Productivity Insights - 2023 Reflections

Sue & Simon reflect on 2023 They discuss:

• Self Checkouts
• Electronic shelf edge labels (ESEL)
• AI/Automation
• Shrink
• Price inflation
• Stock 
• Podcast plans for 2024

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Transcript

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Speaker 1 0:09

Welcome to the Productivity Podcast . Sue and I are going to spend 10 minutes or so just talking through what we've learned in 2023 . Turbulent year for many . Lots of expected events , lots of unexpected events . So you're going to kick us off , sue , with number one in terms of what we've learned in 2023 .

Speaker 2 0:30

I think there's been an ongoing growth of self checkouts , with a notable exception of booths that kind of made a lot of press about taking them out .

Speaker 1 0:37

But still left them in their Biggie's two shops , but left them in the Biggie's two shops . Get below the headline , because I got sucked in by the headline and then read the article and said , yeah , but in your Biggie's two shops you're actually leaving them in .

Speaker 2 0:48

And I think that really tells the story of where it's at . So we've seen sort of the big grosses putting more and more of them in and it's increasingly being used in smaller stores and I think there's been different models really of how they're used and customers are getting more used to them . So I think we've been seeing kind of some tweaking and some fine tuning as people have realised the best way to operate them from a colleague point of view and also that it works best for customers as well . And obviously we've had the self scan bit as well come in . So I think it's been interesting that it's carried on developing , even though it feels like it's technology that's been around a long time now .

Speaker 1 1:28

Yeah , I agree . Number two there needs to be no particular hierarchical order , just the way that they've been documented .

Speaker 2 1:38

There's been an increase in the number of people looking at and then going on to install electronic shop edge labels . So I think there's as ever with technologies around longer prices change . There's probably a wider understanding of the cost benefit case , although for a lot of retailers the price of the actual label technology is still prohibitively expensive . So I think it's something we'll see kind of continuing to grow . But I think nobody's I don't think anybody's quite got the right way to do it . That kind of gives you everything so the best price projection you could have from it . You know , fully optimising all the technology , using the picking opportunities . You know the light up that the shelves can do . So I think there's quite a lot and it feels like we're still very much in the early learning stages . But I think it was . It's going to carry on growing and become a hot topic .

Speaker 1 2:31

Yeah , I agree , capital cost is clearly king and it's a big expenditure , but the benefits are certainly there to be had . The technologies have just come in cheaper and then the applications becoming wider . So for those that have done it , it's been great to see . For those that are thinking about doing it , it will be interesting to see how that progresses this year .

Speaker 2 2:51

And the thing is anybody that tries it . Once store managers have got it , they'll kind of it's the last thing they'd want to give up as well . So store teams absolutely love it when they get in . It does save a lot of work . The flip side of that is how much it costs to save that work , isn't it ?

Speaker 1 3:05

Absolutely . Number three I've got on my list is AI automation . So clearly in 2023 was the rise of chat , gpt , bard , all the other online portals that you can get to do whatever you want , pretty much for you . We've seen that being kind of integrated into cars . That's starting to be produced and other things . Not sure we've seen a really good , thorough implementation of anything in retail or hospitality . I know it's there . I've seen lots of examples . You know AI order taking it drive-thrus , but not really implemented in scale . So I think 2023 was the year of the idea . Hopefully 2024 was the year of the practical implementation and seeing some of that come through as people drive to combat cost challenges . I think it's one of the obvious areas to explore .

Speaker 2 4:02

Yeah , and where there's been use of AI , it hasn't been the generative AI , it's been more around how do you get useful insights and things out of big data sets ? So I'm thinking you know the likes of Tesco and Sainsbury's and Boots that have got loyalty schemes that have been running multiple years with millions of customers . You know they've been very good at getting commercial benefit from that data and obviously how we use AI is part of that . You know it's big programs running in the background digging through it all , but I don't think we've seen the use of the generative certainly commercial yet .

Speaker 1 4:45

Now number five , I'd say and again these are no particular orders shrink so clearly . Last year economic challenges across the world led to increased shrink , which has probably been combated by the fact that people are managing costs , so there's less people and prices are going up , so things cost more . So a bit of a perfect storm .

Speaker 1 5:11

We've seen lots of pictures on LinkedIn and around social of things being locked up behind perspective screens , cameras being put in place , exit gates have become commonplace now , even receipt checking in some places , although it kind of didn't dawn on me yesterday , but every time I go shopping now there's a security guard at the door and I walk out , yeah , I press the button on the till saying I don't want to receipt . So I don't really know how those two interact if the alarm goes off , because we have to then go back and look at some journal or E-POS record to see what I did or didn't buy . So that feels a bit disconnected . But yeah , be interesting . Don't know any facts or figures whether that's reduced shrink , but kind of prohibited sales , whether it's made a difference , because certainly again , the pain of trying to buy something that's locked up when organisations have less people on the floor becomes more apparent in this kind of climate .

