The New Front In Omni-Channel: Store Labor
I attended two user conferences last week, in a cross-country tour that I would not readily recommend to others. Too much plane time. It did, however, give me plenty of time to compare and contrast.
I started out the week at Manhattan Associates. They’ve been working on some solutions around the store that are really interesting – a lot of thinking going on around what has to change in how stores are supported if they are going to become a larger supply chain player. You know, in terms of product fulfillment to customers. They had a particularly interesting session, presented jointly with Empower, on the changing role of store labor.
That was a theme that carried through to Epicor’s user conference, where I moderated a panel of Milennials on what they wanted from the retail experience. The most interesting part of that panel was the fact that all of the participants were employees at retailers. Two were store managers, two were assistant managers, and two were part-time workers, all ranging in age from 17-27. So after a ton of rapid-fire questions on their technology use and shopping habits, we got into their perspective as retail employees.
Three things emerged from that discussion. One, if you are not hammering it into your store operations group to greet customers as they come in the store, then I suggest you issue a memo right now. As retail employees, this group of young adults knew from their own training that greeting people is an essential part of their job and they expect to see that reflected when they interact with other retailers’ employees as customers. Several of the seven panelists said that if they don’t get greeted or welcomed in some way when they walk in a store, they will turn around and leave.
Two, they are enthusiastic about their jobs. But except for those that made it to the store manager ranks, there’s no future in it. There was a 17-year-old girl who works part time and is thinking about college who was so enthusiastic about her job – she loved it. She could be a stable, experienced employee that any store manager would love to depend on. But she’s not going to stick with her job. And one of the most surprising things about the entire panel was the universal perspective that this is just the way it is. The pay isn’t great and the hours get tiring, so it’s fun for awhile but it’s only going to last until something better comes along. That’s kind of sad.
Three, as especially the store managers on the panel attested, while they feel like their companies do a good job in scheduling people, they do feel like there is generally not enough labor on the floor for both the selling and non-selling work they have to accomplish.
Which takes me back full circle to my own presentation at Manhattan’s user conference. In it, I made a plea to put an end to the practice of setting labor budgets primarily based on percent of sales calculations. Sales is the wrong measure – it has to be based on traffic, or you’re not measuring to real demand, you’re only measuring against transacted demand. And I made a plea for seriously reconsidering the employee’s role in the store – that technology to address the gap between what consumers know when they walk through the door and what employees know will only deliver parity. If employees are going to play any kind of relevant role, they have to know MORE than customers, or what’s the point? They’re just there to keep the inventory from walking out the door unpaid.
This was an argument brought forth on RetailWire last week, and I was gratified to see the overwhelming response in support of the notion that technology for employees, without the context of better customer service, won’t really change anything.
Top it off with the recent discovery that JCPenney has quietly ended its commission practice (that practice, ironically enough, was what led me to my first retail technology job). I still feel like JCP’s employee policies are going to be crucial to its success in transforming its stores, and these are policies still left unsaid to the market. Some commentary about the commission change has interpreted the move as a cost-cutting measure, but I don’t. Employees need to be focused on helping the customer, on providing service, almost at any cost. They should not be focused on making money off the customer. In the future store, sales – as it actually has always been – is an outcome, not really the direct result of a practice or a policy. Sales come from the right products and the right interactions with customers (i.e., driven by knowledgeable employees), not from commissions. Not from employee-facing handhelds. Certainly not in isolation.
So here’s my plea one more time: reconsider your labor costs, and how you deploy labor to serve customers. Service industry jobs are supposed to be the better paying jobs, and retail – on average, there are exceptions – is a clear outlier. Just imagine a future: imagine a future where store employees make a career out of helping customers, and not a bottom-of-the-ladder career either. Where you can find as knowledgeable and enthusiastic help – in as great of quantities – as the Apple store (I know, I said it). I fear this may be the only way to ensure the store’s future relevance.