Business Consultant

More Automation in Retail #TiltCorporateCulture

More Automation in Retail #TiltCorporateCulture

More Automation in Retail #TiltCorporateCulture.jpg
 
 

We are increasing the minimum wage of workers in Los Angeles and it is a very good thing. However, let’s remember that it comes at a cost. If we are paying higher wages, then we must pay more for the product at hand.

I was sitting with a customer the other day as he calculated his costs for 2017. He has a very popular sandwich shop that he is looking to expand to other locations. As we mapped out his costs, we also examined the vendor increases for the upcoming year.

He will be paying more for bread, meat, fruit, vegetables and the condiments that will make up his sandwich. As a customer, we will pay more for his sandwich. The $8 meal will go up to $10.

Define Inflation

A general increase in prices and fall in the purchasing value of money — Google

It is still the same sandwich, but now it costs more. The variable (what has changed) is the labor. As a consumer, we will need to make more money to pay for the higher prices. 

There is nothing wrong with increasing the minimum wage. It is something that we should be doing every year to match the increasing cost of living. As business owners, executives and managers, we should want to pay people more. Dividends, company earnings and profit are important, but we can’t sacrifice people or their quality of life.

Challenges

It is a quid pro quo factor. With more pay should come more responsibility:  an increased work load, tighter management or maybe just doing a better job. This is why at end of the year, evaluations are important. If we have improved productivity, then we should have increased profitability. Why keep employees in the same position? How can we make real improvements to our labor force?

Automation

We’ve seen it at the checkout counter for years. We have better technology. With more secure payment methods, we will replace those jobs. The same way we have replaced those jobs on the plant floor with machines, we will do the same thing in the retail space. What if we don’t want to pay more for the sandwich or we simply can’t?

The Solution

Not everyone is made for college, it is expensive, time consuming and some of the coursework is irrelevant but we all have the ability to be great at something. That means educating the entire workforce from the retail staff to the janitors not just management. Everyone learns a new skill, let’s be versatile and start the process now as technology shifts and culture changes let’s be ahead of the curve not correcting it.  

 

By Dane Flanigan