In an industry with lowmargins(利润) where the traditional wisdom is led by Walmart, the key to success is lowering operating costs. A big part of those costs are in labor, so it is no surprise that the retail industry has been a leader in using more part-time workers to keep labor costs down, holding the line on wages, not training, and with few exceptions, seeing employees as a cost to be minimized. There is no doubt that these businesses fight for every dollar of margin. Unlike trend-leading hi-tech companies which spend a lot of money on employees to get them innovated, retail industry can spend very limited money on their employees.
What researchers found was that companies were often staffing their stores far too low, and that many stores tended to perform better with higher staffing levels and were more profitable. Let's let that sink in for a minute. The stores were making more money (with all other things being equal) when they spent more on employees.
They also found that retailers didn't do a very good job when staffing levels are just the actual demand in those stores. In fact, they set staffing levels identically across stores, even when the needs of the stores varied considerably. The average store did not appear to be understaffed, but there were enough that were understaffed and effect on overall company profitability was substantial.
Interestingly, the same researchers persuaded the retail chain to run an experiment with them and slightly raise staffing levels to the amount that their analysis of historical data suggests would be ideal. Yes, labor costs obviously jumped when they did that, but so did profits. In retail, labor is a small percentage of costs—the biggest part is the cost of the products they sell. So, the net effect was an increase in profits of $7.4 million across 168 stores on an annual basis.
What can we learn from this? One question worth thinking of is: How can traditional retail industry survive the increasingly severe market? Especially now with the growth of online retail, the one thing stores still have going for them is one to one customer contact with salespeople. If retailers cut that down to almost nothing, then they have effectively eliminated their competitive advantage against online stores.
