Seasonal hiring provides a window into retailers’ priorities, and 2020 demonstrates both the COVID-19-powered growth in ecommerce and the need to operate stores and supply chains safely.
Across a wide range of retailers, three trends are driving the industry’s holiday hiring strategies:
- The race is on for same-day delivery. Competition for faster deliveries is being spurred by Amazon’s resurgent ability to deliver for Prime members after a rough period early in the pandemic as well as the launch of Walmart+. Retailers will need to account for the heightened demand for home deliveries from COVID-19, which has incentivized many retailers to form new relationships with Instacart, Shipt, DoorDash and other services that enable home delivery at scale.
- Ecommerce execution will lean more heavily on store-based fulfillment. Holiday hires will help retailers leverage their store-based omnichannel fulfillment capacity through buy online, pick up in-store (BOPIS), curbside pickup, home delivery and ship-from-store services. “Ecommerce sales have been driven by a surge in click-and-collect, specifically curbside pickup,” according to eMarketer. In an annual forecast revised in July, eMarketer predicted that BOPIS and curbside pickup sales will increase 60.4% for the year, up from its pre-pandemic forecast of 38.6%.
- Retailers hope to “flatten the curve” of holiday sales spikes by spreading their deals out over the course of the season, preventing the queues and crowds that have traditionally descended on stores on big “deal” days such as Black Friday. The rescheduled Prime Day, set for Oct. 13-14, will kick off the season. In a survey of consumers conducted by SmarterHQ, 23% said they planned to do most of their holiday shopping on Prime Day, as compared to 19% on Black Friday and 11% on Cyber Monday.
Non-Essential Retailers Likely To Trim Holiday Hiring
Retailers’ fortunes heading into Q4 are strongly tied to whether they were deemed essential or non-essential retailers during the COVID shutdowns. While Amazon and many big box retailers have announced their seasonal hiring plans, department stores and fashion chains have been notably, but not unexpectedly, quiet. Additionally, some online and essential retailers had already ramped up hiring earlier in the year, when their sales unexpectedly soared toward Q4 levels.
“The retail industry has been beset with massive uncertainty,” said Andrew Challenger, SVP and Head of Sales and Media for outplacement firm Challenger, Gray & Christmas in an interview with Retail TouchPoints. “Traditional retailers have been reticent to announce their hiring targets as it has become incredibly challenging to predict consumer spending behavior in the face of multiple shocks. The timing of hiring will be pushed further into the holiday season, as retailers will wait until fourth quarter sales predictions come into clearer focus.”
“We believe holiday hiring will be flat or slightly higher versus last year, with hiring in shipping and logistics broadly offsetting reduced demand in parts of traditional retail,” said Sujeet Naik, Research Associate at Coresight Research in an interview with Retail TouchPoints. “The pandemic has negatively impacted the department stores’ businesses. In a context of mass store closures in the sector, we expect department stores to hire more conservatively.”
Relieving Pressure On Stores
More than six months into the pandemic and months after stores have reopened, many shoppers approach indoor shopping with caution. In addition to following local regulations, retailers must make sure those wary shoppers (and in some cases, employees) feel safe and comfortable.
This is driving the creation of new roles at store level, such as temperature takers, mask enforcers and crowd monitors, as well as the popularity of contact-free interactions. “Few consumers are interested in person-to-person contact, as the shift continues toward contactless environments,” said Sean Maharaj, Managing Director and logistics and supply chain expert at management consultancy AArete in an interview with Retail TouchPoints.
And retailers are stretching out their holiday sales over a longer period in an effort to keep crowds out of stores, which provides the added benefit of avoiding the sales spikes that can easily overwhelm ecommerce technology, fulfillment and delivery.
Macy’s CEO Jeff Gennette said he expected Black Friday-type deals “to start in full force after Halloween,” according to the New York Times.
In its release on seasonal hires, Walmart cited internal customer data showing that “87% of customers who shopped Walmart over the past six months say they plan to seek out deals and great prices earlier this year to better prepare for the holiday season, with one in three customers planning to start their holiday shopping before early November.”
