This shoe chain can’t find enough workers. It hopes self-checkout can fill the void

By Nathaniel Meyersohn, CNN Business

Stores have a glut of job openings to fill. One chain hopes automation is a solution to the pressure.

DSW is piloting self-checkout stands in stores in “response to hiring challenges,” said Karen Cho, senior vice president of human resources at Designer Brands, owner of the shoe chain, in an email. Cho said the self-checkout test started last year to also address health concerns with workers and employees trying to social distance.

Cho said the company has “relatively lower hiring needs” because many full-time store workers stayed on throughout the pandemic, but “hiring has been more challenging than in past years” for part-time employees. The company is also offering signing bonuses to recruit employees and expanding health care benefits and subsidies for child care.

There were 965,000 open jobs in the retail sector in April, according to the latest Labor Department data, around double the openings from April of 2020.

Why hiring is tough

Retailers are searching for workers as growing numbers of vaccinated Americans head back to shop in stores.

Economists, labor experts and companies say the reasons for the hiring challenges are varied, but they include difficulties workers are having finding child and family care, health and safety concerns among the workforce, and expanded unemployment benefits.

Meanwhile, retailers are paying more to hire workers. Hourly wages in the retail sector grew 4.8% in May from the same month a year prior, according to the Labor Department.

Self-checkout and other forms of automation are not new to retail. Chains such as Walmart, Target, CVS, Kroger and others deploy self checkout machines, while Amazon has a handful of cashier-less Amazon Go stores.

Stephanie Wissink, a retail analyst at Jefferies, said that more shoppers have grown comfortable using self-checkout in recent years at these chains, especially in the pandemic to avoid close interactions. This has led apparel and department stores to try them out at their stores. Kohl’s is also planning to test self-checkout.

Self-checkout can help stores keep down labor costs. In a self-checkout area with six stands, a retailer can have one employee monitoring them all for customer assistance, compared to six workers stationed at cash registers, she said. Companies can then redeploy workers to customer service roles on the sales floor, jobs fulfilling online orders, or cut them out of their budgets altogether, she said. The number of cashiers in the United States is projected to fall 7% from 2019 to 2029 to 3.35 million, according to the Labor Department.

Keeping a lid on costs is important for DSW and its parent company, which saw total sales plunge 36% in 2020 from a year earlier due to the pandemic. DSW also plans to close around 65 of its more than 500 stores over the next four years.

One restaurant chain says it is using technology to ease pressure on existing staff since it can’t hire enough people. There were more than 1.5 million job openings in the leisure and hospitality sector in April, up from 345,000 openings last April when many restaurants and hotels were closed due to Covid-19.

Applebee’s is using handheld tablets at around 500 locations that allow waiters to plug in customers’ orders on the spot, saving them the extra step of going to the kitchen to add orders into a computer.

“With staffing challenges across the country, these tablets provide a meaningful hedge against labor inflation, while enabling our service to be far more efficient,” Applebee’s President John Cywinski said last month.

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