Let’s talk about the future of retail, and why Amazon and Costco are outperforming. I’ve worked several retail jobs, including in now-defunct Mervyn’s and Montgomery Wards. At Target, I was classified as Flexible Fulfillment, meaning I collected products throughout a three-story building to fulfill customers’ online orders (aka OPUs). I also stocked shelves (aka “pushing”), pulled products onto carts (aka u-boats), and retrieved products from the backrooms for guests.
In olden days, the backroom relied on brute force but was simple: trucks would arrive with merchandise around 5am; we’d use a dolly to unload products coming down the ramp; and then we’d position them for a separate team to stock the store’s shelves. Working hours were unpredictable 15 years ago because stores didn’t have data to indicate which time periods (other than major holidays) required more personnel, so I’d often get calls at 9pm asking if I wanted overtime the next morning.
Today, everything is recorded, and GPS allows much better tracking of supply and demand. When I pull an item off a shelf in the backroom, I use an electronic device to scan the shelf location, which updates the inventory. Is it a perfect system? Not yet. Sometimes, boxes have incorrect labels or the product has the correct label but the wrong product. Once a mistake enters the system, it compounds until caught and remedied on one of our “tricorder” devices — at least if you’re not in a dead spot lacking connectivity. Quite frankly, it’s miraculous retailers can keep track of so many different items day in and day out, though the level of defects and breakage vary.
Packaging is the most underrated retail skill. Each package, if not perfectly made to fit into various shelves, will either break, leak, or fail to properly display its contents. If a box is glued too tightly, my fingernail will break trying to open it with my bare hands. If a box is too large (I’m looking at you, Pirate’s Booty Popcorn), it looks ridiculous and takes up valuable space in the backroom as well as the sales floor. Though my average day involves walking 0.8 miles an hour to pick up different items for guests (“customer” is not the preferred nomenclature), the walking didn’t bother me — opening glued boxes did.
Second bothersome factor? Taking down boxes that shouldn’t be on such a high level in the first place. I’m 6 feet tall, and there’s no way an average male, much less an average female, could reach some of the boxes I picked every day. A full box of wine on an uppermost shelf weighs about 20 pounds, easy to lift if on waist level but hard if you have to prop it on one shoulder while using your other hand for balance. As for ladders, some aisles don’t have them, forcing team members to go to a different room to find a free-standing one (the worst kind, because most ladders are turnable and fixed in the aisles). Working a blue collar job helped me understand why sexism still exists, though I also wondered why technology hasn’t bridged the gap better. (Yes, a machine is available to lift workers to a higher elevation, but they’re not in every storage room, space is limited, and there’s no guarantee someone else won’t need the machine at the same time as your 30-minute deadline to fulfill a guest’s orders.)
The failure to use technology to level the retail working field is particularly odd because women spend a lot of money in America. I had to stock the women’s health section a few times, and while I don’t understand the need for an entire aisle of tampons or pads, I’m certain all of the products have high margins; otherwise, so much differentiation wouldn’t exist. In addition, women were more likely to order other products when ordering ones they needed, with beauty items like lipstick being popular add-ons. In my case, having to find specific brands of lipstick colors in a sea of 300+ for online orders was one of the most frustrating parts of my day, especially because I knew most women would be able to do the task much faster. If you want to score in retail, pay attention to expectant mothers. They bought so many products from so many different areas of the store, I would get a workout fulfilling each online order. (Long before the COVID19 pandemic, mothers knew the wisdom in disinfecting everything.)
What other advice can I give brick-and-mortar retailers? As mentioned above, you will never lose if selling beauty, baby, and/or cleaning supplies. Conversely, it’s almost impossible to generate consistent revenue from children’s toys and/or books unless you specialize and create seamless online operations tied with unique in-store events. With toys, children muck about and topple the entire section, making your store a de facto temporary daycare. With books, margins are quite good, but unlike fashion, a 30% to 50% profit isn’t enough on a base sale of 25 USD when demand is unpredictable and inconsistent while overhead, especially labor costs, is constant.
