At the NRF BIG Retail Show 2013, a new relationship was announced between Kronos and Manhattan Associates to help retailers profitably integrate their physical stores into their digital selling strategy. The idea is to allow retailers to increase customer satisfaction and drive sales by freeing up trapped inventory in the store and elsewhere in the upstream supply chain, while managing labor costs.
Customer satisfaction should be improved via better scheduling and staffing to meet customer demand driven from all channels. Increased sales should come from the ability to tap into inventory assets across all stores and distribution centers, which were previously unavailable to online shoppers. Last but not least, labor costs can be better managed via eliminating overstaffing through increased visibility into the labor required to meet omni-channel consumer behavior. Simply said, retailers must better their staffing procedures for in-store employees and better schedule this staff for workloads originating from the distribution centers and external sources of demand such as special orders, large seasonal resets, and drop shipments.
Modern Retailer Problem
As brick-and-mortar and online retail channels merge, store operations executives are struggling with the following two key issues:
To overcome these issues, early adopters of omni-channel strategies are realizing that incorporating labor and store fulfillment can lead to greater profit margins and more so-called perfect orders. Retailers typically manage their operations based on historical shopping patterns, and therefore, their information is collected in silos, online vs. in-store. A sad fact is that many retailers still keep and allocate their inventories separately for each channel regardless of where the aggregate demand really comes from.
Managing their in-store workforce based only on data collected at the store level, such as Point-of-Sale (POS) and shopper traffic, is preventing retailers from maximizing margins in an omni-channel environment. Traditional demand drivers for in-store workforce come from historical forecasts and actual deliveries of direct orders, POS buys, shopper traffic, and indirect orders (e.g., transfers), as well as taking into consideration the available stock, cleaning/maintenance, and corporate merchandizing tasks (seasonal arrangements, promotional displays, etc.). But what also must be taken into consideration in these days of omni-channel commerce are the online orders, inventory accuracy data, and returns.
Retail has been a leading industry for both Kronos and Manhattan Associates even though neither company can satisfy all retailers’ needs on its own. Leading retailers around the world use Kronos to better manage their store workforce and turn to Manhattan Associates for omni-channel supply chain excellence. Conversely, Kronos’ workforce management (WFM) solution can produce suboptimal results without knowing the upstream inventory situation and multi-channel demand, whereas Manhattan’s order fulfillment solution cannot work properly without taking the stores’ available human resources (HR) into consideration.
Working together, the two industry leaders intend to help retailers achieve additional benefits from the use of their solutions. The joint solution should enable retailers to efficiently execute store fulfillment processes while better staffing their stores accordingly. These two solutions, when paired together, will account for labor demands from all selling channels and from all non service-based activities now required to support the omni-channel initiatives. The impetus for the alliance has likely come not only from these vendors’ joint customers, but also from the recent merger of their respective direct competitors, JDA Software and RedPrairie.
With this combined solution, retailers should be able to forecast and schedule in-store associates based on historical information, staff in-store associates based on real-time e-commerce data, and apply labor standards to non-service based activities. Better management of labor costs and meeting in-store customer demand driven from all channels are the envisioned benefits for joint customers.
Related TEC Report:
KronosWorks 2012—Kronos Hitting on all Cylinders (December 2012)