Capacity Management Starts by Identifying Service Points

Customers are busier than ever. So, when they walk into a retail store to find long lines or unmanaged demand, one of two things will happen. They’ll either leave without making a purchase or hesitate to return the next time they need something. Either way, the customer’s poor experience reflects the store’s inability to manage capacity.

Capacity management is a growing concern as retail stores add click-and-collect options to their omnichannel models. Today’s shopping experience is about more than staffing enough registers or supervising self-checkout stations. Maintaining customer throughput involves identifying every point of service and evaluating its ability to address customer needs effectively and efficiently.

This is the first step of a successful capacity management strategy for improving the customer experience.

Identifying service points and their potential

In the age of omnichannel retail, what constitutes a service point? It depends on where customers expect to interact and transact with a retailer. Consider some of these common retail service points and how retailers measure their capacities:

• Curbside pickup is measured by number of spaces.
• In-store pickup is measured by storage lockers or pickup points.
• In-store self-checkout is measured by number of kiosks.
• In-store staffed checkouts are measured by number of lanes.
• Customer service desks are measured by number of staffed personnel.

Transaction time is the common denominator underlying each of these service points. The average amount of time a customer spends at each one has a direct impact on fulfillment capacity and customer satisfaction, and service time varies across each service point. For example, average transaction time at a self-checkout kiosk might be three minutes while in-store pickup clocks in at just one minute. This data factors into fulfillment capacity.

Physical service points have finite capacity

One of the biggest advantages to online shopping is the experience of no-wait convenience. It doesn’t matter how many people are on the site or checking out. Ecommerce transactions happen on the customer’s timeframe, but this unlimited capacity doesn’t translate to physical retail transactions.

There are only so many registers and curbside pickup spots. Identifying these service points and their capacity for assisting customers is the first step to good capacity management. For example:

• If you have 20 curbside pickup spots, the maximum capacity at any given time is 20.
• If the average transaction is 2 minutes, the maximum hourly throughput per space is 30.
• If all spaces operate at the average, the total maximum hourly throughput is 600.

This math is extrapolative. Retailers can figure out everything from average hourly throughput to total daily throughput capacity and average service time per service point. By tabulating each in-store and click-and-collect service point, retailers can get refined insights regarding total capacity — and how best to manage it.

Take a closer look at the store ecosystem

Retailers that take the time to identify each service point and do the math to understand their capacities will end up with a complete picture of the physical fulfillment ecosystem. This benchmarked data plays a vital role in capacity management. Consider these questions:

• What’s the running average capacity of each service point? Is it growing or shrinking?
• Which service points see the lowest throughput? Which ones see the highest throughput?
• Which service points have the highest ticket values? Is there a correlation to service time?

As retailers uncover trends and customer habits, it gets easier to practice better capacity management at the store level. For instance, a store might incentivize click-and-collect for storage lockers to alleviate congestion at self-checkout stations, or it might add more spaces for curbside as BOPIS orders trend upward.

The goal of understanding this data, and mobilizing it, is to balance the store’s fulfillment capacity across different service points. No matter which fulfillment option they choose, customers deserve an efficient, hassle-free, and convenient experience. Capacity management ensures they get it.?

Emphasize and optimize your service points

Click-and-collect options open more service points for retailers. While each new point of service demands its own logistics, incorporating more service points means leveraging new opportunities to manage capacity and improve the customer experience. Points of service are not simply options for shuffling demand. For successful capacity management, retailers must consider every point of service as part of an interdependent omnichannel ecosystem.

Looking for more insight on retail capacity management? Explore Nextuple Capacity Management — a new tool for evaluating service points in your retail ecosystem and managing store capacity for a better customer experience. Learn more at www.nextuple.com.