Two other areas for improvement:
1) Clothes are almost impossible to find, even with RFID-enabled devices. If I have only 30 minutes to find 6 to 10 items, I am going to skip the clothing item if I cannot find it quickly. Only toys were more disorganized than clothing/softlines. It might be time-consuming to find a small beauty product, but at least that section is organized and predictable.
2) Why is the employee discount typically so low? After 6 months of service, I’d favor giving full-time employees 25% off store brands and 20% off everything else. Sure, there’s danger in reselling, but stores can limit the amount of total purchases per week. Most likely, HR and IT don’t want the hassle of tracking yet another employee program, but that’s no reason to under-appreciate employees.
What advice can I give consumers? First, before going to a store, download the store’s app. Sometimes, the app has deals not listed on the website, and Target’s app is excellent for discounts. Also, while not always accurate, you can check whether a particular store has many or fewer of the items you want. (The failure of 100% accuracy in the backroom muddles the usability of floor numbers.) Second, please put your cart in the right place in the parking lot. If stores keep losing carts or seeing cart damage to vehicles, eventually they’ll start charging a nominal, refundable amount to use them. Plus, it’s good manners.
By now, you may have an inkling why Amazon is so successful. By the time a “traditional” store figures out the logistics of stray shopping carts, food kiosks, slip and fall insurance, proper staffing levels in each department, the in-store Starbucks, the backroom, the sales floor, and a million other things that ensure you, the customer, are happy and safe, Amazon is already ahead because they’ve eliminated every non-essential piece of the retailing experience. Though I’ve never seen an Amazon center, if you work in any brick-and-mortar store’s backroom, you will understand any retail organization set up to deliver products directly from your hands to the customer will win. For Amazon, the backroom *is* the retail experience, which makes sense because that’s where the action is. All that stuff outside? Fluff and show. Costco knows it, too, which is why they offer free food samples to make your experience in a warehouse seem more interesting.
Think about Costco’s warehouse design. Is it set up like traditional retail, or is it one massive backroom? Those wide aisles within a grid system? Perfect for delivering heavy crates and pallets of products anywhere in the store. Next time visiting Costco, look up — you’ll see lots of boxes waiting to be delivered, but one shelf down, not throughout a two-story building with different-sized shelves. Why boxes? Because taking items out of original packaging takes time (remember my broken fingernail?), and it’s one reason backroom inventory becomes corrupted. (Is the bar code on a package for one item or the entire set? If you have ten seconds to decide, you’re not always going to be right.) Though I met my fulfillment targets at Target, I’m not sure I could do the same at Costco, where much of the lifting is done by skilled drivers. Within Costco’s unique system, I can see the benefits of unions for both employees and employers.
So now what? Once employers realized theft resulted primarily from employees, not customers, it was only a matter of time before “backroom economics” and surveillance took over American retail. In some ways, Minneapolis-based Target’s dilemma is similar to all of America’s: can it adapt and change to stay relevant, or will it be left behind? Personally, I hope to see the familiar red target logo for many more years. If Target Corporation and other anchor tenants fail, the alternative will be a world of Borg-like cube warehouses using RFID and machines to locate, sort, and deliver products while humans look on passively. Will malls be assimilated into our modern-day techopoly? Will AI and GPS capabilities continue to outshine less predictable customer service? It all depends on whether city councils and real estate developers discover more dynamic ways to do business. So far, America’s physical and political landscape appear inhospitable to meaningful change, but that is no cause for pessimism; after all, the course of true change ne’er did run smooth.
© Matthew Mehdi Rafat (2020)
Disclosure: at the time of publication, I own mutual funds and ETFs which most likely own shares in several companies mentioned herein, but none of my holdings, including individual stocks, are substantial enough to warrant overt bias.
Disclaimer: I am not affiliated with Target Corporation in any way, shape, or form. All opinions herein represent my own, and I haven’t disclosed any information you can’t see yourself if you peek through nondescript doors in any large Target store.
Originally published at https://willworkforjustice.blogspot.com.
