Industry Study: Grocers Adopt Game-Changing Technology From Industry-Leading Partners TimeForge and CBS NorthStar
Amid the pandemic, rising cost of labor, worker shortage, and changing consumer demand, businesses are even more motivated to find ways to do more with less and to differentiate themselves from the competition. And they’re succeeding… with technology.
In this article, industry-leading partners TimeForge and CBS NorthStar present data from a study of retail businesses from 2019-present and discuss 3 key ways grocery and food retailers are using cutting-edge technology to meet the difficult challenges of today’s retail landscape. (Spoiler: This article isn’t about self-checkout.)
Below, we break down the challenges we’re seeing the industry overcome, and how the data shows retailers are doing it:
Improving Employee Retention and Optimizing Labor
One of the ways grocery and food retailers are tackling the labor shortage problem is by doubling-down on their employee retention efforts via technology.
When faced with a labor shortage, it’s much easier and more cost-effective for businesses to retain their current hourly staff than to hire and train new team members. This is especially true when competition for new hires is tight. Employee engagement and satisfaction, two factors that strongly influence retention, are therefore more important than ever for retail businesses.
Turnover Has Mostly Stabilized
“When we look at data for 2019, 2020, and 2021, we can see that 2020 was a very unstable year for retailers due to the pandemic. The number of terminated employees – both mandatory and voluntary – compared to new hires was highest in March 2020, when many workers were let go or decided to stay home to avoid exposure to COVID-19. In 2021, the ratios are higher, but the trend so far looks much more like what we saw in 2019.”
Many traditional grocery and food retail operations still rely on older timekeeping and scheduling methods, which tend to fall short of employee expectations and fail to either engage or satisfy workers. This is a major area where TimeForge is stepping up to help businesses adopt game-changing technology.
Grocers Are Adopting Employee-Retention Technologies
“In order to stay competitive as an employer, you need to ask yourself whether you’re providing the conveniences that employees today expect,” said Audrey Hogan, Chief Operating Officer at TimeForge. “Most workers today want to be able to check their schedules and timecards, pick up shifts, swap shifts, and request time off from their mobile phones. If you’re not providing those features to your employees, the stats show that they’re likely to go work somewhere that does. With the current situation, your competitors would be glad to have them. We’re living in an age when these employee-retention technology options are usually inexpensive or free to businesses, depending on their labor platform, so grocers are adapting quickly – and we’re seeing those results shown clearly in this study.”
When looking at the average ratios across all 3 years, 2021 looks much closer to normal for retailers so far, which suggests that they’re having more success holding onto employees:
Labor is a Balance Between Staffing and Demand
But retaining employees is only part of the battle. Businesses also need to ensure that all available staff are scheduled efficiently and according to anticipated demand, or customer retention could take a dive. This is another area where technology, especially cutting-edge tech like Artificial Intelligence and predictive analytics, can make a huge difference.
TimeForge’s sales-driven scheduling software can generate staff schedules in advance and helps grocers cover their labor needs much more efficiently. TimeForge can also build in adequate rest breaks and periods of time off, which are not only mandated in many states but necessary for keeping the workforce from getting burnt out. Tired, overworked team members make more mistakes; they’re also less likely to show up to work when they’re needed. Adequate hourly coverage not only increases CSAT, it improves employee retention (which in turn improves CSAT).
Hogan added, “Your store lives or dies by your front end. An experienced retailer can walk into any store on the planet, take one look at how the front end is running, and know precisely how well that store is functioning – whether they’re pulling managers to run registers, whether the team feels harmony or chaos, and whether the customers feel served or ignored. When your labor management strategy is inline with your business strategy, and you’ve empowered your team with the right tools to execute on both, you become unstoppable. We’re seeing the old-school service level philosophies implemented through easy-to-use technology, and the grocery industry is exploding with potential in the best way as a result.”
Grocery Employees are Working Longer Hours
When looking at the study data, 2020 saw a lower average shift length across all days of the week compared to 2019. As business picked up in 2021, shift length became longer, especially in light of the labor shortage. This is also true for every day of the week:
Employees are working longer hours than they did in 2019. When looking at the data across the months of the year, we see a spike in March 2020, when many workers were initially sent home (or opted to stay home), and their coworkers picked up the slack. March 2020’s increase in shift length was followed by a noticeable decrease as grocers quickly hired to offset the imbalance. Contrast this to the steady increase in shift length in 2021 during the labor shortage, and factor in the reduction in overall staffing, and it’s clear that more grocery employees are now bordering on full time status than they did in 2019. But grocers don’t have the same talent pool to pull from that they did over a year ago, so the remaining team members are still working longer shifts than before.
“With the extended shift lengths, retailers will need to keep a close eye on morale and implement proactive strategies to combat burnout. “Burnout” became almost as overused a term as “big data” in 2020, but employers will continue to see the impact of long hours on their teams unless they can balance long hours with appropriately planned time off. Many employees are thriving with the extended hours and bigger paychecks, but grocers should be incentivizing their employees to plan to use vacation and sick time, perhaps now more than ever, before staffing problems get even worse due to an increase in burnout-driven turnover.” Hogan added, “I’ve had several retailers tell me that the teams they have right now are capable of weathering any storm – many of them stuck through the chaos of last year… but those are the team members you want to fight to keep, even if fighting for them just means asking them to take a day to spend with their families instead of working 14 days straight.”
