July 19, 2025 • 40 mins
Retail businesses face a productivity paradox where despite working harder and implementing efficiency measures, many find themselves "sprinting to stand still" as costs rise and operations grow more complex. Simon Hedaux from Rethink Productivity provided NotebookLM with his thoughts and insights into navigating this challenging landscape through systemic changes rather than incremental tweaks.
Rethink Productivity provides crucial insights into navigating this challenging landscape through systemic changes rather than incremental tweaks.
• All easy efficiency changes have already been implemented in retail
• Labour costs are projected to increase significantly, with UK National Living Wage rising 40% over five years
• The shrinking pay gap between frontline staff and supervisors creates talent retention challenges
• Rising theft presents a security dilemma that often creates additional work for staff
• Technology must drive standardized processes to remove subjective decisions
• Self-checkout changes staff roles rather than simply reducing headcount
• Process optimization should follow "stop, reduce, then digitize" methodology
• Radical rethinking includes questioning traditional management structures
• Businesses need granular understanding of their true end-to-end operational costs
• Productivity improvement requires continuous analysis, adaptation and validation
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Okay, let's unpack this.
Imagine a marathon runner whois trained relentlessly, you
know, shaved off every possiblesecond, only to find the finish
line keeps moving further away.
That's the feeling manybusinesses, especially those in
retail, seem to have right nowwhen it comes to productivity.
Today, we're embarking on adeep dive into precisely that
challenge the future of retailproductivity.
(00:21):
We're drawing some reallyincisive insights from a
groundbreaking strategic reportRetail Productivity 2025, by
Rethink Productivity.
Our mission for you, thelistener, is to well cut through
the noise, understand thecrucial, often counterintuitive
shifts and opportunities facingretail right now and, perhaps
most importantly, see how thesefundamental lessons about
(00:41):
efficiency, cost management andinnovation extend far beyond
just stores.
This isn't just for retailinsiders.
It's really about the broaderprinciples of navigating a
relentlessly evolving landscapethat apply to well pretty much
any organization.
We've got sharp data points andsome truly forward-thinking
scenarios to explore, so getready for a thorough and,
hopefully, thought-provokingjourney.
Speaker 2 (01:02):
It's a really apt analogy, actually, and one that
resonates deeply within thecurrent economic climate.
This report from RethinkProductivity.
It offers a remarkably clearlens into what businesses are
grappling with.
It immediately sets the scenestating everyone is facing this
productivity challenge.
That phrase alone tells us agreat deal about the current
economic and operational climate.
(01:22):
It signals a universal pressureright, a shared struggle that
transcends specific industriesbut arguably impacts retail most
acutely, given its razor-thinmargins, and that direct, highly
visible consumer interaction.
This isn't a localized issue.
It's systemic, a pervasiveforce driving strategic
conversations at well everyexecutive table.
Speaker 1 (01:42):
Yeah, absolutely.
And when it comes to whatbusinesses are being asked by
their stakeholders and theirbalance sheets, the report cuts
right to the chase Help us savemoney.
Now, that's hardly a novelrequest in the business world,
is it?
But Rethink Productivity makesa crucial observation that truly
defines the current landscape.
They contend that retailershave already made all the easy
changes.
Hmm, that simple sentencecarries a profound weight.
(02:03):
Think about that for a second.
The they contend that retailershave already made all the easy
changes.
Hmm, that simple sentencecarries a profound weight.
Think about that for a second.
The low-hanging fruit, theobvious cost-cutting measures,
the straightforward processimprovements, the incremental
efficiencies that once offeredeasy wins, they're gone.
What does it truly mean for anorganization when you've already
picked all the easy fruit fromthe tree?
Speaker 2 (02:22):
Well, it fundamentally reshapes the
entire approach to efficiency.
It has to.
When the low-hanging fruit isgone, finding new efficiencies
is dramatically harder, far morecomplex, and it often requires
a fundamental re-evaluation, ifnot a complete overhaul of
operations.
It's no longer about trimmingfat, it's about reshaping the
very muscle and bone of thebusiness.
You're moving beyond simpletweaks to seeking systemic
(02:50):
changes, often technology-driven, to unlock that next level of
savings.
And, as the report highlights,these pressures aren't solely
internal, not by a long shot.
Customer behavior itself isdriving massive change.
The seismic shift to onlineshopping, the pervasive demand
for instant gratification, theincreasing preference for
self-service options thesearen't just passing trends.
They're creating entirely newoperational complexities and,
frankly, significant costs forretailers.
(03:11):
Think about the intricate danceof fulfilling online orders
from physical stores, managingcomplex returns across channels
or accommodating the surge inclick-and-collect services.
These all add layers of tasksand processes that just didn't
exist in the same volume before.
Speaker 1 (03:25):
It's not just a constant adaptation game, it's a
constant reinvention game,wouldn't you say?
And then, on top of all theseexternal and internal pressures,
rethink.
Productivity points to anothersignificant internal drain that
impacts profit the profit impactfrom theft.
This connects directly tobroader operational challenges.
How do you, as a retailer,strike that incredibly delicate
(03:48):
balance between securing yourassets, preventing loss, and
simultaneously facilitating asmooth, welcoming and efficient
sales environment?
Every security measure, everylocked shelf, every tag can
potentially add friction for thecustomer, increase dwell time
or, crucially, create additionalwork for the staff.
It's a delicate balance, andtheft directly erodes
profitability, making theproductivity challenge even more
(04:10):
acute.
It's like a hidden tax on everysingle transaction.
Speaker 2 (04:13):
Exactly and given these multifaceted pressures,
the central objective for 2025,as defined with remarkable
clarity by Rethink Productivityis crystalline to reduce task
and process time.
This isn't merely a suggestion.
It's identified as the criticallever.
The why behind this is profoundit's to free up valuable human
resources and eliminateoperational drag.
(04:33):
Every minute saved in aback-end task, every redundant
step eliminated from a process,is a minute that can be
reinvested into higher valueactivities.
It's about optimizing the flowof work, making every action
count and ensuring that humaneffort is directed where it
yields the greatest returnrather than being consumed by
inefficiency.
Speaker 1 (04:52):
And from this core objective, the report breaks
down several strategic goalsthat really resonate.
First, they talk aboutincreased customer time.
This is fascinating because itimmediately shifts the focus.
It goes from simply cuttingcosts to driving actual value.
It's not just about gettingtasks done faster.
It goes from simply cuttingcosts to driving actual value.
It's not just about gettingtasks done faster.
It's about what that speedenables.
Right, If you streamline yourbackend tasks, everything from
(05:12):
stocking shelves to managingdeliveries it means your staff
suddenly have more time, moretime to spend meaningfully
interacting with customers onthe floor.
It's about quality overquantity in customer
interactions, empowering staffto provide better service,
helping customers find exactlywhat they need, solving problems
proactively and, ultimately,building deeper loyalty.
It's a tangible translation ofefficiency into enhanced
(05:34):
customer experience.
Speaker 2 (05:35):
Precisely.
The goal isn't just fasterprocesses, but processes that
enable a demonstrably betterservice and stronger customer
relationships.
Then they highlight theobjective to increase capacity
at peak.
This is the perennial, almostexistential challenge for any
retailer, isn't it?
How do you handle surges indemand during holidays, major
sales events or even just busyweekends without overwhelming
(05:56):
staff, without leading to longlines, lost sales opportunities
or a consistently poor customerexperience?
The report emphasizes thatsophisticated productivity
analysis helps businesses managethese peaks more effectively by
understanding where bottlenecksoccur and how to dynamically
optimize staffing levels andprocesses to avoid them.
It's about building elasticityinto operations.
Speaker 1 (06:18):
And linking efficiency directly to revenue
growth.
Rethink Productivity emphasizesthe goal to drive ATV, or
average transaction value, whichessentially means selling more
to the same customers.
This objective truly brings itall together, closing the loop
between operational efficiencyand commercial success.
When your processes areoptimized and staff are freed up
(06:38):
from those non-value-add tasks,they can genuinely focus on
sales opportunities.
They can upsell, cross-sell,provide personalized
recommendations and genuinelyengage with customers to
increase the average transactionvalue.
It fundamentally shifts thefocus from just processing
transactions to actively drivingrevenue and maximizing customer
lifetime value.
Speaker 2 (06:57):
It's about precision.
Really, rethink Productivityeffectively uses an image in
their report a target with anarrow hitting the bullseye.
It underscores that theseobjectives aren't just vague
aspirations but preciselytargeted goals.
It's about hitting the markwith both efficiency and impact,
ensuring every effortcontributes directly and
measurably to these strategicoutcomes.
(07:18):
It's a testament to the kind ofcomprehensive insights you can
find on the Rethink Productivitywebsite and certainly their
podcasts.
They're always about actionable, targeted strategies.
Speaker 1 (07:28):
But if you don't hit that target, the risks are
substantial.
Boy are they substantial.
The report paints a stark,almost alarming picture,
describing businesses as runningsprinting to stand still.
This is a profound paradox thatimmediately grabs your
attention.
It suggests that, despiteconcerted efforts to reduce task
and process time and increaseoutput, these actions can
(07:49):
ironically lead to more timegoing into non-value-add
activities.
So you're working harder,investing more, but not
necessarily smarter or moreeffectively.
What exactly does non-value-addNVA truly mean in a retail
context, and why is it so well,insidious?
Speaker 2 (08:04):
Right.
Nva tasks are activities thatconsume valuable resources, time
, labor, materials, even mentalenergy without directly
contributing to customer valueor enhancing profit.
To give you some concreteexamples, imagine a staff member
spending 20 minutes searchingfor a misplaced item because the
stockroom is disorganized, orconstantly correcting inventory
(08:24):
errors due to poor data entry,or filling out redundant
paperwork that serves no clearpurpose and, just you know, sits
in a folder somewhere.
These are all NVA activities.
They don't enhance the customerexperience, they don't directly
generate revenue and theycertainly don't build the brand.
The insidious paradox is thatif you simply try to speed up
existing processes without firstrigorously identifying and
(08:46):
eliminating these N NBA tasks,you're just accelerating waste.
You're literally building afaster treadmill for your staff
to run on, but they're still notmoving forward.
Speaker 1 (08:54):
And the costs of this inefficiency, compounded by
external pressures, areescalating rapidly, according to
Rethink Productivity.
