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1. What trends are happening as it relates to consumer retail purchases, online vs. in-store?
2. What challenges do traditional retailers face in trying to transition from in-store sales to online sales?
3. List and briefly describe at least three of the strategies that Target has implemented in its staffing system to better accommodate online sales.
4. What are the career implications of the trends described in this article?
5. From a consumer perspective, what are the relative advantages and disadvantages of purchasing products online vs. in-store?
At a Target store in Brooklyn, stacks of televisions and toys awaited the rush of the weekend's holiday shoppers. Hours after the store opened, it was calm.
More frantic were the Target workers pushing carts through aisles to collect products ordered online by shoppers for home delivery or for pickup at the store.
Retailers are racing to adapt to a world where shopper behavior is changing and competition for online spending is fierce. Target Corp., Walmart Inc. and other retailers are staffing stores differently in an effort to meet new competitive challenges, as well as attract workers and control payroll costs amid the tightest labor market in decades.
Early data show that online shopping will once again account for a larger percentage of total holiday sales compared with previous years. Foot traffic to U.S. stores fell about 6.2% on Black Friday, as more people ordered online or went to stores on Thanksgiving Day, when visits increased 2.3%, according to ShopperTrak, which uses cameras to count traffic in a range of U.S. stores.
Online sales reached $7.4 billion on Black Friday, up from $6.2 billion last year, according to Adobe Analytics, which tracks hundreds of retail websites. E-commerce is expected to account for about $170 billion of the roughly $730 billion in total holiday spending this year, according to National Retail Federation estimates.
Some chains, including Target, Walmart and Best Buy Co., have posted strong sales in recent years by adapting to the shift to online shopping . They use their stores to handle deliveries or convince shoppers to pick up orders rather than wait for an Amazon.com Inc. package.
Target said it now sources 80% of its online orders from stores, not warehouses. At the Brooklyn store around 80 workers handle internet orders, collecting products from shelves or putting items into boxes in the backroom for delivery.
Target retrained the bulk of its 300,000 year-round U.S. workers over the past year, giving them new titles and responsibilities. The Minneapolis, Minn.-based retailer hopes to mold each into an expert for a specific area of the store such as the beauty department, toys or online fulfillment to offer better customer service and use labor spending more efficiently.
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"I've been with Target for 22 years and this is the largest [staffing] change I've been a part of," said Ashley Petzold, senior group vice president of stores. "As the retail environment has been shifting, I think we realized we needed to change as well."
After poor sales in 2017 prompted a new plan to invest in stores, Target executives also decided to revamp the staffing strategy, Chief Operating Officer John Mulligan said in an interview. Internal shopper surveys showed low scores for customers in need of assistance, Mr. Mulligan said.
At the same time, Target wasn't providing fast, consistent service when shoppers ordered online for home delivery or pickup in stores, he said.
Under the new staffing system, more workers are responsible for the full chain of tasks needed to keep their department well stocked and shoppers happy, including finding products in the backroom and stocking shelves, tracking inventory and answering shoppers' questions.
Target added technology on hand-held devices to guide workers through the store more efficiently to gather or send out online orders. And more workers are putting products on shelves during the day, not at night, to be able to help customers at the same time.
Target has also promised to raise the minimum hourly wage it pays store workers to $15 by next year. Labor spending has increased at a higher pace than sales each year since 2016, a spokesman said.
Walmart, the country's largest retailer by revenue, has also asked more staff to stock goods during the day in recent years, though only in a minority of the retailer's 4,700 U.S. stores, a spokesman said. The Bentonville, Ark., company uses stores to fulfill its online grocery orders and is increasingly relying on stores for other types of e-commerce orders, although most are shipped from dedicated warehouses.
As retail wages rise, daytime stocking is becoming more popular as a more efficient use of labor hours that keeps workers in the store helping shoppers, said Craig Rowley, a senior human resources consultant at Korn Ferry, a consulting firm. Many retailers started unloading trucks of goods and stocking shelves at night over 15 years ago, aiming to do that work fast without shoppers in the way, Mr. Rowley said.