Grocers Use Centralized Data for Operational Excellence
While the extended hours for employee shifts are starting to stabilize, we can still see that many retailers are leaning heavily on their full-time employees for maintaining coverage throughout the day. If we focus on this analysis as it pertains to the continued labor shortage, many operators are prioritizing their employees’ availability more than ever, in an effort to retain them. We’re seeing grocers finally feel stabilized enough to consider hourly customer volume and their traditional budget metrics when determining labor coverage.
Artificial Intelligence is Retail’s Crystal Ball
Critical to operational excellence, including precise labor coverage, is centralized data that is easily accessible. To that end, retailers are leveraging labor platforms that integrate with their point of sale system. TimeForge’s multiple sales integrations paired with its native labor data allows retailers live access to what’s happening at the store, while TimeForge’s proprietary Machine-Learning algorithms forecast sales with 98.87% hourly accuracy, which can then be applied to automated labor distribution for optimized staff coverage according to anticipated demand.
“Pre-COVID, many retailers were skeptical about forecasting. Many grocers, especially independents, assumed that there were just too many factors in play, like seasonality and holidays, to leave it to a computer to decide over manager experience,” says Hogan.
“When we helped predict sales stabilization, surges, and wanes throughout 2020 and early 2021, we really had a challenge and an opportunity to put our money where our mouth was. In fact, our AI modeling allows seasonality, holidays, weather variance, and other trends to be incorporated into the forecasts far better than what managers are able to do alone.”
“Our forecasts were able to stabilize within a few weeks of initial shutdowns last year, giving grocers who used TimeForge a critical advantage over their competitors – it was a crystal ball in the most uncertain of times. This is not to discount the importance of managerial experience, though – in fact, we find that the most accurate predictions marry manager instincts with our proprietary algorithms – so we encourage store leadership to create their own sales projections in the platform. We see more grocers relying on our sales forecasting than ever before, which leads to better labor coverage, which leads to better customer satisfaction. All of the pieces move together, in the right direction.”
Communication Solves Labor Shortage for Multi-Location Grocers
With mobile computing an everyday truth in modern retail, exposing labor tools to the employee base is helping multi-location employers close labor shortage gaps. TimeForge offers unique functionality that allows a short-staffed location manager to borrow eligible employees from geographically nearby locations, without generating overtime, incurring penalties, or needing to pick up a phone.
These “Transfer Bids” between stores allow retailers to shuffle employees to shifts at nearby locations to better meet expected demands, improving customer service across multiple units, encouraging employees to earn extra hours when they want to (without generating overtime), and balancing staffing across the organization by creating an internal “gig economy”.
Increasing Guest Capacity and Food Sales with Fewer Staff and Less Training
The past year and a half has seen a surge in self-checkout, but that’s not the only way businesses are pivoting their models to maximize revenue opportunity. One of the ways retailers are choosing to differentiate themselves is by adopting a hybrid or “grocerant” business model, in which they sell prepared foods at a dine-in area of the store (or multiple dine-in concepts throughout the store) Some grocers are converting their delis to offer a wider variety of foods while others are converting massive floor space to chef-prepared salad bars, full diner-concepts, or cooking classes and take-out meals hosted by a round-robin of local restaurateurs.
Prepared Food Concepts Help Grocers Differentiate
“One of the key points of differentiation that I continue to see within the grocery store industry is finding unique and revolutionary new ways to be serving customers’ needs,” says Jeremy Julian, Chief Operating Officer of CBS NorthStar. “Being that one-stop shop is the huge game-changer we’re seeing in grocery right now. It’s an incredible advantage to be the place where customers can stop on their way home from work, get a gallon of milk, a carton of eggs, and a fully prepared meal that meets their nutrition needs, and their family’s needs, without having to deal with going into a restaurant and grocery store separately. ”
While the grocerant model has the potential to draw guests physically to the store, it has to be implemented with conscious intention in order to avoid pitfalls. Adding a restaurant into a grocery store requires different technology and skills than most grocers have on hand. Technology plays a pivotal role in ensuring a quality guest experience.
Foodservice Concepts Require Foodservice Technologies
“There’s a uniqueness of what restaurants need, from food prep, to taxation, to the ways that a ticket must be sorted in order to ensure that the longest hold-time or prep-time item is at the top of the ticket and started first,” explains Julian. “This makes a huge difference to the quality of the guest experience when they take that food home. Without the right tools in place, grocers will find themselves with essentially just a very busy deli and dissatisfied customers, instead of a booming second revenue stream with repeat clientele.”
