Retail Labor Shortage – The Need for Technology

You see it in almost every store you walk into, or you’ve noticed it while you are waiting on hold with customer service – the retail industry is facing a shortage of labor. With labor shortage challenges predicted to persist in 2023 and well into 2024, retailers are left to find creative ways in providing high-quality customer service.

What’s causing the shortage? As unemployment rates decrease throughout the US and many other places around the world, and a healthy number of job opportunities available – although this number has slowed in recent months - many retailers are struggling to find and keep qualified, hard-working employees. Those that are searching for a job are opting for positions with flexible work schedules, higher wages, and the freedom of career mobility – allowing them to choose their next step in their career development. While retail offers many of these benefits, they are still seen as a transitional job opportunity for people to be able to put on a resume and move on.

Trouble filling daily staffing levels? With less staff working the aisles, stocking the shelves, and answering queries from customers, retailers are finding it difficult to provide a heightened retail experience to their loyal shoppers. As these blemishes compound, retail brands inadvertently suffer with little recourse to be able to correct consumer perception. Evidenced by the 2022 Holiday season, labor shortages was a root cause for the troubles retailers found in meeting consumer demands, especially since stores were dealing with an emergence of customers coming back to brick-and-mortar locations, all of whom were used to conveniences of pandemic shopping.

Trouble filling staffing levels is also leading to higher operating costs. When positions remain unfilled, existing employees may have to work overtime or take on additional responsibilities, resulting in increased costs.

Labor shortage is impacting more than customer service.  Apart from customer service, the labor shortage is also affecting the industry's ability to innovate and adapt to the evolving trends. Retailers attempting to introduce new technologies or initiatives may find it challenging with less staffing, making it difficult to keep up with the changes in consumer demands. This is a critical juncture for retailers to navigate; as eCommerce and personalized shopping trends grow, adopting new technologies are paramount to retailer’s success. Retailers that fail to invest in technology are and will remain at risk of losing loyal customers, market share and revenue.

The “Digital” Associate is the Key Component. To stay in touch with shifting trends, retailers need real-time access to consumer-based data. The technology they deploy onto the store floor is a great way to tap into that data and make changes to workflows that better fit their consumers’ needs. Data-driven analytics on what consumers are buying, how often they are shopping, how long they are spending in store or on a product page, among many others are crucial for retailers to have and understand. By placing enterprise-grade devices into the hands of store associates, retailers can empower their associates to accomplish higher levels of productivity, customer service and data collection. Associates can become the gateway for retailers to identify what data they need to tailor personalized and engaging retail experiences.

One of the most significant benefits of technology in retail is improved efficiency and productivity. Automated checkouts, improved warehouse management and inventory systems, and shipping and receiving operations are all areas in which retailers can enhance their diminished labor forces Retailers should be equipping their teams with mobile technology to meet the consumer wherever they are in their shopping journey. Although investing in technology can be an expensive endeavor, it is a crucial ingredient in sustaining achievable and repeatable growth for the future.

Does Technology have a Downside? What many feared as the “machines will take our jobs” has turned out to be quite the opposite. Technology is enhancing how we do our jobs and making us better at them. Retailers are experiencing a healthy return of consumers to brick-and-mortar stores, all the while dealing with the explosive adoption of eCommerce trends. As both become popular methods for consumers to shop (a.k.a. Unified Commerce) with their favorite brands, retailers are seeing the lines blurred between online and in store. Empowering staff with end-to-end technology that helps them meet the consumer wherever they are shopping enhances their ability to achieve higher productivity levels and increase customer service. As data concerns merit consumers weariness of what they give to a retailer, emerging technology is better at keeping consumer privacy data lock-tight and protected from potential data security breaches.  

The labor shortage in retail is having significant implications for the industry. While there is no easy solution to this challenge, retailers can take steps to improve their recruitment and retention strategies, such as offering more competitive wages and benefits, providing more opportunities for training and advancement, and creating a positive work environment. Retailers can make strategic decisions to invest in consumer analytics to ensure they understand their targeted shopper. They can then double-down on their investment by equipping their stores with technology that drives automation, productivity and better consumer and worker experiences.   

Honeywell has developed a portfolio of retail technology solutions that can help retailers address labor shortages and still pursue gainful growth in customer loyalty. Our solutions can be tailored to fit a retailer’s needs and drive productivity, enhance data collection and secure consumer data. Learn more by visiting Honeywell Retail Solutions page by clicking here.