Let's delve into the alarmingcost pressures outlined in the
report.
First, labor costs.
The European Commissionforecasts up to a 6% increase in
2025.
And specifically for the UK,the National Living Wage, nlw,
is projected to increase by asubstantial 6.7% in April 2025.
(09:17):
That takes it to £12.21 perhour, or approximately £25,400
per year for a full-timeemployee, or approximately
£25,400 per year for a full-timeemployee.
To put that into perspective,consider this From April 2020,
when it was £8.72 per hour or£18,200 per year.
That's a whopping 40% increase.
A £7,200 pay rise in just fiveyears for a full-time employee
(09:39):
Wow.
And while this data is specificto the UK, it clearly poses an
implicit yet significantchallenge for businesses in
America and elsewhere.
It indicates a global trend ofrising labor expenses that
cannot be ignored.
Every business leader,regardless of their geography,
needs to look at their own P&Land ask how they're going to
absorb these shifts.
Speaker 2 (09:55):
Absolutely.
This isn't just about payingmore.
It's about the increasedfinancial burden on businesses
that are already operating onvery tight margins.
And the cost increases don'tstop there.
Employer national insurance, ni, in the UK is also set to
increase from 13.8% to 15% inApril 2025, with the threshold
dropping to £5,000.
For our non-UK listeners, thinkof NI as a mandatory
(10:17):
contribution employers make ontop of an employee's salary,
sort of like a payroll tax.
This is a direct, substantialimpact on a business's overhead
as it adds another layer of costfor every single employee they
have.
It's a compounding effect thatsqueezes profitability from
multiple directions.
Speaker 1 (10:32):
And the final piece of this complex cost puzzle, as
highlighted by RethinkProductivity, poses a truly
concerning question Lesscolleagues on the floor equals
higher risk.
This links directly back to theearlier mention of profit
impact from theft.
If retailers respond to theserising labor costs by simply
reducing staff presence on thesales floor, a seemingly
(10:53):
straightforward way to cutimmediate expenses, they might
inadvertently exacerbate theproblem of shrink and theft.
It creates a challengingfeedback loop.
Trying to save money on labormight lead to higher losses from
theft, forcing even moredifficult decisions down the
line and potentially underminingthe very cost savings they
sought.
It's a classic example ofunintended consequences, isn't
(11:14):
it, where a seemingly rationaldecision in one area creates a
new, equally significant problemin another.
This is the kind of intricatedilemma the Rethink Productivity
podcast often unpacks in detail.
Speaker 2 (11:25):
It really is, and that takes us perfectly into the
human capital dimension, whatRethink Productivity
provocatively frames as the Mindthe Gap Challenge.
It's a problem that extends farbeyond the immediate payroll
figures.
Speaker 1 (11:36):
Here's where it gets really interesting and, frankly,
a bit uncomfortable for someorganizations.
Rethink Productivity discussesthe significant ripple effects
of increased frontline colleaguepay.
It's not just the direct costof higher wages for the
frontline staff.
It's about how this impacts theentire compensation structure
within a retail organization.
This crucial challenge acrosscolleagues, supervisory and
(11:58):
management pay differentials.
Speaker 2 (12:10):
Let's look at the precise data from the report.
Frontline colleague pay isrising significantly from eight
pounds 72 per hour in April 2020to a projected 12 pounds 21 per
hour by April 2025.
As we just discussed, that's asubstantial jump approximately a
£70,200 pay rise for afull-time employee over five
years.
Now compare that to the averageretail supervisory pay which,
(12:32):
according to Glassdoor datacited in the report, is
estimated at £28,100 in November2025.
Speaker 3 (12:38):
Okay.
So let me get this straight.
If a frontline colleague ismaking £25,400 a year and their
direct supervisor is making only£28,100.
That's a pretty narrow gap,isn't it?
Just over £2,700 difference.
Imagine a career ladder wherethe rungs suddenly get closer
and closer together as you gohigher up.
Does this still feel like aclimb worth making?
Does that relatively small paybump provide enough incentive to
(13:00):
take on the added stress?
The increased responsibility,the longer and often less
flexible hours and themanagement of people that come
with the supervisory or deed ofmanagement role is a very real
motivational challenge.
Speaker 2 (13:09):
It creates a significant issue for talent
attraction and retention at alllevels A huge one.
If the financial incentive foradvancement isn't compelling
enough, who will step into thosecritical supervisory and
management roles, the roles thatare so essential for
operational stability and growth?
Retail already faces challengeswith high turnover, and this
issue of compressed pay scalescan severely exacerbate it,
(13:31):
making it harder to build andmaintain experienced leadership
teams, which in turn, inevitablyimpacts overall productivity,
morale and service quality.
It's a complex dynamic thatrequires careful strategic
consideration beyond just thebaseline wage dynamic that
requires careful strategicconsideration beyond just the
baseline wage, extending tocareer paths, development and
non-financial incentives too.
The report really shines alight on this often overlooked
(13:52):
consequence of risingentry-level wages.
Speaker 1 (13:55):
OK, so we've set a challenging scene rising costs,
thin margins and a complex humancapital dilemma.
A bit bleak, but where are theopportunities?
Rethink Productivity offerssome truly compelling insights
into unlocking efficiency,particularly in process and
technology, that give us aroadmap forward.
Speaker 2 (14:12):
Yes, absolutely.
The report highlights a crucialoverarching point the
opportunity to understand thetrue cost.
This isn't just about theobvious direct costs of
operations, but about delvinginto the holistic, often hidden
expenses embedded within everyprocess and activity.
It encourages a much deeperdive into every single
operational layer.
Speaker 1 (14:31):
Let's break down some of the key areas for
optimization that RethinkPredictivity details in depth.
First, they talk about processcompliance and pace of work.
This emphasizes that it's notenough to simply have processes
documented they need to befollowed consistently and
critically.
Efficiently Makes sense.
Then a powerful concept Let thetech drive the process, remove
(14:53):
decisions and options.
What does that truly look likeon the ground?
It's about standardization,automation and significantly
reducing human error orvariability by taking subjective
choices out of repetitive tasks.
Think about a system where atask is automatically assigned
based on real-time data, orinventory levels automatically
trigger an optimized reorderwithout any manual intervention,
(15:14):
Removing the need for staff tomake discretionary choices that
might lead to delays or errors.
It streamlines decision making,or rather removes the need for
it entirely in some cases.
Speaker 2 (15:24):
It's about leveraging technology to enforce best
practices and remove thesubjective element wherever
possible, leading to predictableand efficient outcomes.
This leads directly to the nextpoint Understand the process
and cost end-to-end.
Why is a holistic end-to-endview, rather than just isolated
improvement, so crucial forachieving real impact?
(15:44):
Because optimizing just onestep in a broken operational
chain doesn't fix the wholechain to end view, rather than
just isolated improvement, socrucial for achieving real
impact.
Because optimizing just onestep in a broken operational
chain doesn't fix the wholechain.
It often just shifts thebottleneck somewhere else.
You need to map and understandthe entire flow, from receiving
goods in the backroom to thefinal customer transaction at
the till, to identify truesystemic inefficiencies and
their associated costs.
It's basically a complete valuestream mapping exercise.
Speaker 1 (16:05):
And this connects profoundly to the question how
much does it really cost toreplenish stock and how many
times?
This delves into the oftenhidden labor, energy and
logistical costs involved inmoving products from the
warehouse to the shelf and thenpotentially back again if it's
overstocked.
We've all seen thedisheartening sorry this item is
out of stock sign on an emptyshelf, as vividly depicted in
(16:27):
the report's accompanyingvisuals.
That's not just a lost sale.
It's a symptom of inefficientreplenishment systems, a direct
cost of failure and a tangibleblow to customer satisfaction.
Speaker 2 (16:38):
And tying into that rethink, productivity, poses a
really bold, almost provocativequestion what is the cutoff when
you don't make profit?
Buyers responsible for shrinkand waste.
This is a fundamental challengeto traditional retail
structures.
It really is.
It suggests connectinginventory buying decisions
directly to the profitabilityand waste metrics, shifting
accountability directly to thebuyers.
(17:00):
The idea is to ensure thatwhat's purchased is not only
sold, but sold profitably,minimizing loss from theft,
damage or spoilage.
It's a powerful mechanism toensure inventory efficiency from
the very first decision point.
Speaker 1 (17:12):
Then there's the physical space itself, which is
often overlooked as aproductivity lever.
New stores refit are thelayout's optimum From a stock
storage, front end andcollection point of view.
This highlights how physicaldesign directly impacts
operational flow and efficiency.
A poorly designed store caninherently create non-value-add
tasks, just by the way staffhave to move, product access,
(17:33):
stock or process customerinteractions.
Optimizing the physical layoutcan significantly reduce wasted
time and effort.
Seems obvious, but maybe oftenmissed.
Speaker 2 (17:42):
Oh, definitely.
And Rethink Productivity pointsto specific cutting-edge
technologies that are poised todrive these improvements,
offering tangible examples.
First, computer vision focalsystems.
This technology, leveragingadvanced camera systems and AI,
can provide real-time granularinventory tracking, identify
out-of-stocks the moment theyoccur and ensure shelf
(18:04):
compliance without any manualchecks.
Imagine a store where camerasconstantly monitor shelves,
instantly alerting staff when aproduct is running low or a
display is disheveled,eliminating the need for tedious
manual counts or visualinspections.
Then there's Easel Plus, that'selectronic shelf edge labels
with picking functionality.
Like pick-to-light systems,these systems streamline order
(18:25):
fulfillment, whether it's forin-store picking, for online
orders or click-and-collect.
Think of a warehouse or even astore backroom where lights
illuminate the exact binlocation of an item needed for
an online order, guiding staffthrough the most efficient pick
path, significantly cutting downsearch time.
And finally, qr codes and NFCnear-field communication.
These have myriad applications,from simplified inventory
(18:46):
management providing instantproduct information to customers
via their phones orfacilitating seamless tap-and-go
customer interactions.
These aren't just futuristicconcepts they're here and
they're transforming theback-end and front-end alike.
Speaker 1 (19:00):
But it's crucial to remember, as Rethink
Productivity also notes, it'snot just about the tech.
The human element is stillparamount and profoundly
impactful.
They make the intriguingobservation that when a task is
completed impacts pace,efficiency, time of day and or
time to end of shift.
