritize those foundational tools.

So things like electronic shelf edge labels, eliminate hours of manual work, and the most disliked kind of tasks from store teams changing paper labels, done ad hoc. Clearly, there's a big environmental piece. That's a great example. Avoid tech and data for data's sake.

So great example is people get really excited about AI weather forecasting. That's only useful if you can react to it as a retailer. So if you have that flexibility in your workforce, if you're producing schedules three, four weeks in advance, actually, it gives you really, really limited benefit. Align tech with the operation.

So are you solving and have clear understanding of the pain points, or actually is it is it tech that's looking for answers and solutions? Technology can be used to amplify. So things like Pictolite for digital labels can again build on maybe tech that's already there and in place and enhance that with human capability. And look at the pragmatic ROI.

So ensure that colleagues are trained effectively, that it's an engaged process rather than it's a numbers-led process of this tech will deliver XYZ saving and that comes out of the Labour budget. So being really pragmatic with that technology deployment is going to be crucial. Sue will kind of come to you for some closing remarks. That those are the six golden rules, the report.

We will put a link in the show notes to download it, and it is available from the website as well. If you don't want to read the show notes, so rethinkproductivity.co.uk.

You've been instrumental in pulling this together. Have you got any closing thoughts for the listeners? It's interesting, and as much as I think the people who really work closely in productivity, none of this will be a big surprise. It's a real challenge as you know things get tighter to make sure that other departments and other parts of your organization really understand where your business is at.

So I think there's there's two things too. One is have the report might be really useful in helping engage other parts of the operation to understand, you know, kind of what they're asking of you and what the impacts of what they're asking for. I remember from, you know, night eye looking after models and things, there was always somebody you can asking you to just always squeeze in something extra. And I think those days are kind of tricky for most retailers.

And the other is a plea for more work for us, I guess, in as much as because things are much tighter and more complex at the same time, having real data and evidence to base decisions on is really important. There's not enough flex in the system to be able to kind of make gut field judgments. So actually it's where data really is your friend to help you make those decisions. So maybe the the two thin blanks for it.

Perfect. James, any closing remarks? Just how valuable it is to have the data, Rodeka, what Sue said, right? Having we looked at all of our data since since the pandemic.

Well, since since the end of lockdown to pull this report together, come up with some startling numbers in terms of how long these things take that people may not have thought of before. So do download it, have a look, get in touch if you have any questions about the data. Perfect. Thanks, James.

And I'll I'll leave you with where we started. So starting with the end in mind, it's a 6.25 billion pound problem across retail that could be unlocked using the same labor. So download the report, have a read, get in touch with any questions.

And James, Sue, and I will be back with the next Productivity Pulse episode. Soon. Thanks both.