Retailers are prioritizing employee productivity and operational efficiency to adapt to economic uncertainty and evolving consumer behaviors. This is a trend that will only expand as new technologies make it easier to improve productivity every single day. There is a constant drive to do more with less and be smarter at the same time. Economic pressures shape both hiring strategies and technology adoption.
As an example, you might have noticed that holiday staffing levels in 2025 were at their lowest in over a decade. Retailers added fewer seasonal workers in 2025 than at any time since at least 2009, with projections between 265,000 and 365,000 seasonal hires nationwide—a stark drop from previous years.1 The economic environment pushed retailers to extract maximum value from each employee and leverage flexible, scalable solutions.
Economic Factors Shaping Staffing and Technology Choices
- Consumer Spending Slowdown: Economic headwinds, including a GDP contraction and increased unemployment concerns, have caused both retailers and consumers to become more cautious, curbing discretionary spending and making efficient operations even more critical.
- Labor Market Tightness: Even though retail employment is near multi-year highs, seasonal hiring is lagging, partly because the number of job seekers is catching up with job openings—a trend that typically leads to slower wage growth and increased focus on efficiency.
- Cost Pressures: Tariffs, supply chain issues, and inflation continue to drive up operational costs, making labor optimization and technology-driven productivity essential to maintaining profitability.
Technology Solutions for Productivity and Efficiency
To meet these challenges, retailers are leaning into several technological solutions:
- Conversational AI and Chatbots: Virtual assistants provide employee support for HR and operational questions, facilitate real-time problem-solving, and streamline training. The ability to provide enterprise specific data accurately, in the right place, at the right time provides a competitive advantage.
- Data Analytics for Performance Monitoring: Real-time analytics monitor employee productivity and produce actionable insights for continuous improvement, aiding in both cost reduction and better decision-making.
- Computer Vision Solutions: Computer Vision AI for retail offers one of the most robust fields of AI today with proven ROI by leveraging existing camera systems to impact the entire business.
- AI-powered Scheduling and Forecasting: Artificial intelligence and analytics-driven software are used to predict demand, automate shift scheduling, and align staffing with real-time needs, helping minimize both over- and understaffing.
Retailers Are Not Alone
Retailers big and small are aiming to maintain competitiveness advantages by rapidly adopting AI, automation, and advanced analytics to drive employee productivity and operational efficiency. Employee and operational efficiencies can be found through a number of solutions. It is critical that each decision is made with a long-term goal in mind and trusted partners to lean on.
Sources:
1 https://www.cbsnews.com/news/employment-retail-seasonal-jobs-hiring-lowest-in-15-years/
Brian Gallagher
Brian is the Retail Strategy & Business Development Director at Connection. Brian joined Connection in 2016 as the Retail subject matter expert (SME) after leading National Store Operations teams for more than 20 years. Brian has a deep understanding of today’s Store Experience and Customer Engagement solutions requirements and works collaboratively with customers and partners to create complete business solutions to drive customer engagement and revenues. Outside of work, he enjoys traveling with his wife and cheering on the Cleveland Indians.
