Learn How to Reduce Retail Labor Costs in 2023

Although brick-and-mortar retailers are looking forward to a fantastic 2023, labor shortages are still a big concern. If you manage a retail location, you’re probably asking yourself, “how can I reduce labor costs?” and you’ve likely come across some challenges in answering this question. The good news is that there are effective ways to reduce labor costs in retail while reinforcing your retail marketing strategy at the same time.

Below are several ways to cut labor costs, improve efficiency, and drive more floor traffic in the new year:

Evaluate Your Communications Strategy

To deliver a stellar customer experience and generate word of mouth marketing, your store’s departments must be on the same page. Department heads need to understand your branding message, and each department needs to communicate clearly with one another to provide efficient service. When departments aren’t able to communicate efficiently, labor costs go up as employees need to spend more time resolving problems that communication barriers have caused.

To address these issues, look at your store’s communications guidance. Do department heads know who to contact in other departments if a problem arises? Are departments equipped with tools to quickly and easily get in touch with one another to resolve customer concerns? Analyzing your interdepartmental communications strategy can reduce the time workers need to spend running around your store, and customer service usually experiences a boost from this as well.

Maximize Labor Value Through Cross-Training

Cross-training is another powerful resource to rely on when reducing labor costs. Employees who have been cross-trained can be utilized in more places, so they produce more value. In addition, if someone calls out or a position needs to be covered quickly, filling the role with someone who has been cross-trained reduces the need to call in another employee or face the potential for overtime costs.

You may also discover better placement for employees through cross-training. This has the added benefit of ensuring employee satisfaction with their roles, thereby reducing turnover and the need to spend more on recruiting and hiring. In addition, when employees feel fulfilled, they become in-store marketing resources because they can’t help but spread positive experiences when engaging with customers.

Incorporate Automation Solutions

Your store can also use automation to reduce labor costs since automation allows your store to accomplish more with less. For example, you can use a retail marketing solution like Demo Wizard to automate many tasks associated with hosting a store sampling experience or a demo of product features. You can also use software to automate inventory checks and product placement based on a customer behavior analysis.

Whether you rely on automation to make an in-store promotion more effective or take advantage of automation to track CPG brands trending in your store, you can reduce labor costs with automation. Increasing the amount of work that employees can do in a short amount of time with fewer resources required goes a long way in reducing labor costs.

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