A new workforce management initiative in Louis Vuitton’s U.S. stores drives savings to the bottom line and store managers to the front of the store.
A key objective is to maximize store managers’ time out front on the sales floor by easing administrative tasks that shackle them to the store’s back office, said Kathryn Kallison, human resources manager for LVMH Fashion Group Americas, the parent of Louis Vuitton U.S.
Manual payroll and labor-scheduling activities that once consumed two to four hours weekly are now automated and take store managers only 20 to 30 minutes. That frees up face time with customers, Kallison said. “Most of our stores have fewer than 15 employees in them,” she said. “Everyone is expected to be on the floor and sell.”
In addition, the $340,000 spent each year on manual data entry for payroll processing of hourly workers has been slashed by nearly half, to $180,000 per year, she said.
These metrics, outlined in a presentation by Kallison during the Retail Systems conference in Chicago in late May, are among the benefits seen after an automated time-and-attendance system was implemented at Louis Vuitton stores in the continental U.S. In June, six more Louis Vuitton stores in Hawaii were outfitted with the system, which includes electronic time clocks and workforce management software from Kronos of Chelmsford, Mass. Louis Vuitton North America operates about 100 stores in the U.S., Canada and the Bahamas.
Stores are no longer using paper time sheets or noisy punch-clock systems to record employee hours. In stores with more than 10 employees, the new Web-based timekeeping system features a biometric log-in, which scans an employee’s fingertip to validate that person’s identity. The biometrics feature did not conjure any “Big Brother” concerns, and employees thought it was “cool,” Kallison said. Biometrics technology eliminates the problem of “buddy punching,” where one employee punches the time card for an absent or tardy co-worker.
Kallison said Marc Jacobs stores in the U.S. (there are nine) will be equipped during the third quarter, and rollout will follow to other brands in LVMH Fashion Group Americas, covering some 1,700 U.S. store and corporate employees. LVMH Fashion Group Americas, which includes Fendi, Celine, Givenchy, Berluti, Pink and Loewe, is part of the Fashion and Leather Goods division of luxury goods group LVMH Moët Hennessy Louis Vuitton.
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The project’s genesis traces back to 2003, when Claus-Dietrich Lahrs, then president of Louis Vuitton North America, pushed for back-office efficiencies so that store managers would have more time to spend with customers. Lahrs has since moved to Christian Dior Couture. Kallison said his support, and that of current upper management, was key to the success of the project.
“We’re seeing unprecedented growth in workforce optimization,” said Rob Garf, a retail practice analyst with Boston-based AMR Research, who made the presentation along with Kallison. One-third of the companies that have some sort of workforce optimization solution in place today will reinvest in “next generation” workforce management systems in the next 12 months, he said. Garf defined such systems as an integrated set of processes and technology used to create a staffing execution plan, budgets, forecasts and optimal labor schedules.
The Kronos system, called Workforce Central, integrates with Vuitton’s point-of-sale technology, RetailPro, from Island Pacific of Irvine, Calif. The system also integrates with the stores’ customer-counting technology, from ShopperTrak of Chicago, as well as with its human resources management system, UltiPro from Ultimate Software of Weston, Fla.
This integration of technologies will provide Louis Vuitton stores visibility into the total staff-sales-customers equation. It is what Kallison calls “moving from second-tier management to third-tier — using the data we collect in a sophisticated way.”
“We are working with algorithms now, taking time[-stamped] data and putting it into spreadsheets to see when sales are happening during the day, what is the staff on the floor and what is the [customer] traffic,” she explained. Analysis of the data revealed that stores were not always staffed properly, and Louis Vuitton is correcting that.
“We found that we are overstaffed in the morning, when there are not that many customers, and understaffed in the afternoon, which is when a lot more of the sales happen,” she said. “A lot of store managers have it in their head that there are things that have to be done in the morning,” and they schedule staff accordingly. However, a more “optimized” system would be to staff stores more conservatively in the morning and shift certain tasks to the afternoon, when more staff are on hand.
Kallison said the system is flexible and can be configured in different ways to accommodate how brands operate their stores. Louis Vuitton North America has 1,300 employees and stores in 25 states, where public holidays and overtime rules may vary.
While brands and stores in different states may have operational variations, data is collected and processed in a standard way through the system, ensuring greater reporting accuracy.
Because the system is Web-based, information is up-to-date. “Real-time access,” Kallison said. “This is very, very important for paid-time-off management” when it comes to such things as personal days, sick time and vacations.
“In a manual world, you are just hoping things are going right out there,” she continued. “It’s very difficult to monitor that 1,300 employees are taking [the time off] they are supposed to take, not more. And also, it’s important to make sure that people are able to take all the time” off they are entitled to take.
Kallison did not provide a system rollout time line for other brands in the LVMH Fashion Group Americas. However, she expects those brands will be receptive to the workforce management system.
“Other brands see the ROI, and they see how things have changed for the Louis Vuitton management,” she said. “And they want that for themselves.”