Tens of millions of square feet of retail space has gone dark this year but now retailers are facing another crisis: too few salespeople.
Many of the nation’s biggest store-chains have been cutting staff at an even faster pace than they have been closing stores, leaving remaining locations with longer checkout lines and increasingly frustrated customers.
The phenomenon is having an effect on the bottom line.
Over the past year, 86% of U.S. consumers say they have left a store because of long lines according to surveys. That store abandonment cost retailers $37.7 billion in lost sales it’s estimated.
Retailers have been trimming staff for nearly a decade due to smaller stores that require fewer salespersons and added self-checkout technology that makes cashiers, for example, unnecessary. At clothing stores the number of cashiers has decreased more than 50% since 2007.
Many firms have also hired more full-time workers, taking the place of two or three part-time workers. But retailers seem to have reached a tipping point and the trend now may be reversing.
Kroger, Dick’s Sporting Goods and Macy’s all plan to increase staffing levels this year. “If there’s one thing that drives me nuts, it’s waiting at the register,” Dick’s CEO Edward Stack told The Wall Street Journal.
Retail staffing hasn’t kept up with growing population demand statistics show. The number of customers served by the average retail location has grown 12.5% in the past decade while the number of staff persons at those locations grew by only 1.5%, highlighting a problem in staffing formulas.
Most retailers peg staffing levels to sales. But growing research suggests it should be based on store traffic – the number of shoppers that enter a location daily. Many retailers don’t track store traffic however, and the ones that do are reluctant to add staff because of cost. The result is floor staff that’s stretched thin.
So bad is the problem, in fact, that the Retail, Wholesale and Department Store Union added a provision in its latest contract that salespersons have the right to drop all responsibilities in order to take care of customers first if a situation warrants.
“If brick-and-mortar retailers can’t compete on price in an online environment, the only thing that allows them to survive is to provide a positive in-store experience,” Union President Stuart Appelbaum said.