What does this suggest aboutmotivational factors, fatigue or
perhaps even strategicscheduling influencing
(19:22):
productivity?
Perhaps completing certain highconcentration tasks earlier in
the day, when energy is higheror before a major rush, could
yield significantly betterresults?
Seems logical.
And then the crucial link thatcannot be overstated there is a
link between colleague tenure,turnover and productivity.
This is vital.
Retaining experienced,knowledgeable staff can lead to
(19:43):
significant, tangible gains inefficiency, reduce ongoing
training costs and foster a moreknowledgeable, empowered and
ultimately productive workforce.
Their institutional knowledge,their understanding of nuances
and their establishedrelationships with customers are
invaluable assets that directlyimpact output.
Speaker 2 (19:59):
These observations powerfully underscore that while
technology is an indispensableenabler, the human factor
remains paramount Absolutely.
It's about optimizing thesynergy between technology and
human capabilities.
This focus on efficiencyextends right to the consumer
experience with RethinkProductivity's insights on
reinventing the retail front end, not just tills.
Speaker 1 (20:22):
That's right.
Rethink Productivity highlightsa significant opportunity for
holistic front end change,moving far beyond just the
traditional checkout till as thesole point of interaction.
Speaker 2 (20:41):
We're seeing a fundamental, irreversible shift
in how customers expect tointeract with retail.
The report details these shiftsin customer interactions
Increasing self-scan andself-pay transactions.
Okay, the benefits forretailers are clear Increased
speed, reduced labor costs andoften a perception of
convenience for the customer.
But there are also challenges.
Customer adoption rates varysignificantly, security concerns
around theft can rise and, aswe'll discuss, potentially
unintended consequences likeincreased work for staff in loss
prevention roles or the needfor more customer assistance.
(21:04):
Naturally, this shift leads tofewer colleagues at TILS, which
fundamentally impacts staffingmodels.
It necessitates remaining staffto be more versatile, acting as
mobile problem solvers ratherthan static cashiers.
Speaker 1 (21:15):
And e-commerce integration is placing entirely
new, sometimes unexpected,demands on the front of the
store increasing click andcollect and third-party parcel
volumes.
This brings new logisticalburdens right to the customer
service desk managing pickups,processing returns and handling
third-party deliveries andoutgoing parcels.
It's a whole new, significantset of tasks for store staff
(21:36):
that requires optimizedprocesses and often dedicated
space.
But even with all thisautomation and integration, the
human element stubbornly remainscrucial.
The report wisely reminds usthat staff still need to handle
refunds, queries, etc.
These are the complex, oftenemotionally charged exceptions,
the problem-solving scenariosthat simply cannot be automated.
They require humanproblem-solving skills, empathy
(21:58):
and judgment.
Speaker 2 (21:59):
And thinking boldly beyond the traditional store
model.
Rethink Productivity exploresradical ideas for rethinking
product access.
They pose the idea Sell stockthat must be behind a screen or
to fill empty boxes vending.
This explores the concept ofunintended retail for certain
product categories, reducing theneed for staff to manage those
items directly while stillmaking them accessible.
(22:21):
Similarly, for serviceaugmentation, they challenge us
to consider how AI could assistfor services that require a
person lottery, age, approval,etc.
Ai, while AI could help verifyidentities or process initial
requests with speed, humanapproval is still necessary for
regulated services, highlightingwhere human judgment remains
critical and where technologyaugments rather than replaces.
Speaker 1 (22:42):
And a fascinating technology mentioned with vast
potential for retail is openbanking.
This isn't just about fasterpayments.
It has the potential for trulyseamless payments, integrating
loyalty programs directly at thepoint of sale or even
incorporating broader financialservices directly into the
retail experience.
Imagine a customer walking intoa store, making a purchase and
(23:05):
their loyalty points areautomatically applied.
Their preferred payment methodis ready with a single tap and
perhaps even a personalizedfinancing option pops up, all
seamlessly integrated Becausetheir bank account and the
retailer's system are securelyand pre-approvedly talking to
each other.
It streamlines transactions andopens up new avenues for
customer engagement.
But ultimately, rethinkproductivity acknowledges the
(23:26):
core frustrating struggle formany retailers, many struggling
to optimize for now withflexibility for future change.
This highlights the immensedifficulty of building agile
systems and processes in alandscape that's evolving at
breakneck speed.
It's like trying to fix the carwhile you're driving it down a
rapidly changing road Not easy.
Speaker 2 (23:45):
Not easy at all.
Building on that challenge,Rethink Productivity doesn't shy
away from provocative ideas.
They really don't.
They encourage what they callcreative thinking, using the
classic lightbulb image in theirreport as a powerful metaphor
for sparking radical new ideas.
Speaker 1 (24:00):
So what does this all mean for radical change?
They dare us to ask what wouldhappen if?
And then pose some trulyaudacious, deeply uncomfortable
questions that challengelong-held retail paradigms.
Speaker 2 (24:12):
These are not incremental tweaks.
These are fundamentalchallenges to long-held retail
norms, designed to ignite trulytransformative thinking For
rethinking management andstructure.
They ask there wasn't a storemanager in every store.
This implies exploring newmodels like cluster management,
where one manager overseesseveral smaller stores, or
(24:32):
sophisticated remote management,or even self-managing teams
enabled by advanced technologyand transparent data.
Then, pushing the envelopefurther, offices were closed.
Other than interviews anddisciplinaries.
This suggests a radical shifttowards more on-the-floor
presence for managers andsupervisors, with administrative
work handled remotely orcentralized, freeing up valuable
(24:52):
store space and leadership time.
Speaker 1 (24:55):
And colleagues worked across multiple stores and been
on local shifts.
That's radical flexibility forstaff, right Allowing for
optimized labor allocationacross a wider geographic area
based on demand, potentiallyfostering a stronger community
engagement among staff andproviding employees with more
control over their schedules.
Interesting, then, forefficiency in regional
(25:15):
management field visits wereconducted 50% of the time via
technology.
This dramatically reducestravel time and costs for
regional managers, freeing themup for more strategic
data-driven tasks rather thansimply being on the road.
And to reduce communicationoverload, a perennial pain point
for store teams.
They ask Head office couldn'tcontact mill stores other than
via one approved portal onselected days.
(25:36):
Imagine the drastic reductionin distractions and fragmented
communication for store staff,allowing them to focus entirely
on customers and core operations.
That's a big one.
Speaker 2 (25:45):
Huge and streamlining operations and compliance
offers equally bold and franklyliberating ideas.
You stopped completing all thechecklists other than legally
required ones.
This suggests a ruthlesselimination of unnecessary
administrative burdens,bureaucratic tasks and redundant
paperwork that consume valuablestaff time without adding
significant value.
(26:05):
Promotions were simpler andless more frequent.
This addresses the significantmerchandising effort and
complexity involved in constantintricate promotional changes
that often drain store resources, in constant intricate
promotional changes that oftendrain store resources.
Then the logistical challengeof overstock.
You could send bulk overstockback to the DC distribution
center.
This improves inventory flow,reduces the need for valuable
in-store storage space andminimizes the risk of obsolete
(26:28):
stock gathering dust.
Speaker 1 (26:29):
And related to that, for optimizing deliveries.
Deliveries were less frequent,with flexibility and planograms.
This proposes optimizinglogistics and reducing the labor
required for receiving andstocking by having fewer larger
deliveries and allowing for moredynamic shelf planning For
perishable goods a critical areaof waste Better forecasting of
hot food to grow sales and zerowaste.
(26:51):
This is about leveraging AI andadvanced analytics for
real-time demand prediction foritems like bakery or deli
products, minimizing spoilageand maximizing freshness, and a
truly cutting-edge concept thatties into broader digital
transformation.
You had digital twins live forevery store.
Imagine a virtual, real-timereplica of every store, allowing
for powerful simulation oflayout changes, staffing levels,
(27:12):
customer flow and processoptimizations before any
physical changes are made.
Speaker 2 (27:20):
Wow.
The radical stock managementideas are particularly
eye-opening, challenginglong-held beliefs about
inventory no stock counting,relying entirely on technology
like RFID or advanced computervision for perpetual real-time
inventory accuracy, eliminatingthe highly labor-intensive and
often disruptive manual counts.
Then a shift in aestheticexpectations.
Senior leaders accepted storesshouldn't be 100% phased all the
(27:41):
time.
This is a fundamental change inpresentation standards to
prioritize efficiency overabsolute constant, perfect
visual merchandisingControversial maybe.
Pushing that further, they askyou only phase up for one hour
per day.
That's an extreme vision forvisual merchandising efficiency,
focusing staff time onhigher-value tasks.
Speaker 1 (27:58):
And adopting a truly lean approach, Only replenish
when needed.
A just-in-time approach tostock on the floor, Reducing
overstocking, minimizinghandling and freeing up backroom
space For slow-moving itemsthat take up valuable real
estate.
Slow sellers delivered assingles then discontinued.
Minimizing dead stock andoptimizing shelf space for more
profitable items and for displayefficiency.
(28:20):
Displays were all originalouters, no singles, which
drastically reduces labor fordisplay setup and presentation,
focusing on speed and simplicity.
Speaker 2 (28:28):
Automation of customer-facing and back-end
services also featuresprominently.
Induction was done in under twohours by AI.
This envisions rapid,standardized and highly
efficient onboarding for newemployees, getting them
productive much faster.
Self-service post office,expanding unattended services
within retail spaces, leveragingexisting footfall for new
revenue streams.
(28:49):
Dynamic pricing for hot food,real-time price adjustments
based on demand, time of day ornearing expiration, maximizing
sales and minimizing waste forperishable items.
Speaker 1 (29:00):
And thinking creatively about underutilized
space.
Use spare space for thecommunity local produce
providers.
This is an innovative idea forrevenue generation and deeper
community integration, turningdead space into a vibrant hub.
I like that More tech-drivenefficiency, auto-beat checking
for product freshness andcompliance, reducing manual
(29:21):
checks and ensuring food safety.
Outsource cash accounting,leveraging specialist third
parties for back officeefficiency and security, freeing
up in-store staff from tediousfinancial reconciliation.
And a benefit for employeesthat can also offer a tax
advantage Salary sacrifice,which are employee benefits that
can offer tax advantages toboth the employee and,
(29:41):
potentially, the employerwithout direct cost to the
employer.
Speaker 2 (29:52):
These are the kinds of forward-thinking discussions
you'll often find on the Rethink.