"It's like running a little business now," said Kevin Lopez, a 21-year-old sales associate responsible for the toy department at a Target in Queens, N.Y. Ahead of the release of the "Frozen 2" movie in November, Mr. Lopez asked his store manager for extra space to stock toys related to the movie, trying to grab more sales. "I feel like I'm more in control of my department," he said.
Some workers have found the change overwhelming. "They want every employee to be doing everything and so it's making it so nothing gets fully done," said a 21-year-old staffer in a Texas Target. Others complained to managers when the new system made their existing work shift unavailable.
"Change is hard, even the fact that we made the change over a period of several years," Mr. Mulligan said. Target made sure each store worker had a conversation with a superior about the new system, he said.
Target is increasing market share in beauty and other areas in which it now has more dedicated staff trained to give product advice. In 250 stores that tested the new employee structure last year, sales increased faster than the chainwide average, a spokesman said.
"I think the biggest change is the introduction of online and digital retail into stores," said Ms. Petzold, the Target executive.
The new staffing system will be stress-tested amid the holiday shopping rush for the first time this year.
"For this to be a Black Friday and it to be this calm in store, it says a lot about the role of technology today," said Daniel Murreld, a 29-year-old employee at the Target Brooklyn store who has worked in retail much of the past decade.
On Black Friday morning, a line of shoppers waited to pick up online orders at the front of the Brooklyn store.
A family considered buying a microwave offered at a discount, but one of the younger members of the group chimed in, "No. Let's order it online."
Q1) Consumer behaviour has changed, as shoppers are drastically shifting from store shopping to online shopping. The trens that are taking place are:
i) Foot traffic in US stores have fallen by 6.2% on Black Friday.
i) On thanksgiving da, people preferred to visit the stores, and store traffic increased by 2.3%.
iii) Online sales reached 7.4 billions on Black Friday, exceeding the 6.2 billion from last year.
iv) Also, E-commerce or onlne shopping is expected to make up 170 billion of the approx 730 billion dollars total spent on holiday shopping the current year.
Q2) The challenges that retailers face in transiting from in-store to online shopping include staffing stores differently, meeting new competitive challenges, attracting workers and controlling payroll costs amid the tightest labour market in the last decade. They also need to handle deliveries in their store and convince the shoppers to pick up their online orders at the store, instead of waiting for packages to be delivered.
Q3) Target has implemented certain strategies in its staffing system in order to accomodate online sales and these are:
i) Target sources 80% of its online orders from their stores itself, and not warehouses.
ii) At the Brooklyn Target store, 80 workers have been allocated to handle internet orders, collects the products from shelves, and puts them into boxes, ready for delivery in the backroom.
iii) Target retrained almost 300,000 US workers over last year, and denoted them new titles and responsibilities. Target is dong this in order to turn each worker into an expert of a specific area of the store, so as to provide better customer service and thus optimize labour spending.
iv) Under the new system, the staff is more focused on keeping their departments well stocked, their customers happy, stocking shelves from products kept in the backroom, keeping a track of the inventory and answering all questions of shoppers.
v) Target has also added technology on hand-held devices for their workers with which they can easily navigate through the store, in order to gather or send out oline orders.
vi) Also, the staff has been trained to put products or restock the shelves during the day, and not at night, so that they can help customers at the same time.
Q4) The career implications are based on the growing importance of technology in the day. Labour spending has increased has target has also talked abour increasing minimum hourly wage to $15 for the store workers, this is because store staff not only helps to sell goods at the store, but also help to facilitate the delivery of online orders, which is an important part of increasing revenues for the retailers today. The staff is being used to stock more goods during the day, than at night, also retailors are trying to use their stores to not only fulfill grocery stores, but other kinds of e-commerce orders. Because the retail wages have increased , the job responsibilities of store workers have changed a bit, daytme stocking is encouraged, which helps to utilize labour hours more efficiently and store staff can help customers better. The sales associate of the stores are given more control of the store, as they can advise or recommend their store managers regarding the way how store shelves should be stocked up in order to gain more sales. Staff are getting trained in specific product categories, and ths dedicated knowledge and skills is helping to increase overall sales. So, the increase in wages of retail workers and the change in duties for the workers in the store and the implcations on their career is due to the introduction of online and digital retail into the stores.
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Questions: 1. What trends are happening as it relates to consumer retail purchases, online vs. in-store?...
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