Speaker 2 6:13

Yeah , be interesting as well the rise of kind of more body cams being rolled out for safety reasons as well . So again , that goes with the fact where you've got fewer people I mean particularly convenience retail where you're trading late hours and you know not many people across a large space , you know anything that helps protect people in those circumstances is a bonus , isn't it ?

Speaker 1 6:35

Absolutely Next on the list is price . So it's a bit briefly shrink , but clearly price is rising , and price from a consumer point of view , but also from an operating point of view . So not necessarily in 2023 , but clearly it's going to impact this year in 2024 . National living wage I think a bit of a shock for lots of people that we did the pound and two and then pulled in anybody that was between 21 and 23 . So lower the threshold For those that pay above it great , it kind of narrows the gap . So if you're going to maintain that differential , it's going to still cost you .

Speaker 1 7:13

For those that are on it , I think it really knocked some people's short term plans and created a hole in their budgets for this year , which again will be interesting to see how that plays out , when everybody was striving for efficiencies and costs anyway . But also may impact years two and three , as we have a potential change of government which may mean that we go a bit quicker towards 15 pounds and if you've had to pull stuff forward into 2024 , how does that leave you 2025 and 2026 plans ? So operating costs clearly a challenge , but again on the consumer side , we've seen other prices significantly increase and with no , probably other than notably pectoral sign of it coming back down .

Speaker 2 7:58

Yeah , I think , pricing workload in stores . I'd be interested to see if there's been a higher number of price changes going through , because my perception is the retailers are having to be cleverer about which prices they put up and which prices they don't down with put down , and you always see as many headlines about prices being held down or reduced down to match somebody else as you do as a regarding inflation , you know , for the food in particular . So I just wonder how much more price changes store teams are having to complete just to keep that , you know , the margin protected and keeping up with what everybody else is doing . There just seems a lot more fluidity around price .

Speaker 1 8:40

Which clearly , if you have electronic shelfage labels , he's not a problem at all because it's pushing a couple of buttons and templates .

Speaker 1 8:48

I think the final two stock . So we saw huge , huge ways of stock holding allocations in kind of pandemic , and post 2023 we've seen that decline somewhat and then as we head into 2024 we've got people sailing a long way around Africa and things . So I would expect that pushes price and even potentially more stock it . And the one we'll finish on before we share kind of the plans for the podcast for this year 2024 is structure . So we've talked about it quite a lot on the podcast this year in terms of well , last year even in terms of role studies , how we used them , the Insighted Games , benchmarking and maybe driven by cost pressure , maybe driven by different ways of operating , you know , more self-checkouts , electronic shelfage labels . Some of the stuff we talked about there is that perpetual review of staffing , leadership structures and we've probably seen the demise of supervisory stroke , team leader level to some degree , maybe even deputies , assistants . It'll be interesting again as we go through this year what the next incarnation of those types of hierarchies look like .

Speaker 2 10:03

And I think it's interesting . I don't think it's purely a commercial thing that people look into costs . I think that can be part of it in some instances , but the reality is it can be really difficult to get enough good people . So when you're looking at your leadership roles , you have to make sure that you're deploying them in the right way . That supports delivery of whatever is that your business wants to deliver , and you can't afford to have too many because you just can't get enough good people to fulfill those roles and stay in them . So you know there's lots of drivers , for that being the way it is .

Speaker 1 10:34

Yeah , and it's really encouraging that people are starting to make those decisions using fat-based data rather than kind of emotional data , because sometimes the facts support what you think sometimes is a completely different narrative narrative in there , as we talked through previous pods . So , plans for podcast 2024 we've got some excited mini series planned . We've got some amazing guest planning on a monthly basis . Sue and I'll start to take you through chapters of the book . Every second counts . I'm sure you've seen it all over the LinkedIn pages that we publish and it's on the website . So we'll kind of work through those 10 chapters in the coming months . Hopefully that helps you with some business challenges . You've got some ways of thinking , stimulate some thoughts or really , ahead of the productivity forum in September 2024 in Birmingham , lots and lots of people registered . Places are really filling up . So again , if you've not registered and you want to come along , get onto the website , get your place secured , because the line-ups looking good not announcing any speakers as yet , but the line-ups looking good for 2024 .

Speaker 2 11:50

Seems funny to be talking about September when we're in the middle of a bit of a cold spell . It seems hard to think ahead to the summer , doesn't it ? And beyond .

Speaker 1 11:58

Yeah , we'll get there . Anyway , thanks for listening and we'll see you on the next episode .

Speaker 2 12:03

Bye .