Optimizing Retail Labor Strategy Requires Better Data Sources

Retail labor decisions have reached a level of importance within the C-Suite rivaled only by where to locate a store and what merchandise to stock it with. There are opposing schools of thought regarding the best way to manage labor. Some argue that labor is a cost to be minimized, governed by a strict ceiling on selling costs. Others believe that appropriate number of well-trained associates create revenue opportunities through exceptional customer service and efficient task management, such as stocking shelves when shoppers need it most. The primary measurement for this side is sales performance.

A middle ground approach exists, where the measurement is profit dollars and the labor strategy is unique to each store within the portfolio. In this case, associate schedules are flexible without changing mandated hours’ allocations. After countless hours of discussion with retail leaders, I have concluded that each strategy has its own merits. The real opportunity lies in how you define labor success and measuring it effectively.

In the age of AI technology, there are new ways to assess how well your labor strategy is executed and to uncover opportunities to make it more profitable. It all starts with one question: What problems are you trying to solve with your labor strategy? Let us explore four common problems and how AI solutions can help address them.

1. Cost Containment

Limiting the impact of labor on a store’s P&L is an age-old problem. A typical tactic is to cut back on labor hours. However, this tactic, if not informed by data, can backfire – limiting a manager’s scheduling flexibility and placing associates in the wrong place at the wrong time.

Leveraging StrataVision’s proven technology, you can better assess which days and times are ideal for cutting hours without compromising service and essential tasks. By placing cameras strategically throughout the store and leveraging our AI algorithms, you can better understand:

• Customer Pathing: Where shoppers are going throughout the store.
• Zone Dwell Time: How long they are spending in specific areas.
• Department Conversion Rates: Measuring transactions relative to traffic in each department.
• Customer and Associate Coverage: Understanding how associate availability influences shopper behavior by zone, day, and hour.

These insights allow for data-driven decisions that not only contain costs but also enhance service and task management. By integrating our data with yours, we can gain deeper insights into your store’s performance, helping to evaluate the effectiveness of your strategy and identify necessary adjustments.

2. Appropriate Service Levels

While cost containment is essential, service levels must be maintained. Labor hours alone don’t tell the full story, so it’s important to track additional behaviors:

• Shopper and Associate Interaction – The schedule may identify where associates should be stationed, but overall store shopper counts / clocking associate counts often miss whether shoppers are actually being helped. StrataVision’s tools identify when and where customers receive assistance, allowing managers to reduce unnecessary overlap and reallocate labor where it’s most needed. Customer demographic data (such as age and gender) can also inform better alignment between shopper patterns and associate availability.
• Department Dwell Time: Dwell time takes on a different dynamic when assessing results through the lens of customer service. It starts with leveraging StrataVision data to benchmark different department results across multiple stores. This allows labor teams to better understand which areas by nature have higher shopper dwell times (like a busy shoe department) as compared to ones with typically shorter dwells (like an impulse display area).

Once these patterns are established, anomalies can be examined to determine whether labor execution—such as associate availability or shifting customer traffic—affects shopper wait times.

3. Task Management

The question is not how much time it takes to do any given task but when the tasks should be accomplished with the least amount of business disruption. Whether labor is allocated daily, hourly, or based on shipment schedules, balancing stock availability with customer service is critical.

I have observed big box retailers focus their task labor hours on their truck arrivals to optimize receiving. While this approach certainly minimizes the time it takes to get merchandise to the floor, it also can take valuable resources away from customer facing activities which may impact shopper buying decisions in-the-moment. By understanding shopper behavior—down to traffic counts and paths taken through the store on specific days and times—managers can schedule tasks at optimal times without sacrificing service. StrataVision’s AI solution provides data on zone-level dwell times, customer pathing, and associate availability to guide these decisions.

Prioritizing Labor Needs

Scheduling a store is dynamic and complex, which is why workforce management solutions are so widespread. But before you can deploy these solutions, you need a data-informed strategy that determines who, when and where associates should be scheduled.

Every organization has competing priorities, whether it’s tasking, asset protection, or customer service. These priorities should be guided by data—right down to the date, hour, and specific store area. Moreover, this data must be continuously monitored to ensure that each location strikes the right balance between cost containment and revenue growth.

By tracking shopper behavior, including traffic counts, dwell times, and associate engagement, you’ll have the insights you need to determine whether your labor strategy is truly delivering results.

Take Action Today

It’s time to move beyond traditional labor management approaches and embrace the power of AI-driven insights. With StrataVision, you gain the data intelligence needed to make smarter, faster, and more profitable labor decisions. If you are interested in learning more about how to optimize your labor strategy, I would love to hear from you!

To learn more about how to boost your retail success, check out my blog on AI-driven strategies for accelerating revenues, enhancing engagement, and minimizing loss.

Bjoern Petersen is the CEO and board member of StrataVision, a company dedicated to unlocking the transformative power of computer vision and AI in the physical world.