Can UK retailers offset today's living wage hike with tech?

How technology can help UK retailers mitigate today’s new National Living Wage ruling

This is a contributed piece Ed Armishaw, Head of customer acquisition, Walkbase


Today the new National Living Wage goes into effect, and businesses across the UK are required to pay their employees at least £7.20 ($10.13) if they are over the age of 25. Over the last few months, we have heard many different things in the build-up to this change and one thing continues to dominate headlines – how will retailers feel the pinch?

According to recent research from the British Retail Consortium (BRC), the new living wage could accelerate the loss of 900,000 retail jobs in the next decade. A recent article in the Financial Times also stated that these plans will threaten the viability of some jobs, with social care likely to struggle the most.

The fact is that this new living wage will add millions in cost to a company’s P&L and retailers will need to account for it within their existing budgets, set by their boards. As a result, retailers are looking at ways to make the most of what they’ve got.

But there is one easy change retailers can make, which often has a much larger-than-anticipated impact on the bottom line – optimise staff. By managing staff more intelligently, rather than relying on gut feel, retailers can make a huge difference not only for numbers but for the overall store experience. This can be done by looking at customer trends in-store and building rotas appropriately.

For example, Tuesday afternoon may be quiet for some stores; however retailers could be staffing them like it is a Friday afternoon – a much busier time of the week. By having Wi-Fi analytics inside the physical store retailers are able to understand staff and customer behaviour, picking up any inefficiencies. One example of this could be too many staff hanging around in the changing rooms when they could be on the shop floor answering customer queries. According to research from Vodat International, retail staff not being able to answer questions is the biggest bugbear amongst UK shoppers.

This data can then be used to redistribute staff to optimum areas or even days in-store, meaning retailers can save money by not having people to worry about. It’s about retailers getting smart and working more efficiently to maximise existing operations. An Oxford Street retailer has already done this and redeployed people to days later on in the week – as well as changed their store opening hours – to optimise staff time and also respond to customer shopping patterns.

Employees are the absolute selling force of any retailer and as we get ever closer to the new living wage change, now is the time for retailers to maximise their employees. Placing staff in certain positions at certain times of the day will help enhance shopper activity and create for the best possible customer experience, while keeping overall costs down. Can you afford not to be doing that?