Productivity is also clear-eyedand pragmatic about the
unintended consequences,particularly concerning loss
prevention, work creation.
They highlight that everyaction has a reaction.
It's critical to remember that.
Speaker 1 (30:05):
This is a critical point and Rethink Productivity
provides direct visual cues intheir report Images of security
tags, locked shelves and itemsbehind full glass doors like
toothpaste or razors.
We've all seen that the paradoxhere is striking.
Efforts to prevent theft bylocking up high-value or easily
pilfered items can inadvertentlycreate significantly more work
(30:28):
for staff and dramatically slowdown the customer experience.
Think about it A customer hasto actively find a staff member,
wait for them to unlock acabinet and then potentially
wait for them to escort the itemto the checkout.
This adds layers of friction,significantly slows down service
, requires additional staffassistance and creates
frustration for the customer.
It's a trade-off that needsincredibly careful consideration
(30:51):
.
Is the cost of preventing thattheft, factoring in the lost
sales from frustrated customers,plus the increased labor and
decreased customer satisfaction,truly less than the cost of
preventing that theft, factoringin the lost sales from
frustrated customers, plus theincreased labor and decreased
customer satisfaction, trulyless than the cost of the theft
itself?
It's a genuine catch-22, adilemma that businesses are
grappling with every single day.
Speaker 2 (31:05):
It absolutely is.
Every security measure, whilemitigating one risk, can
introduce another in the form ofoperational inefficiency,
reduced sales and customerfrustration.
Inefficiency, reduced sales andcustomer frustration.
It powerfully highlights theneed for a truly holistic view
of productivity, where you weighthese complex factors against
each other and to help navigatethis intricate landscape,
rethink Productivity offers aconcrete productivity roadmap
(31:28):
with immediate actionableopportunities for retailers.
Speaker 1 (31:31):
Let's guide our listener through these
actionable strategies, becausethis is where the rubber meets
the road.
The first point on the roadmapis task management reinvention
stop, reduce, then digitize, egcompliance audits.
This order is absolutelycrucial, isn't it?
It's a powerful principle.
Don't automate a broken process.
First, rigorously identify andeliminate unnecessary tasks the
(31:52):
NVA tasks we discussed.
Then simplify the ones thattruly remain, making them as
lean and efficient as possible.
Only then should you considerdigitizing them.
This prevents simply speedingup inefficiency and cementing
bad habits into your systems.
Speaker 2 (32:06):
It's a foundational principle for any true
transformation.
If you digitize a redundanttask, you've just made waste
more efficient.
Basically, the second pointaddresses physical space
optimization, optimizing storage.
Storage is often inefficientand in a poor spot.
Lockers can be in the car park.
This encourages truly creativeout-of-the-box solutions for
(32:27):
back-of-house efficiency andstock accessibility, thinking
beyond traditional, oftencramped stock rooms.
Speaker 1 (32:33):
Then a clever strategic insight leveraging
footfall drivers.
Parcels drive footfall.
Yeah.
How can retailers capitalize onthe significant traffic
generated by services likeparcel pickup or drop off people
who are already walking intotheir stores to encourage
additional sales?
It's about converting thatincidental footfall into
intentional purchasing andrevenue.
Speaker 2 (32:52):
Point four addresses redistributing labor Move task
to colleagues Likely to have tomove tasks to keep people busy
when there must be two in storefor safety, extra colleagues to
do delivery and then colleaguesnot occupied later.
This highlights the criticalneed for flexible staffing
models and extensivecross-training to balance safety
requirements with productivity,ensuring staff are utilized
(33:22):
efficiently throughout theirshifts even if and as
self-checkout rises toprominence, the fundamental
question becomes what is thestaffing model?
Speaker 1 (33:28):
with rise of SGO, rethink productivity
acknowledges that whileself-checkout reduces the need
for traditional till operators,it doesn't eliminate the need
for staff entirely.
It necessitates staff forassistance, for security
monitoring, for age verificationand for addressing a variety of
customer service tasks,fundamentally changing the
nature of front-end roles ratherthan simply reducing headcount.
Speaker 2 (33:50):
Automating administrative burden is another
monumental opportunity.
Automate task planning andadmin for stores.
This is about leveragingtechnology to freeate task
planning and admin for stores.
This is about leveragingtechnology to free up store
managers and supervisory stafffrom mundane, time-consuming
administrative duties, allowingthem to redirect their focus
towards high-value activitieslike leadership development,
direct customer engagement,sales coaching and strategic
(34:12):
planning.
Speaker 1 (34:12):
And a major theme we've touched on repeatedly more
stock than needed, whichcreates double triple handling.
How to move closer to just intime for stock?
This is about the profoundbenefits of reducing excess
inventory-less handling time,less storage space required,
reduced risk of shrink orobsolescence and improved cash
flow.
It's about supply chainsynchronization.
Speaker 2 (34:34):
Point nine explores diversifying business units
pharmacy, funeral, travel,coffee shops, etc.
This encourages retailers tothink beyond their core offering
.
How can they strategicallyintegrate other business units
or services to leverage theirexisting retail footprint and
staff more efficiently, creatingnew revenue streams and
increased footfall from existinginfrastructure?
It's about maximizing the valueof every square foot.
Speaker 1 (34:56):
And finally, point 10 , which really brings it all
together as a continuous journeyRegular efficiency studies to
refresh and create ideas,validate process change.
Example full impact of UberEats model integrity, funding V
output.
This stresses that productivityis not a one-time fix or a
project with a defined end.
It's an ongoing journey,continuous cycle of improvement.
(35:18):
It requires constant analysis,adaptation and rigorous
validation of changes to ensurethey are truly yielding results
and delivering on their promisedoutcomes.
The world doesn't stand stilland neither can your
productivity strategy.
This is a point frequentlyemphasized on the Rethink
Productivity podcast,underscoring the need for
ongoing analysis.
Absolutely, it has to becontinuous.
(35:39):
So what does this all mean whenwe bring it back to the core
insights from RethinkProductivity?
The report's summary pointsaren't just conclusions.
They are a manifestounderscoring the urgency and
fundamental complexity of theproductivity challenge facing
retail and, frankly, mostindustries today.
Speaker 2 (35:53):
The first and perhaps most profound statement is all
the easy stuff is done.
This isn't just a casualobservation or a lament.
It's a stark, undeniablereality that demands a
completely new level ofstrategic thinking and courage
from retail leaders.
Incremental adjustments, meretweaks to existing models simply
won't cut it anymore.
(36:14):
They just won't.
Speaker 1 (36:15):
And, intertwined with that, a challenging
inevitability Costs willcontinue to rise.
This isn't a forecast withuncertainty.
It's a foundational truth.
This means proactive,deep-seated, often disruptive
change isn't just a good idea.
It's an absolute necessity forsurvival and growth.
You can't simply hope thesecost pressures will disappear.
You have to fundamentally planfor and adapt to them.
Speaker 2 (36:38):
Then a critical operational, imperative Manage
change via the workload model toensure fair funding.
This emphasizes the importanceof balancing aggressive
efficiency targets with theabsolute necessity of supporting
staff.
It's about ensuring thatresources and staffing levels
truly align with the actualtasks that need to be done,
preventing burnout, maintainingmorale and optimizing output.
(36:59):
It's about marrying efficiencywith human sustainability.
Speaker 1 (37:02):
And the dual focus again, which can't be stressed
enough Drive ATV.
It's not just about costreduction as an isolated goal.
It's about actively growingrevenue through enhanced
customer interaction.
Productivity in this moderncontext isn't just about
reducing inputs.
It's about strategicallymaximizing outputs and value.
Speaker 2 (37:21):
Understand how much is cost to run the business.
This is a powerful call fordeep, granular, data-driven
insights into every singleaspect of operations.
You cannot truly optimize whatyou do not fully and precisely
understand.
It's about knowing the true,fully loaded cost of every
process, every product, everysquare foot of your operation.
Speaker 1 (37:41):
And the necessity of a structured, dynamic approach,
have a productivity roadmap.
This isn't about ad hoc fixesor reacting to the latest crisis
.
It's about a strategic,structured, long-term plan for
continuous improvement, Buildingagile systems that can adapt to
rapid market shifts.
Speaker 2 (37:56):
Point seven succinctly captures the ultimate
goal get the right work done bythe right role at the right
cost.
This encapsulates the optimalallocation of human capital and
technological resources,ensuring that tasks are
performed by the mostappropriate person or by the
most efficient technology at themost cost-effective point in
the process.
Speaker 1 (38:15):
And finally, a point that Rethink Productivity really
drives home, tying back to ourearlier discussion and serving
as a foundational principle forany transformation Stop NBA
processes, pre-digitization it'sthe essential foundational step
.
Rigorously eliminate wastebefore you automate, Otherwise
you're simply creating a faster,more expensive and more complex
(38:35):
way to do something thatfundamentally adds no value.
Its automation is an accelerantof efficiency, not an enabler
of embedded waste.
Speaker 2 (38:42):
The report truly highlights the sheer depth and
courage of analysis required tonavigate these challenges.
It really does.
It's not just about simpletweaks or superficial changes.
It's about a fundamentalre-evaluation of how retail
operates, from the physicalstore floor to the highest
levels of head office strategy.
It's clear why organizationsturn to Rethink Productivity for
(39:03):
these kinds of transformativeinsights, which you can delve
into further on their website,RethinkProductivitycom, or
through their dedicated podcast.
Speaker 1 (39:12):
What a comprehensive journey we've taken through the
Retail Productivity 2025 report.
From Rethink Productivity, it'sabundantly clear that the
future of retail, and indeedmany industries facing similar
pressures, hinges on how boldlyand strategically we tackle
these evolving productivitychallenges.
Speaker 2 (39:28):
Given that, as the report emphatically spades, all
the easy stuff is done and costsare undeniably going to
continue rising.
What's the single mostuncomfortable truth a retail
leader, or really any businessleader today, must confront to
truly secure their future?
It's that superficial fixes andincremental adjustments are no
longer viable.
(39:48):
They're just not.
They must move beyondshort-term cost-cutting to a
fundamental, often painfultransformation of their core
operating model, embracingradical ideas and critically
anticipating and mitigatingpotential unintended
consequences, rather than shyingaway from them.
