Holidays 2021: Retailers Walking a Tightrope to Balance Challenges of Labor Shortages and Supply Chain Issues with Customer Service Needs

COVID-19 has hammered retailers at the store level.

Early in the pandemic, store closures wreaked havoc for companies and their employees. Upon reopening, stores adopted new procedures and operational practices to keep customers and employees safe. Store traffic has returned, but retailers must operate differently than they did pre-COVID.

Store operations adapted to new consumer shopping behaviors, but that did not end the challenges for retailers. As we moved through the ensuing months, supply chain issues surfaced. They have now reached what can be referred to as “DEFCON 2” (near crisis)—and one could argue that we are close to DEFCON 1, if not already there!

To top off what has been a challenging 2021, retailers now are experiencing critical issues with labor availability. The details driving that situation are beyond the scope of our discussion here, but it is important to point out that store wages and the cost of finding and retaining employees have become hyper-competitive, which can impact operating profits and the customer experience (i.e., serving customers and maintaining store tasks and visual standards).