Fulfillment Crunch Will Affect Delivery Cutoff Dates
More and more, retailers’ last-mile efforts are tied in with shipping and delivery companies. Additionally, outsourcing companies provide services that enable retailers to leapfrog to a higher level of ecommerce competence.
Radial, an outsourcing company that provides ecommerce fulfillment, transportation, inventory optimization and customer care for several retailers, plans to bring on more than 25,000 seasonal workers.
“The increased demand and need for retailers to scale their fulfillment and customer care workforce has led to us hiring approximately 20% more seasonal employees this holiday season compared to last year,” said Eric Wohl, SVP and Chief Human Resources Officer for Radial in an interview with Retail TouchPoints.
UPS plans to bring on 100,000 seasonal workers, up slightly from 95,000 in 2019, and FedEx is looking for 70,000 additional people, an increase of 27% over last year.
Aware that shippers were overwhelmed by the sudden deluge of ecommerce orders when the shutdowns started, some analysts question whether even those large numbers of temporary workers will be enough for the anticipated holiday surge.
“There is likely to be a ‘fulfillment crunch’ where there’s a risk of demand outpacing the delivery windows of the main carriers,” said Chris Ventry, VP in the Consumer and Retail practice of SSA & Company in an interview with Retail TouchPoints. “A number of industry analysts have pointed out that this fulfillment crunch could cause retailers to move up their holiday order cut-off dates by several days or more.”
“Many retailers have not built plans to deal with the shortage of UPS, FedEx and other shipper capacity,” agreed Michael Brown, Partner in Kearney’s Consumer Practice in an interview with Retail TouchPoints. “Amazon is outmaneuvering brick-and-mortar retailers by engaging [its Amazon Flex] gig workers to do deliveries. Once again, Amazon will emerge a winner if others do not develop plans now.”
More Than 300,000 Join Retail Ecosystem
Among the retailers that thrived during the pandemic, eight have recently released seasonal hiring numbers that add up to more than 330,000 workers, with 80% being hired by just two companies, Amazon and Target.
After bringing 175,000 new people on board in March and April, Amazon has been looking to fill 133,000 positions in September — and there may be more to come. Alicia Boler Davis, Amazon’s VP of Global Customer Fulfillment, told CNBC that the company is still evaluating its employment needs for the Q4 holiday period.
Target expects its holiday hiring to be on par with 2019 at approximately 130,000 associates. The retailer plans to double the number of associates focused on BOPIS and curbside pickup, and to task more employees with contactless services and safety measures such as disinfecting carts, providing masks to customers and helping meter store access so shoppers can maintain social distance.
While Walmart announced 20,000 holiday hires, a comparatively small number, the retailer has hired more than 500,000 permanent associates since March in stores and across its supply chain. The seasonal workers will be assigned specifically to ecommerce fulfillment centers.
“With these new hires over the last six months, its new seasonal associates, and ongoing hiring of full-time and part-time positions as needed in its stores, Walmart will be staffed and ready to serve customers for the holiday season,” the company said.
Other retailers planning to bring on large numbers of seasonal workers operate in verticals that have seen significant growth due to the pandemic, including Party City (20,000); crafts retailer Michaels (16,000); and electronics retailer Best Buy, which plans to hire “thousands” of seasonal workers but didn’t provide a number.
Retailers with unique niches, such as Michaels, tend to do well during the holiday season, according Maharaj . “Hiring will be more concentrated on industry players that have spent time enhancing their ecommerce capabilities and/or have unique market positions,” he said.
For its part, 1-800-FLOWERS.COM Inc. is becoming an online-only seller of gifts, gourmet foods and florals after deciding to gradually close 38 of the 39 Harry & David stores in late April. To handle what’s expected to be increased ecommerce volume, the company is bringing on more than 10,000 seasonal associates to work across the company’s gourmet foods and gift brands, which include PersonalizationMall.com, Cheryl’s Cookies and The Popcorn Factory, as well as Harry & David.
“This holiday season will look different than previous years,” said Chris McCann, CEO of 1-800-FLOWERS.COM Inc. in an interview with Retail TouchPoints. “We’ve already seen a shift in consumers to virtual celebrations — with people reaching out from afar for birthdays, new babies, anniversaries and more. As we head into the winter holiday season, we expect these trends to continue.”