Speaker 1 (40:02):
That's a powerful thought, a true call to action
and for you listening, weencourage you to reflect on this
.
How can you apply the stop,reduce, then digitize principle
to your own workflows, your ownprojects, even your daily tasks?
What's the unintendedconsequence?
You might be overlooking, inyour own quest for efficiency,
that little bit of work you'recreating for yourself or others
(40:23):
in the pursuit of a perceivedgain.
We hope this deep dive hasgiven you plenty to mull over
and perhaps even sparked somecreative thinking of your own as
you navigate your own complexenvironments.
Thank you for joining us on theDeem Dive.
Okay, let's unpack this.
Imagine a marathon runner whois trained relentlessly, you
know, shaved off every possiblesecond, only to find the finish
line keeps moving further away.
That's the feeling manybusinesses, especially those in
retail, seem to have right nowwhen it comes to productivity.
Today, we're embarking on adeep dive into precisely that
challenge the future of retailproductivity.
(00:21):
We're drawing some reallyincisive insights from a
groundbreaking strategic reportRetail Productivity 2025, by
Rethink Productivity.
Our mission for you, thelistener, is to well cut through
the noise, understand thecrucial, often counterintuitive
shifts and opportunities facingretail right now and, perhaps
most importantly, see how thesefundamental lessons about
(00:41):
efficiency, cost management andinnovation extend far beyond
just stores.
This isn't just for retailinsiders.
It's really about the broaderprinciples of navigating a
relentlessly evolving landscapethat apply to well pretty much
any organization.
We've got sharp data points andsome truly forward-thinking
scenarios to explore, so getready for a thorough and,
hopefully, thought-provokingjourney.
Speaker 2 (01:02):
It's a really apt analogy, actually, and one that
resonates deeply within thecurrent economic climate.
This report from RethinkProductivity.
It offers a remarkably clearlens into what businesses are
grappling with.
It immediately sets the scenestating everyone is facing this
productivity challenge.
That phrase alone tells us agreat deal about the current
economic and operational climate.
(01:22):
It signals a universal pressureright, a shared struggle that
transcends specific industriesbut arguably impacts retail most
acutely, given its razor-thinmargins, and that direct, highly
visible consumer interaction.
This isn't a localized issue.
It's systemic, a pervasiveforce driving strategic
conversations at well everyexecutive table.
Speaker 1 (01:42):
Yeah, absolutely.
And when it comes to whatbusinesses are being asked by
their stakeholders and theirbalance sheets, the report cuts
right to the chase Help us savemoney.
Now, that's hardly a novelrequest in the business world,
is it?
But Rethink Productivity makesa crucial observation that truly
defines the current landscape.
They contend that retailershave already made all the easy
changes.
Hmm, that simple sentencecarries a profound weight.
(02:03):
Think about that for a second.
The they contend that retailershave already made all the easy
changes.
Hmm, that simple sentencecarries a profound weight.
Think about that for a second.
The low-hanging fruit, theobvious cost-cutting measures,
the straightforward processimprovements, the incremental
efficiencies that once offeredeasy wins, they're gone.
What does it truly mean for anorganization when you've already
picked all the easy fruit fromthe tree?
Speaker 2 (02:22):
Well, it fundamentally reshapes the
entire approach to efficiency.
It has to.
When the low-hanging fruit isgone, finding new efficiencies
is dramatically harder, far morecomplex, and it often requires
a fundamental re-evaluation, ifnot a complete overhaul of
operations.
It's no longer about trimmingfat, it's about reshaping the
very muscle and bone of thebusiness.
You're moving beyond simpletweaks to seeking systemic
(02:50):
changes, often technology-driven, to unlock that next level of
savings.
And, as the report highlights,these pressures aren't solely
internal, not by a long shot.
Customer behavior itself isdriving massive change.
The seismic shift to onlineshopping, the pervasive demand
for instant gratification, theincreasing preference for
self-service options thesearen't just passing trends.
They're creating entirely newoperational complexities and,
frankly, significant costs forretailers.
(03:11):
Think about the intricate danceof fulfilling online orders
from physical stores, managingcomplex returns across channels
or accommodating the surge inclick-and-collect services.
These all add layers of tasksand processes that just didn't
exist in the same volume before.
Speaker 1 (03:25):
It's not just a constant adaptation game, it's a
constant reinvention game,wouldn't you say?
And then, on top of all theseexternal and internal pressures,
rethink.
Productivity points to anothersignificant internal drain that
impacts profit the profit impactfrom theft.
This connects directly tobroader operational challenges.
How do you, as a retailer,strike that incredibly delicate
(03:48):
balance between securing yourassets, preventing loss, and
simultaneously facilitating asmooth, welcoming and efficient
sales environment?
Every security measure, everylocked shelf, every tag can
potentially add friction for thecustomer, increase dwell time
or, crucially, create additionalwork for the staff.
It's a delicate balance, andtheft directly erodes
profitability, making theproductivity challenge even more
(04:10):
acute.
It's like a hidden tax on everysingle transaction.
Speaker 2 (04:13):
Exactly and given these multifaceted pressures,
the central objective for 2025,as defined with remarkable
clarity by Rethink Productivityis crystalline to reduce task
and process time.
This isn't merely a suggestion.
It's identified as the criticallever.
The why behind this is profoundit's to free up valuable human
resources and eliminateoperational drag.
(04:33):
Every minute saved in aback-end task, every redundant
step eliminated from a process,is a minute that can be
reinvested into higher valueactivities.
It's about optimizing the flowof work, making every action
count and ensuring that humaneffort is directed where it
yields the greatest returnrather than being consumed by
inefficiency.
Speaker 1 (04:52):
And from this core objective, the report breaks
down several strategic goalsthat really resonate.
First, they talk aboutincreased customer time.
This is fascinating because itimmediately shifts the focus.
It goes from simply cuttingcosts to driving actual value.
It's not just about gettingtasks done faster.
It goes from simply cuttingcosts to driving actual value.
It's not just about gettingtasks done faster.
It's about what that speedenables.
Right, If you streamline yourbackend tasks, everything from
(05:12):
stocking shelves to managingdeliveries it means your staff
suddenly have more time, moretime to spend meaningfully
interacting with customers onthe floor.
It's about quality overquantity in customer
interactions, empowering staffto provide better service,
helping customers find exactlywhat they need, solving problems
proactively and, ultimately,building deeper loyalty.
It's a tangible translation ofefficiency into enhanced
(05:34):
customer experience.
Speaker 2 (05:35):
Precisely.
The goal isn't just fasterprocesses, but processes that
enable a demonstrably betterservice and stronger customer
relationships.
Then they highlight theobjective to increase capacity
at peak.
This is the perennial, almostexistential challenge for any
retailer, isn't it?
How do you handle surges indemand during holidays, major
sales events or even just busyweekends without overwhelming
(05:56):
staff, without leading to longlines, lost sales opportunities
or a consistently poor customerexperience?
The report emphasizes thatsophisticated productivity
analysis helps businesses managethese peaks more effectively by
understanding where bottlenecksoccur and how to dynamically
optimize staffing levels andprocesses to avoid them.
It's about building elasticityinto operations.
Speaker 1 (06:18):
And linking efficiency directly to revenue
growth.
Rethink Productivity emphasizesthe goal to drive ATV, or
average transaction value, whichessentially means selling more
to the same customers.
This objective truly brings itall together, closing the loop
between operational efficiencyand commercial success.
When your processes areoptimized and staff are freed up
(06:38):
from those non-value-add tasks,they can genuinely focus on
sales opportunities.
They can upsell, cross-sell,provide personalized
recommendations and genuinelyengage with customers to
increase the average transactionvalue.
It fundamentally shifts thefocus from just processing
transactions to actively drivingrevenue and maximizing customer
lifetime value.
Speaker 2 (06:57):
It's about precision.
Really, rethink Productivityeffectively uses an image in
their report a target with anarrow hitting the bullseye.
It underscores that theseobjectives aren't just vague
aspirations but preciselytargeted goals.
It's about hitting the markwith both efficiency and impact,
ensuring every effortcontributes directly and
measurably to these strategicoutcomes.
(07:18):
It's a testament to the kind ofcomprehensive insights you can
find on the Rethink Productivitywebsite and certainly their
podcasts.
They're always about actionable, targeted strategies.
Speaker 1 (07:28):
But if you don't hit that target, the risks are
substantial.
Boy are they substantial.
The report paints a stark,almost alarming picture,
describing businesses as runningsprinting to stand still.
This is a profound paradox thatimmediately grabs your
attention.
It suggests that, despiteconcerted efforts to reduce task
and process time and increaseoutput, these actions can
(07:49):
ironically lead to more timegoing into non-value-add
activities.
So you're working harder,investing more, but not
necessarily smarter or moreeffectively.
What exactly does non-value-addNVA truly mean in a retail
context, and why is it so well,insidious?
Speaker 2 (08:04):
Right.
Nva tasks are activities thatconsume valuable resources, time
, labor, materials, even mentalenergy without directly
contributing to customer valueor enhancing profit.
To give you some concreteexamples, imagine a staff member
spending 20 minutes searchingfor a misplaced item because the
stockroom is disorganized, orconstantly correcting inventory
(08:24):
errors due to poor data entry,or filling out redundant
paperwork that serves no clearpurpose and, just you know, sits
in a folder somewhere.
These are all NVA activities.
They don't enhance the customerexperience, they don't directly
generate revenue and theycertainly don't build the brand.
The insidious paradox is thatif you simply try to speed up
existing processes without firstrigorously identifying and
(08:46):
eliminating these N NBA tasks,you're just accelerating waste.
You're literally building afaster treadmill for your staff
to run on, but they're still notmoving forward.
Speaker 1 (08:54):
And the costs of this inefficiency, compounded by
external pressures, areescalating rapidly, according to
Rethink Productivity.
Let's delve into the alarmingcost pressures outlined in the
report.
First, labor costs.
The European Commissionforecasts up to a 6% increase in
2025.
And specifically for the UK,the National Living Wage, nlw,
is projected to increase by asubstantial 6.7% in April 2025.
(09:17):
That takes it to £12.21 perhour, or approximately £25,400
per year for a full-timeemployee, or approximately
£25,400 per year for a full-timeemployee.
To put that into perspective,consider this From April 2020,
when it was £8.72 per hour or£18,200 per year.
That's a whopping 40% increase.
