New York Attorney General Eric Schneiderman took a curtain call on Aug. 26, saying that his office successfully pressured several chains including Gap, Victoria's Secret and Abercrombie & Fitch, to abandon on-call shifts — chain-wide, and not just in New York state. The AG is still pushing several other chains — including Target, JCPenney and TJX (which owns T.J. Maxx, Marshalls, HomeGoods, Sierra Trading Post, Winners and other chains) — to also back off.
But these retail reversals could have far-reaching implications for retail software that uses in-store traffic to make close to real-time decisions about how many people are needed in the store for the next shift, in four or five hours. The AG's problem with on-call shifts is that workers can be canceled at the last minute.
Guess what: That's a huge part of the ROI argument to get chains to invest in the software in the first place. The alternative is to use historical buying patterns to make staffing decisions days and usually weeks in advance.
Put another way, if you have to lock in on staffing levels a week or more in advance, what's the big benefit of analyzing your traffic minute to minute? Beyond the license fees and the cost of integration, the biggest cost of these packages is your people's time to review the results and make staffing decisions. Hence, the fallout from chains backing off on-call shifts will hit hard on staffing software predictive analytics and could be a financial change for the chains themselves.
I doubt that Schneiderman's office factored in the software implications of this pressure campaign, but it might end up reallocating some dollars.
Please don't get me wrong. This change will absolutely cost the retailers in terms of both revenue and margin. Those predictive packages actually worked and generally worked quite well. But to be candid, it was balancing the books on the backs of the employees. Workers were expected to clear their schedules. If they weren't needed, they would get no money.
Workers were typically not in a position to say, "Me no think so. If you want me to clear my schedule from 1 to 9 p.m. on Saturday, you're going to have to buy that chunk of time from me." That's why the AG weighed in, giving voice to workers who couldn't speak up for themselves.
But the analytics worked. When a storm moved in — or, for that matter, a predicted storm shifted direction and did not come in — suddenly the aisles could get a lot more crowded than expected. More workers means shorter lanes and a better shopping experience.
If the reality, though, is that on-call shifts are going away, you really want to re-evaluate those real-time store traffic analytics licenses. It may be a small consolation, but every dollar counts.
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