Empowering the Modern Workforce: Employee and Customer Self-Service

The biggest challenge of 2022 is retailers' biggest opportunity for competitive advantage in 2023. Labor shortages remain, but retail leaders are exploring what they can do to empower employees to become more successful and feel more satisfied in their roles. Across the coming year, the expectation among retailers is that 16% of their in-store technology budget will go to workforce solutions — that’s up from the 11% that was spent on in-store workforce solutions in 2022. The increased allocation to workforce management solutions is no surprise given the problems retailers face with attracting talent — problems that impact staffing from frontline associates in stores to employees in distribution centers to IT professionals and corporate support teams. In its 2022 state of the retail industry report, Deloitte noted that 83% of retailers were investing more heavily in employee recruitment and retention, and the retention piece — incentivizing employees to stay put and seek career advancement within their organizations — is the most critical component. Deloitte’s report concluded: “The issues go far deeper than merely salaries. Priorities have shifted for employees, especially around flexibility [and] culture.” Empowering the workforce to work more autonomously — whether that entails scheduling their own shifts, finding answers to recurring questions, solving operational problems independently, or addressing customer requests — enables associates to be more efficient and effective in their roles. By incorporating self-service modules or chatbots, and using intelligent automation, retailers will remove redundancy at the store level and free frontline workers to address more interesting tasks and engage in more meaningful interactions with customers. Here are three steps to free up associates and IT departments, positioning a retail enterprise for workforce empowerment: Step 1: Identify key areas where intelligent automation will have the most impact. There is virtually no area that isn’t improved with intelligence. Access to actionable data benefits every facet of retail operations — from onboarding employees, to solving POS issues, to providing a personalized customer experience in-store and online. Because of this, retailers have become increasingly focused on high-level, technology-driven workforce strategies that directly influence how vested employees feel in their jobs and how likely customers are to feel positive about the retail brand. The fundamental objective is to enrich — not replace — human interaction. When RIS surveyed retail executives in May 2022, two-thirds of retail leaders said they are seeking technology-driven workforce strategies that will enable store associates to provide a personalized customer experience. This outcome can be achieved in two ways, by automating answers to repetitive questions associates may have, freeing them up to help associates more frequently and faster, as well as by providing workers with the information needed to serve customers at their fingertips. Home improvement retailer Lowe’s is doing just that, committed to utilizing technology to increase touchpoints and facilitate informed communications between frontline associates and customers. This fall, Lowe’s announced that its in-store operations would adopt a digital twin strategy, essentially creating a virtual replica of their physical store that provides insights into real-time data. Frontline associates don AR headsets to gain visibility into products on hard-to-reach shelves, monitor actual stock configurations, review sales activity, and track customer traffic using photorealistic 3D heatmaps that indicate how far customers or associates need to walk to locate items. At the very least, consumers expect store associates to be as knowledgeable and up-to-date on product availability and real-time data as the information they find on the retailer’s website. The pandemic pushed consumers to shop online, but the positive experiences consumers had online are what have elevated expectations for all retail transactions, and Deloitte reports that 96% of consumers expect a seamless experience across channels. RIS’ “2022 Annual Technology Study” reported 22% of total revenue in retail enterprises was attributed to digital sales and many retailers are reporting higher customer satisfaction with digital transactions. Best Buy revealed in 2022 that chat experiences in its virtual store produced a 20% improvement in customer satisfaction compared with traditional chat experiences, as well a higher close rate and higher sales, and they’ve also seen a 72% uptick in customers using the Best Buy mobile app while inside stores. Earlier this year, Damien Harmon, Best Buy’s EVP, omnichannel, noted: “When customers engage with one of our consultants or designers, they shop with Best Buy two times more frequently — so looking ahead, we believe our annual consultations will grow by more than 200% by fiscal 2025.” It’s the classic “work smarter, not harder” paradigm: The only feasible way for retail organizations to meet growing demand is to empower the workforce with real-time intelligence. Step 2: Equip employees to succeed with information in place. Time and tools — those are baseline expectations for frontline success. The Harvard Business Review (HBR) reported in March that, despite labor shortages, hourly workers, both full-time and part-time, continued to face inadequate hours and unpredictable shifts. Retail was one of the industries HBR cited as among the most problematic, with hourly workers clocking on average just 30 hours a week. Across all industries that rely heavily on hourly workers, 50% of businesses say they will use automation to drive scheduling decisions by 2025, according to the report, “Market Guide for Workforce Management Applications,” from Gartner. After Sam’s Club committed to more stable schedules in 2019 — a move that included implementing tools to make workloads more predictable — the HBR report indicated the retailer saw a number of improvements, including an increase in customer satisfaction and sales, and improved productivity in the workforce. Most notably: Sam’s Club reduced employee turnover by roughly 