A £7,200 pay rise in just fiveyears for a full-time employee
(09:39):
Wow.
And while this data is specificto the UK, it clearly poses an
implicit yet significantchallenge for businesses in
America and elsewhere.
It indicates a global trend ofrising labor expenses that
cannot be ignored.
Every business leader,regardless of their geography,
needs to look at their own P&Land ask how they're going to
absorb these shifts.
Speaker 2 (09:55):
Absolutely.
This isn't just about payingmore.
It's about the increasedfinancial burden on businesses
that are already operating onvery tight margins.
And the cost increases don'tstop there.
Employer national insurance, ni, in the UK is also set to
increase from 13.8% to 15% inApril 2025, with the threshold
dropping to £5,000.
For our non-UK listeners, thinkof NI as a mandatory
(10:17):
contribution employers make ontop of an employee's salary,
sort of like a payroll tax.
This is a direct, substantialimpact on a business's overhead
as it adds another layer of costfor every single employee they
have.
It's a compounding effect thatsqueezes profitability from
multiple directions.
Speaker 1 (10:32):
And the final piece of this complex cost puzzle, as
highlighted by RethinkProductivity, poses a truly
concerning question Lesscolleagues on the floor equals
higher risk.
This links directly back to theearlier mention of profit
impact from theft.
If retailers respond to theserising labor costs by simply
reducing staff presence on thesales floor, a seemingly
(10:53):
straightforward way to cutimmediate expenses, they might
inadvertently exacerbate theproblem of shrink and theft.
It creates a challengingfeedback loop.
Trying to save money on labormight lead to higher losses from
theft, forcing even moredifficult decisions down the
line and potentially underminingthe very cost savings they
sought.
It's a classic example ofunintended consequences, isn't
(11:14):
it, where a seemingly rationaldecision in one area creates a
new, equally significant problemin another.
This is the kind of intricatedilemma the Rethink Productivity
podcast often unpacks in detail.
Speaker 2 (11:25):
It really is, and that takes us perfectly into the
human capital dimension, whatRethink Productivity
provocatively frames as the Mindthe Gap Challenge.
It's a problem that extends farbeyond the immediate payroll
figures.
Speaker 1 (11:36):
Here's where it gets really interesting and, frankly,
a bit uncomfortable for someorganizations.
Rethink Productivity discussesthe significant ripple effects
of increased frontline colleaguepay.
It's not just the direct costof higher wages for the
frontline staff.
It's about how this impacts theentire compensation structure
within a retail organization.
This crucial challenge acrosscolleagues, supervisory and
(11:58):
management pay differentials.
Speaker 2 (12:10):
Let's look at the precise data from the report.
Frontline colleague pay isrising significantly from eight
pounds 72 per hour in April 2020to a projected 12 pounds 21 per
hour by April 2025.
As we just discussed, that's asubstantial jump approximately a
£70,200 pay rise for afull-time employee over five
years.
Now compare that to the averageretail supervisory pay which,
(12:32):
according to Glassdoor datacited in the report, is
estimated at £28,100 in November2025.
Speaker 3 (12:38):
Okay.
So let me get this straight.
If a frontline colleague ismaking £25,400 a year and their
direct supervisor is making only£28,100.
That's a pretty narrow gap,isn't it?
Just over £2,700 difference.
Imagine a career ladder wherethe rungs suddenly get closer
and closer together as you gohigher up.
Does this still feel like aclimb worth making?
Does that relatively small paybump provide enough incentive to
(13:00):
take on the added stress?
The increased responsibility,the longer and often less
flexible hours and themanagement of people that come
with the supervisory or deed ofmanagement role is a very real
motivational challenge.
Speaker 2 (13:09):
It creates a significant issue for talent
attraction and retention at alllevels A huge one.
If the financial incentive foradvancement isn't compelling
enough, who will step into thosecritical supervisory and
management roles, the roles thatare so essential for
operational stability and growth?
Retail already faces challengeswith high turnover, and this
issue of compressed pay scalescan severely exacerbate it,
(13:31):
making it harder to build andmaintain experienced leadership
teams, which in turn, inevitablyimpacts overall productivity,
morale and service quality.
It's a complex dynamic thatrequires careful strategic
consideration beyond just thebaseline wage dynamic that
requires careful strategicconsideration beyond just the
baseline wage, extending tocareer paths, development and
non-financial incentives too.
The report really shines alight on this often overlooked
(13:52):
consequence of risingentry-level wages.
Speaker 1 (13:55):
OK, so we've set a challenging scene rising costs,
thin margins and a complex humancapital dilemma.
A bit bleak, but where are theopportunities?
Rethink Productivity offerssome truly compelling insights
into unlocking efficiency,particularly in process and
technology, that give us aroadmap forward.
Speaker 2 (14:12):
Yes, absolutely.
The report highlights a crucialoverarching point the
opportunity to understand thetrue cost.
This isn't just about theobvious direct costs of
operations, but about delvinginto the holistic, often hidden
expenses embedded within everyprocess and activity.
It encourages a much deeperdive into every single
operational layer.
Speaker 1 (14:31):
Let's break down some of the key areas for
optimization that RethinkPredictivity details in depth.
First, they talk about processcompliance and pace of work.
This emphasizes that it's notenough to simply have processes
documented they need to befollowed consistently and
critically.
Efficiently Makes sense.
Then a powerful concept Let thetech drive the process, remove
(14:53):
decisions and options.
What does that truly look likeon the ground?
It's about standardization,automation and significantly
reducing human error orvariability by taking subjective
choices out of repetitive tasks.
Think about a system where atask is automatically assigned
based on real-time data, orinventory levels automatically
trigger an optimized reorderwithout any manual intervention,
(15:14):
Removing the need for staff tomake discretionary choices that
might lead to delays or errors.
It streamlines decision making,or rather removes the need for
it entirely in some cases.
Speaker 2 (15:24):
It's about leveraging technology to enforce best
practices and remove thesubjective element wherever
possible, leading to predictableand efficient outcomes.
This leads directly to the nextpoint Understand the process
and cost end-to-end.
Why is a holistic end-to-endview, rather than just isolated
improvement, so crucial forachieving real impact?
(15:44):
Because optimizing just onestep in a broken operational
chain doesn't fix the wholechain to end view, rather than
just isolated improvement, socrucial for achieving real
impact.
Because optimizing just onestep in a broken operational
chain doesn't fix the wholechain.
It often just shifts thebottleneck somewhere else.
You need to map and understandthe entire flow, from receiving
goods in the backroom to thefinal customer transaction at
the till, to identify truesystemic inefficiencies and
their associated costs.
It's basically a complete valuestream mapping exercise.
Speaker 1 (16:05):
And this connects profoundly to the question how
much does it really cost toreplenish stock and how many
times?
This delves into the oftenhidden labor, energy and
logistical costs involved inmoving products from the
warehouse to the shelf and thenpotentially back again if it's
overstocked.
We've all seen thedisheartening sorry this item is
out of stock sign on an emptyshelf, as vividly depicted in
(16:27):
the report's accompanyingvisuals.
That's not just a lost sale.
It's a symptom of inefficientreplenishment systems, a direct
cost of failure and a tangibleblow to customer satisfaction.
Speaker 2 (16:38):
And tying into that rethink, productivity, poses a
really bold, almost provocativequestion what is the cutoff when
you don't make profit?
Buyers responsible for shrinkand waste.
This is a fundamental challengeto traditional retail
structures.
It really is.
It suggests connectinginventory buying decisions
directly to the profitabilityand waste metrics, shifting
accountability directly to thebuyers.
(17:00):
The idea is to ensure thatwhat's purchased is not only
sold, but sold profitably,minimizing loss from theft,
damage or spoilage.
It's a powerful mechanism toensure inventory efficiency from
the very first decision point.
Speaker 1 (17:12):
Then there's the physical space itself, which is
often overlooked as aproductivity lever.
New stores refit are thelayout's optimum From a stock
storage, front end andcollection point of view.
This highlights how physicaldesign directly impacts
operational flow and efficiency.
A poorly designed store caninherently create non-value-add
tasks, just by the way staffhave to move, product access,
(17:33):
stock or process customerinteractions.
Optimizing the physical layoutcan significantly reduce wasted
time and effort.
Seems obvious, but maybe oftenmissed.
Speaker 2 (17:42):
Oh, definitely.
And Rethink Productivity pointsto specific cutting-edge
technologies that are poised todrive these improvements,
offering tangible examples.
First, computer vision focalsystems.
This technology, leveragingadvanced camera systems and AI,
can provide real-time granularinventory tracking, identify
out-of-stocks the moment theyoccur and ensure shelf
(18:04):
compliance without any manualchecks.
Imagine a store where camerasconstantly monitor shelves,
instantly alerting staff when aproduct is running low or a
display is disheveled,eliminating the need for tedious
manual counts or visualinspections.
Then there's Easel Plus, that'selectronic shelf edge labels
with picking functionality.
Like pick-to-light systems,these systems streamline order
(18:25):
fulfillment, whether it's forin-store picking, for online
orders or click-and-collect.
Think of a warehouse or even astore backroom where lights
illuminate the exact binlocation of an item needed for
an online order, guiding staffthrough the most efficient pick
path, significantly cutting downsearch time.
And finally, qr codes and NFCnear-field communication.
These have myriad applications,from simplified inventory
(18:46):
management providing instantproduct information to customers
via their phones orfacilitating seamless tap-and-go
customer interactions.
These aren't just futuristicconcepts they're here and
they're transforming theback-end and front-end alike.
Speaker 1 (19:00):
But it's crucial to remember, as Rethink
Productivity also notes, it'snot just about the tech.
The human element is stillparamount and profoundly
impactful.
They make the intriguingobservation that when a task is
completed impacts pace,efficiency, time of day and or
time to end of shift.
What does this suggest aboutmotivational factors, fatigue or
perhaps even strategicscheduling influencing
(19:22):
productivity?
Perhaps completing certain highconcentration tasks earlier in
the day, when energy is higheror before a major rush, could
yield significantly betterresults?
Seems logical.
And then the crucial link thatcannot be overstated there is a
link between colleague tenure,turnover and productivity.
This is vital.
Retaining experienced,knowledgeable staff can lead to
(19:43):
significant, tangible gains inefficiency, reduce ongoing
training costs and foster a moreknowledgeable, empowered and
ultimately productive workforce.