Grocers Maximize Labor with Tools That Require Minimal Training
One of the major benefits of using CBS NorthStar in a grocery foodservice environment is that it’s designed for food prep situations and knows just how long each item on a ticket will take. For grocery and food retailers thinking about implementing a grocerant model, it simplifies ordering for both customers and staff. With a customer kiosk model, user experience can make or break an order, so the simplicity of CBS Northstar has a significant impact on the likelihood of a customer to order again. For staff-entered orders, the order entry simplicity, paired with the inherent time-savers built into the Northstar system, reduces the amount of training required of new staff – reducing downtime and improving time to launch.
With CBS NorthStar, all ingredients used in menu items are shown at the time of ordering, both on the staff-facing side and customer-facing or tableside ordering kiosks. This may seem like a minor detail, but significantly impacts upsells. If a customer has a question about what goes on the burger, all the information the team member needs is right there at the time of order. When hiring, this frees managers to look for someone with a track record for being reliable and a team player, even if they have no grocery or food service experience whatsoever – more critical now than ever before. With NorthStar, very little training is necessary, which means the cross-trained nature of the grocery store doesn’t have to stop at the new food concept; a HBA employee is just as capable of handling a food order as a dining employee.
Self-Checkout for Foodservice Facilitates Upselling
“The other thing that’s unique about NorthStar is that it has a capability that grocery store POS systems don’t have, and that’s to have guests do self-service through a full ordering kiosk with upsells and suggestive selling,” says Julian. “For example, NorthStar knows whether a guest has added a beverage to an order for every entree and, if not, asks them if they’d like to add a drink. We know that, statistically, beverages attached to a transaction make them 70% more profitable, because they’re charging $2.50 for a 3-cent cup and 5 cents worth of syrup. Even one beverage can make a transaction much more profitable.”
Similarly, the software can suggest items that would pair well together. For a grocerant with a wine selection, NorthStar might suggest the best wines for pairing with prepared meals.
Julian added, “Consumers made their voices heard over the past 17 months, and retailers listened – adding more full-service delis, full-menu bistros, diners, wine bars, having beers on tap next to a TV with the game on – retailers who are getting this right have become the heart of their communities again. They’ve accepted the challenge, risen to the occasion, and are reaping the rewards.”
Grocerants Prioritize Reduced Wait Times and Increased Customer Satisfaction
One of the biggest complaints customers can have that will keep them from coming back to a store is wait time. While self-checkout significantly reduced wait time at the Front End for most retailers, wait time in departments continues to be a challenge – especially with the lack of skilled department hires available. More efficient scheduling is the first step toward optimizing resources and ensuring enough staff on hand, but there are other ways technology can help retailers create the best customer experience possible.
For a grocery store looking to adopt the grocerant model, for example, technology is key for ensuring customer service. Data is clear that consumers look for four key points when choosing where to order their food for a meal: location, easy ordering experience, customization and personalization, and freshness and preparation.
When considering that 59% of restaurant orders from millennials are not dine-in, it’s important that grocers capitalize on the fact that they inherently fulfill requirement #1: location. Fulfilling the rest of the items is a simple matter of choosing the right tools and training the right people. Often cited as the most challenging hurdle is ensuring that food items are prepared and served as quickly as possible, especially during a lunch or weekend rush.
“If I’ve got a New York strip and a chicken caesar salad, and the New York strip is going to take the cook 12 minutes to prepare, the salad 3 minutes to prepare, NorthStar will send the items to the printer 9 minutes apart,” explains Julian. “This means that the cook is only making the salad after the steak has been fired and is on the grill, and the salad doesn’t spend 9 minutes wilting in the window before it’s served.”
Business Impacts of Technology and Industry Expertise
The business impact of choosing the right technology can’t be understated. Out of the box solutions often can’t solve the retailer’s specific needs or help them overcome particular challenges.
“The biggest thing that we hear from customers is their appreciation for our depth of understanding their business, and how to solve their business challenges,” said Julian. But it goes beyond just having the right tech. “You also need the right people implementing it and truly understanding what your business needs and trying to help you achieve those goals and objectives that you’ve set out for your business. And so, to me, picking the right partner is critical to the success of any technology deployment.”
“I’m honored to work with industry leaders like Jeremy and NorthStar. These initial findings in our 2021 industry study clearly show that grocers are adapting to each challenge as it comes around, and consumers are speaking more loudly than ever.” Hogan added, “Retailers are competing for wallet-share, and it’s no longer a luxury to have well-integrated solutions all talking to one another – the point of sale, the labor platform, the restaurant order entry system, the online ordering. When all of the pieces of your business are talking to each other and leverage each other’s data for synchronized operational benefit, the whole machine moves more smoothly – and profitably. Choosing a partner who not only provides demonstrated expertise, but also works with your existing ecosystem will ensure efficiencies and ROI for years.”
TimeForge is an operations-minded, HR-compliant, IT-approved labor solution designed for grocery that optimizes spend, efficiency, communication, and retention.
About CBS NorthStar
NorthStar is the iPad and Windows point of sale that helps restaurants (and restaurants inside grocery stores) improve the customer experience and become more profitable.