Bass Ackwards

From the WSJ: Retailers Reprogram Workers In Efficiency Push.

Retailers have a new tool to turn up the heat on their salespeople: computer programs that dictate which employees should work when, and for how long.

AnnTaylor Stores Corp. installed a system last year. When saleswoman Nyla Houser types her code number into a cash register at the Ann Taylor store here at the Oxford Valley Mall, it displays her "performance metrics": average sales per hour, units sold, and dollars per transaction. The system schedules the most productive sellers to work the busiest hours.

Some employees aren't happy about the trend. They say the systems leave them with shorter shifts, make it difficult to schedule their lives, and unleash Darwinian forces on the sales floor that damage morale.

Current and former employees of the Langhorne store say that within months of the system's installation in May 2007, the culture shifted from collegial to highly competitive. "You could see people stealing sales from other people," says Julie Abrams, a former cashier at the store. Salespeople were "trying to get each other out of the way to get to the client," she says.

This is a classic example of Frédéric Bastiat's "unseen" problem, or as the EE calls it the "physicist's fallacy". Anything that can't be measured must not be worth anything.

The EE would really like to see the ROI on this system. After the cost of all the machines, the cost of the platform and the software, and the labor turnover that is inevitable with such a system whether the additional sales/store justifies such a thing.

The EE bets that it does not.

In fact, if retailers want to get "real", they should start with an intelligent inventory-stocking system. Putting five of each size on the racks does not work. You end up with the small's and the XXXL's and nothing in between. The inventory has to match the demographics, capisce, paisano?

Before it installed the system, AnnTaylor spent a year studying labor efficiencies. It established standards for how long it should take for employees to complete certain tasks: three seconds to greet a shopper; two minutes to help someone trying on clothing; 32 seconds to fold a sweater; and most importantly, five minutes to clinch a sale.

Incidentally, all repeat sales are built on customer loyalty. Giving your customers the bum's rush doesn't exactly endear you to them.

AnnTaylor calls its system the Ann Taylor Labor Allocation System -- Atlas for short. It was developed by RedPrairie Corp., a retail-operations software firm based in Waukesha, Wisc. "We liken the system to an airplane dashboard with 100 different switches and levers and knobs," said AnnTaylor's Mr. Knaul. "When we launched that, we messed with five of them." Giving the system a nickname, Atlas, he said, "was important because it gave a personality to the system, so [employees] hate the system and not us."

Right, because the people are total morons. They will blame the system and not you. Of course. What could be more obvious?

Now you should go twirl the other 95 knobs. Then you should design a system to check whether your knob-twirling is as efficient as can be.

That's a "meta-system" with another 20 knobs. You can call that system ASS (AnnTaylor System System) so that you can blame the system and not you.

Or you could just make clothes that people actually want so that you don't need salespeople.

That would be, like, so radical, dude!