It’s a constant struggle for retailers to protect margins. If it’s not global macro-economic concerns, it’s unseasonable weather, intensified competition, multichannel conflict and inefficiencies, increased theft or any number of countless other causes. In response, many retailers have responded with short-term fixes of reducing staffing coverage and labor costs, but in doing so, have created long-term unintended consequences.
Professor Saravanan Kesavan and a team of researchers at the University of North Carolina’s Kenan-Flagler School of Business recently published a paper that considered the case of a large Midwestern department store chain that changed its operational models to include a self-service fitting room. The research findings illustrate the need to complement value and intuition with hard data in making decisions to optimize retail store operations.