A Butterfly Flaps It’s Wings And…

And now, a peak behind the curtain at what’s going on in retail:

The biggest “controllable” expense in retail is often the employees who work in the stores. You “control” that expense by how you schedule those employees.

Much of retail scheduling is predictable: at the most basic level, you know you need to have at least one employee on duty during every hour the store is open; and you can make a reasonable prediction how many employees you need in each area based on a combination of historical transactions per period, labor standards, and year-over-year trend data.

Some scheduling factors are unpredictable: the weather impacts customer traffic (rainy days at the beach send customers to malls); and, unfortunately, the volume of ad-hoc work assigned by the home office is still not predictable or controllable.

One of the hidden schedule impacts in the last 10 years has been what is happening in the trucking industry. Traditionally, truckers liked being truckers because they earned big money, racking up overtime. But all that OT made them tired and unsafe drivers. So, after an increasing number of high-profile accidents a few years ago, the federal government passed regulations that ended unsafe overtime. And truckers left trucking in record numbers and carriers went out of business.

And retail delivery windows became unpredictable.

A store manager used to know that 100 boxes, for example, would arrive between 10 am and 12 pm and could schedule accordingly. Now, she may receive 100 boxes – or maybe it’s 300 because the driver couldn’t get to her yesterday – or maybe none because they can’t get to her today. The truck could show up at 7 am or noon or 3 pm.

You can see how that would impact the store manager’s ability to schedule people to unpack those boxes: you have people scheduled and the truck doesn’t show up – now you have to find other things for those people to do and, more importantly, they won’t be available when the truck actually does arrive; OR the truck arrives when you don’t have people scheduled to unpack the boxes and you have to pull people from customer-facing work to count the boxes, sign for the delivery, and either unpack the boxes or stage the boxes to be unpacked later (if you have space in the stock room for all those boxes, which many retailers don’t).

And now there’s this.

Walmart has their own distribution center and their own truckers. This news, while good news for truckers, means that the pool of drivers outside Walmart will become even smaller, as drivers join the Walmart team.

And retail scheduling becomes even less predictable.

You can’t blame Walmart for doing what they need to do to compete. But it does make it more challenging for the rest of retail, who can’t afford to have their own trucks or pay their carriers more.

Including retailers who don’t directly compete with Walmart for customers.

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