Facing Your Biggest Challenge: Retail’s People Problem

We have two major, foundational shifts happening in commerce right now that are changing how we staff and train the next generation of commerce worker. They are:

  1. Proliferation of Channels = More people to manage more channels.
  2. Democratization of Technology = Different and more people who understand how it all works together and how it works within a company.

Combine these two very large but intertwined trends and you have an industry that needs to hire a lot more people with very different skill sets than they are used to needing and hiring. Creating your biggest challenge yet; retail’s people problem.

The Start of Retail’s People Problem

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How are you going to build out a team that takes you (successfully) through the next decades? Recently, there was an article in Internet Retailer quoting Steve Madden’s President of eCommerce as saying:

“The quality [of merchandise in stores] is a real problem for shoe sellers, not necessarily just for Madden,” he says. “It’s about training in the stores [when it comes to fulfilling online orders]. That’s a real tough thing for retailers today. Stores associates’ turnover rate is high. As people move on, a lot of companies look at training as a one-time thing. You can train when you start and you’re supposed to remember everything. It’s a constant reiteration and I don’t think retailers do enough of that.”

This quote is a great example of the challenges facing merchants when it comes to their staffing at the store level, and ultimately across the rest of their organizations.

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If we take this line of thinking and explore it a little more, I have a question for you to think about.

When was the last time you were in a store where you asked a store associate a question and were impressed by their product knowledge or maybe you were impressed by some insight they provided?

To be honest, I have VERY few examples of my own. This kind of scares me, since I spend a lot of time visiting retail stores around the world purely out of an insatiable curiosity with how commerce works. So if I’m someone who is in retail stores significantly more than the average person, I should have far more experiences that were amazing. But I don’t.

Truthfully, my wife and I now default to wanting store associates to leave us alone because we mostly find them useless with everything except taking our money during checkout.

The People Problem Exists Across all Channels

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So if most in-store experiences are rubbish, how are we expecting these same merchants to provide great customer experiences in many, many more channels? If the staff they have in their stores is the foundation of their business, how are they going to layer on to this foundation online?

Let’s think on this a little more. I have two pictures for you to envision:

1. Bricks & Mortar Store:

There’s a physical space, with a very limited # of products available for purchase, and only a handful of ways to pay and leave. These spaces are still incredibly analog and simple as a shopping channel. Conversing with customers in store is easy…it’s face to face and very short lived, usually measured in minutes.

2. Digital Channels

Next try and envision all of the digital channels available to consumers to find, browse, pay for and have product delivered to them (or picked up). Think about how many conversations your customers could have in any one of these channels. Not only can these conversations happen in hundreds of different channels, but they aren’t short lived. Sometimes these conversations go on for a long time, spread over hours or days.

Offline or Online – You need the right staffing strategy!

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If the digital channels are multiplying like rabbits (they are), and most retailers have large amounts of muscle built up around staffing the kind of people you and I are used to interacting with in their physical stores, how on earth are they going to staff and train the right people to help customers in these digital channels?

There are parts of the world where careers in retail still exist. Where the staff you build store level isn’t just temporary help, but rather is paid well to provide customers with exceptional experiences. I think retail needs to get back to this type of staffing strategy, particularly if merchants want to survive for the next decade or more.

Story-time

One story I like to tell is about a larger (200+ store) apparel retailer that I worked with for a number of years. One day in 2015 we were talking about using iPads / Tablets in their stores so that store associates could more easily look up product information when customers asked.

While there was almost unanimous agreement that this would be a win for customer experience, the project didn’t’ move forward.

Why?

Because management at this retailer was afraid that staff would steal the iPads. And no, I’m not kidding.

What does this say about the type of person they hire to serve their customers? Or about how these same people were compensated?

Rethinking the entire hiring process in retail

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It’s time for merchants to acknowledge that the path to sustained success from this point forward involves a total re-think about the type of people they hire, train and retain. I think it’s time for merchants to stop thinking about store level staff as the lowest type of worker in their companies.

Some will argue that there isn’t enough margin in the products they sell to afford better quality staff. While I’m sure this is the case for some businesses, I don’t think this line of reasoning stands for most.

In any individual store location there are almost always a handful of sales associates that do 10x more sales volume than the rest. Some merchants have a commission structure where these people are rewarded, although even then probably not proportionate to what they generate.

Yet in many of my consulting clients they struggle to keep superstar sales associates at their stores. Perhaps retail isn’t any different from the rest of the working world? “A” players want to work with other “A” players.

I get that staffing better, more expensive people at your stores goes against common wisdom. Most retailers with stores have been getting killed in recent years, forcing them to look to cost cutting as a driver of shareholder return. Where better to cut to the bone than people, one of the larger expenses in any company?

There are many leaders in other industries who preach the value and critical importance of building a strong team in the success of their companies.

 

What are you doing about your team?