70%. Predictability and flexibility are must-haves for job satisfaction, and McKinsey reports that a third of frontline retail workers say “lack of flexibility” is a top driver of attrition. For Canadian menswear retailer Harry Rosen, making artificial intelligence (AI) part of the workforce has generated many benefits, but it took looking past preconceived notions of what great customer service is to get there. EVP of digital and strategy Ian Rosen told RIS he noticed there was a lot of administration work taking away from the retailer’s customer care team. The retailer mapped out how many manual things the customer care team was handling, and the result was “pretty shocking,” he said. To overcome this, the retailer tapped virtual agents to essentially sit alongside Harry Rosen's human agents. It began by triaging tickets to understand a customer’s need and urgency, and to get a customer in the right agent’s hands as quickly as possible. It then assisted agents with suggestions and AI, which is now a part of their workforce, interacting directly with customers to resolve tickets on email and chat. This move helps the company deflect over 70% of tickets on chat. However, getting information in place for these tech tools to work, requires training AI. This involves not only training the AI from day one, but also ongoingly proactively looking for ways to train the AI. For all the advantages that high-level, intelligence-infused technology brings to the workforce, transitioning from operations that have relied on low-level legacy systems can be intimidating for frontline workers. Burton Snowboards, which has 55 stores globally including 21 in the U.S., met those challenges head-on with a total digital transformation. “In terms of [becoming] a true omnichannel retailer, some of the legacy systems were holding us back,” Brian McAllister, director of global operations, told RIS earlier this year. Store teams faced some of the biggest changes as they underwent a transition from primarily fixed desktop point of sale (POS) to tech-enabled processes that provide visibility to inventory across all stores and the distribution center, positioning frontline workers to reroute inventory to address customer demand. Part of Burton’s solution for fostering an omnichannel personalization of customer service included outfitting all of its store employees with company-owned iPhones. In the first three months of making these changes, Burton associates exchanged roughly 1,700 SMS messages with potential customers, and 60% of those texts produced a sale. Step 3: Build a future-forward customer service model that integrates across the retail enterprise. By definition, a future-forward model is constantly evolving. The answers that address customer inquiries this morning may be different by the afternoon, so the trademarks of intelligent automation are agility, adaptability, and authenticity. The knowledge management systems and chatbots that leading retailers rely on not only assemble real-time data to respond to questions that come up repeatedly, they also incorporate AI and natural language progression (NLP) to anticipate questions before they’re asked. Essentially, the chatbots become increasingly intuitive and more educated relative to the retail brand. PacSun offers a classic case study of a retailer successfully using chatbots to automate customer service: “Through continuous learning and NLP, the bots can understand about 98% of consumer comments, reducing the need for consumers to repeat information for related and follow-up questions [such as a store location or inventory availability],” stated Michael Relich, co-CEO of PacSun, in a conversation with CGT earlier this year. As a result of upgrades that integrated data-driven intelligence with natural language processing, PacSun was able to offload the vast majority (83%) of customer service calls through its chatbots, resulting in only 17% of calls needing to be handled by a PacSun agent. That’s even more significant given that many of the customer communications occur when PacSun agents are not available. More than half (57%) of PacSun chatbot conversations occur when its call centers are closed. What’s concerning is that almost half of retailers (49%) told RIS in May that they had no plans to upgrade their chatbot capabilities, and only 17% said they had up-to-date chatbot technology in place. Fifteen percent had started but not finished a major chatbot upgrade, and the remaining laggards were looking at starting a chatbot upgrade by May 2023 (5%) or starting in 12 to 24 months (15%). For retailers looking to empower their workforce, chatbots become an invaluable resource — effectively dealing with mundane questions so employees, from frontline staff to call centers to IT teams, avoid the mind-numbing stress of answering the same questions repeatedly. Many high-level technology-driven workforce solutions automatically translate communications across multiple languages. And they automatically log the communication and archive customer service tickets so no human ever has to touch it or take admin action. Every employee can work smarter when aided by intelligent automation and potentially grow into more advanced positions within the retail organization — a win-win for the retailer and the associate. Conclusion: Retail’s future is smarter, leaner, and more personal. The store of the future will have fewer frontline employees, but the workforce will be more confident, backed by digital transformations that bring intelligent automation and assertive technologies to improve decision-making and streamline routine processes. In characterizing the workforce of the future, McKinsey research concluded that retailers should be focusing on technologies that “automate activities, freeing up time and energy for more meaningful roles.” Empowering employees to solve problems on their own — often without requiring more than a few steps or processes — forms part of this broader, more ambitious vision for the future of retail. Staff-free is hard to fathom, but retailers providing a higher level of personalized service with fewer employees is on a fast track to ubiquity as workforce empowerment effectively elevates — but doesn’t eliminate — workers in retail settings.