Their institutional knowledge,their understanding of nuances
and their establishedrelationships with customers are
invaluable assets that directlyimpact output.
Speaker 2 (19:59):
These observations powerfully underscore that while
technology is an indispensableenabler, the human factor
remains paramount Absolutely.
It's about optimizing thesynergy between technology and
human capabilities.
This focus on efficiencyextends right to the consumer
experience with RethinkProductivity's insights on
reinventing the retail front end, not just tills.
Speaker 1 (20:22):
That's right.
Rethink Productivity highlightsa significant opportunity for
holistic front end change,moving far beyond just the
traditional checkout till as thesole point of interaction.
Speaker 2 (20:41):
We're seeing a fundamental, irreversible shift
in how customers expect tointeract with retail.
The report details these shiftsin customer interactions
Increasing self-scan andself-pay transactions.
Okay, the benefits forretailers are clear Increased
speed, reduced labor costs andoften a perception of
convenience for the customer.
But there are also challenges.
Customer adoption rates varysignificantly, security concerns
around theft can rise and, aswe'll discuss, potentially
unintended consequences likeincreased work for staff in loss
prevention roles or the needfor more customer assistance.
(21:04):
Naturally, this shift leads tofewer colleagues at TILS, which
fundamentally impacts staffingmodels.
It necessitates remaining staffto be more versatile, acting as
mobile problem solvers ratherthan static cashiers.
Speaker 1 (21:15):
And e-commerce integration is placing entirely
new, sometimes unexpected,demands on the front of the
store increasing click andcollect and third-party parcel
volumes.
This brings new logisticalburdens right to the customer
service desk managing pickups,processing returns and handling
third-party deliveries andoutgoing parcels.
It's a whole new, significantset of tasks for store staff
(21:36):
that requires optimizedprocesses and often dedicated
space.
But even with all thisautomation and integration, the
human element stubbornly remainscrucial.
The report wisely reminds usthat staff still need to handle
refunds, queries, etc.
These are the complex, oftenemotionally charged exceptions,
the problem-solving scenariosthat simply cannot be automated.
They require humanproblem-solving skills, empathy
(21:58):
and judgment.
Speaker 2 (21:59):
And thinking boldly beyond the traditional store
model.
Rethink Productivity exploresradical ideas for rethinking
product access.
They pose the idea Sell stockthat must be behind a screen or
to fill empty boxes vending.
This explores the concept ofunintended retail for certain
product categories, reducing theneed for staff to manage those
items directly while stillmaking them accessible.
(22:21):
Similarly, for serviceaugmentation, they challenge us
to consider how AI could assistfor services that require a
person lottery, age, approval,etc.
Ai, while AI could help verifyidentities or process initial
requests with speed, humanapproval is still necessary for
regulated services, highlightingwhere human judgment remains
critical and where technologyaugments rather than replaces.
Speaker 1 (22:42):
And a fascinating technology mentioned with vast
potential for retail is openbanking.
This isn't just about fasterpayments.
It has the potential for trulyseamless payments, integrating
loyalty programs directly at thepoint of sale or even
incorporating broader financialservices directly into the
retail experience.
Imagine a customer walking intoa store, making a purchase and
(23:05):
their loyalty points areautomatically applied.
Their preferred payment methodis ready with a single tap and
perhaps even a personalizedfinancing option pops up, all
seamlessly integrated Becausetheir bank account and the
retailer's system are securelyand pre-approvedly talking to
each other.
It streamlines transactions andopens up new avenues for
customer engagement.
But ultimately, rethinkproductivity acknowledges the
(23:26):
core frustrating struggle formany retailers, many struggling
to optimize for now withflexibility for future change.
This highlights the immensedifficulty of building agile
systems and processes in alandscape that's evolving at
breakneck speed.
It's like trying to fix the carwhile you're driving it down a
rapidly changing road Not easy.
Speaker 2 (23:45):
Not easy at all.
Building on that challenge,Rethink Productivity doesn't shy
away from provocative ideas.
They really don't.
They encourage what they callcreative thinking, using the
classic lightbulb image in theirreport as a powerful metaphor
for sparking radical new ideas.
Speaker 1 (24:00):
So what does this all mean for radical change?
They dare us to ask what wouldhappen if?
And then pose some trulyaudacious, deeply uncomfortable
questions that challengelong-held retail paradigms.
Speaker 2 (24:12):
These are not incremental tweaks.
These are fundamentalchallenges to long-held retail
norms, designed to ignite trulytransformative thinking For
rethinking management andstructure.
They ask there wasn't a storemanager in every store.
This implies exploring newmodels like cluster management,
where one manager overseesseveral smaller stores, or
(24:32):
sophisticated remote management,or even self-managing teams
enabled by advanced technologyand transparent data.
Then, pushing the envelopefurther, offices were closed.
Other than interviews anddisciplinaries.
This suggests a radical shifttowards more on-the-floor
presence for managers andsupervisors, with administrative
work handled remotely orcentralized, freeing up valuable
(24:52):
store space and leadership time.
Speaker 1 (24:55):
And colleagues worked across multiple stores and been
on local shifts.
That's radical flexibility forstaff, right Allowing for
optimized labor allocationacross a wider geographic area
based on demand, potentiallyfostering a stronger community
engagement among staff andproviding employees with more
control over their schedules.
Interesting, then, forefficiency in regional
(25:15):
management field visits wereconducted 50% of the time via
technology.
This dramatically reducestravel time and costs for
regional managers, freeing themup for more strategic
data-driven tasks rather thansimply being on the road.
And to reduce communicationoverload, a perennial pain point
for store teams.
They ask Head office couldn'tcontact mill stores other than
via one approved portal onselected days.
(25:36):
Imagine the drastic reductionin distractions and fragmented
communication for store staff,allowing them to focus entirely
on customers and core operations.
That's a big one.
Speaker 2 (25:45):
Huge and streamlining operations and compliance
offers equally bold and franklyliberating ideas.
You stopped completing all thechecklists other than legally
required ones.
This suggests a ruthlesselimination of unnecessary
administrative burdens,bureaucratic tasks and redundant
paperwork that consume valuablestaff time without adding
significant value.
(26:05):
Promotions were simpler andless more frequent.
This addresses the significantmerchandising effort and
complexity involved in constantintricate promotional changes
that often drain store resources, in constant intricate
promotional changes that oftendrain store resources.
Then the logistical challengeof overstock.
You could send bulk overstockback to the DC distribution
center.
This improves inventory flow,reduces the need for valuable
in-store storage space andminimizes the risk of obsolete
(26:28):
stock gathering dust.
Speaker 1 (26:29):
And related to that, for optimizing deliveries.
Deliveries were less frequent,with flexibility and planograms.
This proposes optimizinglogistics and reducing the labor
required for receiving andstocking by having fewer larger
deliveries and allowing for moredynamic shelf planning For
perishable goods a critical areaof waste Better forecasting of
hot food to grow sales and zerowaste.
(26:51):
This is about leveraging AI andadvanced analytics for
real-time demand prediction foritems like bakery or deli
products, minimizing spoilageand maximizing freshness, and a
truly cutting-edge concept thatties into broader digital
transformation.
You had digital twins live forevery store.
Imagine a virtual, real-timereplica of every store, allowing
for powerful simulation oflayout changes, staffing levels,
(27:12):
customer flow and processoptimizations before any
physical changes are made.
Speaker 2 (27:20):
Wow.
The radical stock managementideas are particularly
eye-opening, challenginglong-held beliefs about
inventory no stock counting,relying entirely on technology
like RFID or advanced computervision for perpetual real-time
inventory accuracy, eliminatingthe highly labor-intensive and
often disruptive manual counts.
Then a shift in aestheticexpectations.
Senior leaders accepted storesshouldn't be 100% phased all the
(27:41):
time.
This is a fundamental change inpresentation standards to
prioritize efficiency overabsolute constant, perfect
visual merchandisingControversial maybe.
Pushing that further, they askyou only phase up for one hour
per day.
That's an extreme vision forvisual merchandising efficiency,
focusing staff time onhigher-value tasks.
Speaker 1 (27:58):
And adopting a truly lean approach, Only replenish
when needed.
A just-in-time approach tostock on the floor, Reducing
overstocking, minimizinghandling and freeing up backroom
space For slow-moving itemsthat take up valuable real
estate.
Slow sellers delivered assingles then discontinued.
Minimizing dead stock andoptimizing shelf space for more
profitable items and for displayefficiency.
(28:20):
Displays were all originalouters, no singles, which
drastically reduces labor fordisplay setup and presentation,
focusing on speed and simplicity.
Speaker 2 (28:28):
Automation of customer-facing and back-end
services also featuresprominently.
Induction was done in under twohours by AI.
This envisions rapid,standardized and highly
efficient onboarding for newemployees, getting them
productive much faster.
Self-service post office,expanding unattended services
within retail spaces, leveragingexisting footfall for new
revenue streams.
(28:49):
Dynamic pricing for hot food,real-time price adjustments
based on demand, time of day ornearing expiration, maximizing
sales and minimizing waste forperishable items.
Speaker 1 (29:00):
And thinking creatively about underutilized
space.
Use spare space for thecommunity local produce
providers.
This is an innovative idea forrevenue generation and deeper
community integration, turningdead space into a vibrant hub.
I like that More tech-drivenefficiency, auto-beat checking
for product freshness andcompliance, reducing manual
(29:21):
checks and ensuring food safety.
Outsource cash accounting,leveraging specialist third
parties for back officeefficiency and security, freeing
up in-store staff from tediousfinancial reconciliation.
And a benefit for employeesthat can also offer a tax
advantage Salary sacrifice,which are employee benefits that
can offer tax advantages toboth the employee and,
(29:41):
potentially, the employerwithout direct cost to the
employer.
Speaker 2 (29:52):
These are the kinds of forward-thinking discussions
you'll often find on the Rethink.
Productivity is also clear-eyedand pragmatic about the
unintended consequences,particularly concerning loss
prevention, work creation.
They highlight that everyaction has a reaction.
It's critical to remember that.
Speaker 1 (30:05):
This is a critical point and Rethink Productivity
provides direct visual cues intheir report Images of security
tags, locked shelves and itemsbehind full glass doors like
toothpaste or razors.
We've all seen that the paradoxhere is striking.
