Retailers: Your Customers are Watching how you Treat Store Associates
Legacy labor scheduling software treats retail store associates as interchangeable parts and can be programmatically biased to generate shifts that wreak havoc on employees’ personal lives. While these scheduling practices can yield marginal short-term profitability improvement, recent events at Market Basket and Starbucks are a strong reminder that companies that shift their focus from short-term profit to customer satisfaction — driven by happy store associates — will see greater returns over the long run.
Store associates do everything from ringing up sales to helping customers and re-stocking shelves. But this summer, two major corporations have been forced to re-evaluate their operational practices because of the actions of store associates, made more powerful by the combination of media and customer support. Retailers ignore the lessons of these two companies at their peril.
Market Basket: A Family Feud Becomes Very Public
Earlier this year, Market Basket CEO Arthur T. Demoulas was fired by the company’s Board of Directors, which was led by “Arthur T’s” cousin and rival Arthur S. Demoulas. An internal feud over the company’s profitability and employee pay and benefits, which had been reportedly brewing for years, was now quite public.
In response to the firing, Market Basket workers — from executives to thousands of store associates — resigned or walked off their jobs, halting work at Market Baskets across New England. Sales have plummeted. And customers have rallied behind the workers by boycotting stores and creating crowd-funding campaigns to assist Market Basket employees.
Seeing their reputation damaged in the eyes of their customers, the Board of Directors has been scrambling to fix the issue. They have released multiple statements asking employees to return to work. They have also reportedly held discussions to sell the company, but due to customer dissatisfaction, potential buyers are likely wary of the possible long-term decline in Market Basket’s value.
Starbucks: Optimized Schedules Create Chaos
Starbucks has also experienced the power of entry level associates, in this case a single barista who was the subject of a feature story in the New York Times about the retailer’s employee-unfriendly implementation of Workforce Scheduling software. The case of Jannette Navarro, a barista at Starbucks, brought to light how scheduling practices that put profits above people can cause chaos in employees’ personal lives.
As the New York Times article went viral, getting re-posted on social media sites such as Twitter by concerned customers, Starbucks was forced to look at the impact of its labor scheduling practices on employees’ quality of life. Starbucks reportedly told employees in an email on August 14th that the company would revise its scheduling practices to, among other things, bar back-to-back closing and opening shifts, require schedules to be posted at least a week in advance, and try to transfer workers with more than an hour commute to closer stores. The story of just one entry-level worker, amplified by the media and customers, forced a corporation to re-assess its operational practices.
What these two events underline is the importance of being able to create an open dialog between upper management and store workers to better understand the needs and concerns of people working in the store. It also shows the importance that patrons put on the well being of store associates and that a key factor in keeping customers satisfied is to make sure employees in the store can operate at their best.
When Reflexis Systems designed its labor scheduling system, it used state-of-the-art algorithms that can factor in business goals & labor/union rule compliance along with employee work preferences, resulting in shifts that balance the needs of the company and employees alike. With so much of the in-store customer shopping experience riding on the proficiency and mood of managers and associates, retailers should ensure properly scheduled store employees have the tools they need to do their jobs efficiently and provide a satisfying shopping experience.
While software can make it easy for businesses to operate at maximum efficiency, the examples of Market Basket and Starbucks are a reminder that at the end of the day people, not machines, make companies run. Keeping employees happy and on-track with fulfilling careers and lives is key to a company’s success.