The retail industry is known for its low margins and fierce competition, which constantly drives businesses to find ways to reduce costs and increase profits. However, with increasingly high costs of goods and inventory, fuelled by inflation, rising energy costs, and supply chain disruptions, reducing costs can be a daunting task for retailers. Additionally, consumer expectations are higher than ever, so to maintain their competitive edge, retailers often must find ways to reduce the overall costs of operations and avoid transferring those costs to their consumers.
Consequently, retailers are bound to explore internal cost-cutting measures. Workforce is often a major contributor to cost in the retail sector as people form the basis of all operations from manufacturing and logistics to distribution and sales in this industry. Reduction in people-centric expenses becomes a potential target to maximise profitability – however, businesses are facing a fiercely competitive talent market as the retail talent supply has reduced and more people are leaving the workforce. A study over a period of 5 years by Deloitte has found a 52% increase in open positions in the sector with a prevalence of staff shortages, especially in customer-facing roles such as hourly workers in-store operations.