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Stores without staff: A ‘great retail reset’ is coming, report says

LA Daily News logo LA Daily News 1/21/2022 Kevin Smith, Los Angeles Daily News

As the nation eases further into 2022, retailers face a host of challenges.

Empty shelves, surging inflation, shifting consumer habits, mob-driven store thefts and an ongoing labor shortage are just some of the issues.

A new report from Deloitte says those myriad factors are setting the stage for a “great retail reset” that will propel businesses into a more stable and profitable position.

But it’s going to take some work.

The report desribes three pillars of the reset:

A reimagined workforce: 83% percent of retailers surveyed said their biggest investment will be recruiting new employees and retaining them. Deloitte says companies should invest in technology and automation to compete with more tech-savvy industries, while also offering greater work flexibility to attract talent.

A shifting supply chain: In light of supply chain backups, businesses are seeking more credible information and technology upgrades to develop a more agile system. Automation, transparency and new partnerships will figure into this, the report said.

A meshing of physical and digital: 70% of retailers surveyed said they plan to invest more heavily in digital marketing, with a focus on e-commerce and online shopping, although data security remains a concern.

In regard to staffing, Deloitte says employers will have a tough time competing with the flexibility of the gig economy for hourly wage workers, and the COVID-19 pandemic has exacerbated the problem.

Many employees who were displaced, either temporarily or permanently, during COVID-19 shutdowns have re-evaluated their options and aren’t as quick to take the first job that comes along. Employers are struggling to fill openings as a result.

Nearly half of the 50 senior retail executives Deloitte surveyed across multiple subsectors from Oct. 29 through Nov. 9, 2021, expect a shortage of skilled workers for IT and analytics positions — key roles needed for the reset.

Technology and automation

With staffing in question, retailers should invest more heavily in technology and automation to reduce their reliance on physical labor, the report recommends. More than half of the leaders surveyed believe staff-free stores will be common within the next five years.

That trend is already reflected in Amazon’s “Just Walk Out” technology, which is in place at some of the company’s grocery stores in Southern California. The Amazon Fresh markets have staff on hand, but they also offer a digital option allowing shoppers to enter the store, grab what they need and leave without going through a checkout line or self-serve kiosk.

“The (labor) shortage is compounded by the fact that retail is competing against virtually every other industry for talent,” Deloitte said. “Retailers need to solidify why they are more attractive than big tech for high-demand workers.”

Changing consumer behaviors

The report also notes that current supply chain networks are struggling to keep pace with the way consumers shop.

People have become “merchants in their own right,” the analysis said, buying from a broad range of retail channels via their social media accounts, reselling used goods through digital platforms and setting the terms for how purchases arrive on their doorsteps.

“Forward-thinking retailers should strive to automate their processes as much as possible and consider making significant investments in automated driving technology and last-mile delivery,” the report said.

Sixty-seven percent of the executives surveyed cited e-commerce and online shopping platforms as top investment areas, yet only a quarter plan to make major investments in data privacy and security.

That could be a costly mistake.

A 2021 study from Sophos found that the retail industry was hit the hardest by ransomware, with 44% of retailers attacked globally. As retail increases its digital presence — from cashier-less stores to drone deliveries — the attack surface expands.

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“Cybercriminals were quick to exploit opportunities presented by the pandemic, which in the retail sector was primarily the rapid growth in online shopping,” the Sophos report said.

Smaller retailers can’t compete with mega players that utilize their data to maximize supply chain efficiencies, Deloitte said, but they can boost their efficiency by sharing data with suppliers who otherwise might not know what products they expect to sell or discount in the future.

As one Deloitte expert said, “There can be no secrets anymore. Not sharing information is just detrimental to everyone.”


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