Efforts to prevent theft bylocking up high-value or easily
pilfered items can inadvertentlycreate significantly more work
(30:28):
for staff and dramatically slowdown the customer experience.
Think about it A customer hasto actively find a staff member,
wait for them to unlock acabinet and then potentially
wait for them to escort the itemto the checkout.
This adds layers of friction,significantly slows down service
, requires additional staffassistance and creates
frustration for the customer.
It's a trade-off that needsincredibly careful consideration
(30:51):
.
Is the cost of preventing thattheft, factoring in the lost
sales from frustrated customers,plus the increased labor and
decreased customer satisfaction,truly less than the cost of
preventing that theft, factoringin the lost sales from
frustrated customers, plus theincreased labor and decreased
customer satisfaction, trulyless than the cost of the theft
itself?
It's a genuine catch-22, adilemma that businesses are
grappling with every single day.
Speaker 2 (31:05):
It absolutely is.
Every security measure, whilemitigating one risk, can
introduce another in the form ofoperational inefficiency,
reduced sales and customerfrustration.
Inefficiency, reduced sales andcustomer frustration.
It powerfully highlights theneed for a truly holistic view
of productivity, where you weighthese complex factors against
each other and to help navigatethis intricate landscape,
rethink Productivity offers aconcrete productivity roadmap
(31:28):
with immediate actionableopportunities for retailers.
Speaker 1 (31:31):
Let's guide our listener through these
actionable strategies, becausethis is where the rubber meets
the road.
The first point on the roadmapis task management reinvention
stop, reduce, then digitize, egcompliance audits.
This order is absolutelycrucial, isn't it?
It's a powerful principle.
Don't automate a broken process.
First, rigorously identify andeliminate unnecessary tasks the
(31:52):
NVA tasks we discussed.
Then simplify the ones thattruly remain, making them as
lean and efficient as possible.
Only then should you considerdigitizing them.
This prevents simply speedingup inefficiency and cementing
bad habits into your systems.
Speaker 2 (32:06):
It's a foundational principle for any true
transformation.
If you digitize a redundanttask, you've just made waste
more efficient.
Basically, the second pointaddresses physical space
optimization, optimizing storage.
Storage is often inefficientand in a poor spot.
Lockers can be in the car park.
This encourages truly creativeout-of-the-box solutions for
(32:27):
back-of-house efficiency andstock accessibility, thinking
beyond traditional, oftencramped stock rooms.
Speaker 1 (32:33):
Then a clever strategic insight leveraging
footfall drivers.
Parcels drive footfall.
Yeah.
How can retailers capitalize onthe significant traffic
generated by services likeparcel pickup or drop off people
who are already walking intotheir stores to encourage
additional sales?
It's about converting thatincidental footfall into
intentional purchasing andrevenue.
Speaker 2 (32:52):
Point four addresses redistributing labor Move task
to colleagues Likely to have tomove tasks to keep people busy
when there must be two in storefor safety, extra colleagues to
do delivery and then colleaguesnot occupied later.
This highlights the criticalneed for flexible staffing
models and extensivecross-training to balance safety
requirements with productivity,ensuring staff are utilized
(33:22):
efficiently throughout theirshifts even if and as
self-checkout rises toprominence, the fundamental
question becomes what is thestaffing model?
Speaker 1 (33:28):
with rise of SGO, rethink productivity
acknowledges that whileself-checkout reduces the need
for traditional till operators,it doesn't eliminate the need
for staff entirely.
It necessitates staff forassistance, for security
monitoring, for age verificationand for addressing a variety of
customer service tasks,fundamentally changing the
nature of front-end roles ratherthan simply reducing headcount.
Speaker 2 (33:50):
Automating administrative burden is another
monumental opportunity.
Automate task planning andadmin for stores.
This is about leveragingtechnology to freeate task
planning and admin for stores.
This is about leveragingtechnology to free up store
managers and supervisory stafffrom mundane, time-consuming
administrative duties, allowingthem to redirect their focus
towards high-value activitieslike leadership development,
direct customer engagement,sales coaching and strategic
(34:12):
planning.
Speaker 1 (34:12):
And a major theme we've touched on repeatedly more
stock than needed, whichcreates double triple handling.
How to move closer to just intime for stock?
This is about the profoundbenefits of reducing excess
inventory-less handling time,less storage space required,
reduced risk of shrink orobsolescence and improved cash
flow.
It's about supply chainsynchronization.
Speaker 2 (34:34):
Point nine explores diversifying business units
pharmacy, funeral, travel,coffee shops, etc.
This encourages retailers tothink beyond their core offering
.
How can they strategicallyintegrate other business units
or services to leverage theirexisting retail footprint and
staff more efficiently, creatingnew revenue streams and
increased footfall from existinginfrastructure?
It's about maximizing the valueof every square foot.
Speaker 1 (34:56):
And finally, point 10 , which really brings it all
together as a continuous journeyRegular efficiency studies to
refresh and create ideas,validate process change.
Example full impact of UberEats model integrity, funding V
output.
This stresses that productivityis not a one-time fix or a
project with a defined end.
It's an ongoing journey,continuous cycle of improvement.
(35:18):
It requires constant analysis,adaptation and rigorous
validation of changes to ensurethey are truly yielding results
and delivering on their promisedoutcomes.
The world doesn't stand stilland neither can your
productivity strategy.
This is a point frequentlyemphasized on the Rethink
Productivity podcast,underscoring the need for
ongoing analysis.
Absolutely, it has to becontinuous.
(35:39):
So what does this all mean whenwe bring it back to the core
insights from RethinkProductivity?
The report's summary pointsaren't just conclusions.
They are a manifestounderscoring the urgency and
fundamental complexity of theproductivity challenge facing
retail and, frankly, mostindustries today.
Speaker 2 (35:53):
The first and perhaps most profound statement is all
the easy stuff is done.
This isn't just a casualobservation or a lament.
It's a stark, undeniablereality that demands a
completely new level ofstrategic thinking and courage
from retail leaders.
Incremental adjustments, meretweaks to existing models simply
won't cut it anymore.
(36:14):
They just won't.
Speaker 1 (36:15):
And, intertwined with that, a challenging
inevitability Costs willcontinue to rise.
This isn't a forecast withuncertainty.
It's a foundational truth.
This means proactive,deep-seated, often disruptive
change isn't just a good idea.
It's an absolute necessity forsurvival and growth.
You can't simply hope thesecost pressures will disappear.
You have to fundamentally planfor and adapt to them.
Speaker 2 (36:38):
Then a critical operational, imperative Manage
change via the workload model toensure fair funding.
This emphasizes the importanceof balancing aggressive
efficiency targets with theabsolute necessity of supporting
staff.
It's about ensuring thatresources and staffing levels
truly align with the actualtasks that need to be done,
preventing burnout, maintainingmorale and optimizing output.
(36:59):
It's about marrying efficiencywith human sustainability.
Speaker 1 (37:02):
And the dual focus again, which can't be stressed
enough Drive ATV.
It's not just about costreduction as an isolated goal.
It's about actively growingrevenue through enhanced
customer interaction.
Productivity in this moderncontext isn't just about
reducing inputs.
It's about strategicallymaximizing outputs and value.
Speaker 2 (37:21):
Understand how much is cost to run the business.
This is a powerful call fordeep, granular, data-driven
insights into every singleaspect of operations.
You cannot truly optimize whatyou do not fully and precisely
understand.
It's about knowing the true,fully loaded cost of every
process, every product, everysquare foot of your operation.
Speaker 1 (37:41):
And the necessity of a structured, dynamic approach,
have a productivity roadmap.
This isn't about ad hoc fixesor reacting to the latest crisis
.
It's about a strategic,structured, long-term plan for
continuous improvement, Buildingagile systems that can adapt to
rapid market shifts.
Speaker 2 (37:56):
Point seven succinctly captures the ultimate
goal get the right work done bythe right role at the right
cost.
This encapsulates the optimalallocation of human capital and
technological resources,ensuring that tasks are
performed by the mostappropriate person or by the
most efficient technology at themost cost-effective point in
the process.
Speaker 1 (38:15):
And finally, a point that Rethink Productivity really
drives home, tying back to ourearlier discussion and serving
as a foundational principle forany transformation Stop NBA
processes, pre-digitization it'sthe essential foundational step
.
Rigorously eliminate wastebefore you automate, Otherwise
you're simply creating a faster,more expensive and more complex
(38:35):
way to do something thatfundamentally adds no value.
Its automation is an accelerantof efficiency, not an enabler
of embedded waste.
Speaker 2 (38:42):
The report truly highlights the sheer depth and
courage of analysis required tonavigate these challenges.
It really does.
It's not just about simpletweaks or superficial changes.
It's about a fundamentalre-evaluation of how retail
operates, from the physicalstore floor to the highest
levels of head office strategy.
It's clear why organizationsturn to Rethink Productivity for
(39:03):
these kinds of transformativeinsights, which you can delve
into further on their website,RethinkProductivitycom, or
through their dedicated podcast.
Speaker 1 (39:12):
What a comprehensive journey we've taken through the
Retail Productivity 2025 report.
From Rethink Productivity, it'sabundantly clear that the
future of retail, and indeedmany industries facing similar
pressures, hinges on how boldlyand strategically we tackle
these evolving productivitychallenges.
Speaker 2 (39:28):
Given that, as the report emphatically spades, all
the easy stuff is done and costsare undeniably going to
continue rising.
What's the single mostuncomfortable truth a retail
leader, or really any businessleader today, must confront to
truly secure their future?
It's that superficial fixes andincremental adjustments are no
longer viable.
(39:48):
They're just not.
They must move beyondshort-term cost-cutting to a
fundamental, often painfultransformation of their core
operating model, embracingradical ideas and critically
anticipating and mitigatingpotential unintended
consequences, rather than shyingaway from them.
Speaker 1 (40:02):
That's a powerful thought, a true call to action
and for you listening, weencourage you to reflect on this
.
How can you apply the stop,reduce, then digitize principle
to your own workflows, your ownprojects, even your daily tasks?
What's the unintendedconsequence?
You might be overlooking, inyour own quest for efficiency,
that little bit of work you'recreating for yourself or others
(40:23):
in the pursuit of a perceivedgain.
We hope this deep dive hasgiven you plenty to mull over
and perhaps even sparked somecreative thinking of your own as
you navigate your own complexenvironments.
Thank you for joining us on theDeem Dive.
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