When your retail sales are on a decline, minimizing unnecessary expenditure is crucial and is a top priority for everyone managing a bricks and mortar retail store.
One of the highest variable costs for any retailer comes down to labor. If you are in a retail leadership position, you will constantly be looking for ways to create leaner and more efficient operating procedures.
With your competitors always tight on your heels, looking for any opportunity to overtake, there is no room to compromise on your store and brand’s reputation when it comes to customer service.
A key area of focus for retailers lies in their budgeting and scheduling. However, you need to ensure that these decisions are made with research and data in mind.
More often than not relying on gut instinct will result in poor staffing decisions and schedules that are fragile, and break easily as soon as “Mary has called in sick again” or a local event brings in higher footfall than what was forecasted based on the previous year’s sales data.
Staff to customer ratio is a crucial metric to monitor, as it will shed light on the effectiveness of your workforce and provide insight into areas you can support your team in for fast growth!
What is Staff to Customer Ratio?
In simple terms, the staff to customer ratio is the number of staff in your store and the number of shoppers or potential customers in your store, expressed as a ratio.
How many staff did you have on from 11-12 last Saturday? How many customers came through the doors from 11-12 last Saturday? That’s your staff to customer ratio for that hour.
Finding the Sweet Spot
Finding the sweet spot in your data will really come down to understanding your corresponding conversion rate, DPV, and WOP metrics.
Look across the roster for the past week, and see if you notice any correlations between hours with a higher staff to customer ratio, and reduced performance in your core KPIs.
Does conversion drop from 15% to 5% when your staff to customer ratio increases from 1:10 to 1:30 for an hour, for example?
This could be a sign that you need to roster more staff for this hour. This becomes an even stronger signal if it happens across multiple weeks.
Does your staff to customer ratio increase by a factor of three every Saturday through the midday rush?
Try rostering an extra casual staff member on, and watch your KPIs closely for the results.
If your staff to customer ratio is actually on target, but your conversion is still low, then this points to the potential that your team may need additional training on the best practice basic principles of retail selling.
How does this make my store more money?
Where there is an exciting opportunity to make more money back for your store from this metric, is identifying that golden ratio for your store, of staff to customers.
Because we guarantee there will be moments where your bricks and mortar retail store is severely over-rostered.
Meaning, you can potentially be operating with less staff on the floor and subsequently a lower wage cost, while still maintaining your target conversion goals.
