The Retail Workforce: In Need
When it comes to the retail workforce, everyone knows about retailers’ tendency to cling to the long-held notion that the industry must remain a low-wage, high-turnover affair. Nowhere is this more apparent than in our most recent benchmark report on what it will take to finally build a better workforce.
Within, retailers squarely lay the blame on employees being too needy, on customers holding unrealistic expectations, and in all but a few cases, on a model that simply doesn’t work well anymore. We are encouraged to see that in a few instances ( “We’re asking employees to do too many things in stores, ” “We expect our employees to learn on the job “) retailers accept a portion of the responsibility. But by and large, they are far too eager to find excuses for why change has not – and likely cannot happen in the present environment.
What’s more, the larger the retailer, the more likely they are to cling to these archetypal beliefs: 50% of mega retailers (those with more than $5B in annual revenue) say there is no budget to increase pay enough to be competitive with what potential employees expect; only 34% of retailers below the $1B mark say the same. Big retailers need to reconcile past victories as having little place in their company’s future.
Where Does This Come From?
When asked to look inward – to self-identify where some of these problems might be rooted – it is incredibly helpful to make note of respondents’ replies by the products that they sell.
No group (Apparel, Hard Goods, GM, or FMCG) shares the same top organizational inhibitor. This is remarkably rare in an RSR study, and points to just how varied the relationship is between a retailer and the people it has asked to sell its wares, based on the legacy of that product’s specific place in the retail industry at large.
For those selling “rags ” (apparel retailers), the lack of tech they’ve put in place (particularly in stores) has finally caught up to them. Even if they’ve worked hard to ensure they have the trendiest clothes of all their traditional competitors, their existing technology infrastructure is preventing them from moving forward. This could not possibly come at a worse time, with Amazon’s clear focus on Fashion.
General Merchandise retailers aren’t much better off. They, too, have notoriously underinvested in technology, and to make matters worse, 58% say they do not have the funding to invest in tech that would improve the customer experience. It’s never been a priority for them, and as a result, is now difficult to prioritize quickly. It’s just not been in their nature.
Grocers have a different problem. They admit that their store operations are too focused on “operations “, and therefore are not focused enough on selling. All of this makes sense, as 20 years ago the difference between a good grocery store and a less-than-palatable one was determined almost entirely by operations. Who had the better looking, better laid-out, better inventoried store? Today, all of that has changed. What grocers sell and how they sell it has been growing in importance with the popularity of upmarket grocery shopping all by itself. But now that Amazon is in the grocery business, complete with “Treasure Trucks ” selling bulk groceries around major US cities like a Groupon for goods instead of services (and a distribution center in every town) – selling IS important in grocery.
And retailers selling hard goods have the most straightforward challenge of all: they simply don’t have the budget to train their employees to provide a better customer experience. Complex products require a complex knowledge base, and until Amazon started applying pressure on the sales of such items, retailers were happy to let consumers wade their own way through.
All of these inhibitors result from one simple fact: retailers have not faced the challenges specific to the products they sell in a meaningful way because they haven’t had to.
Will 2018 be the year to change all that?
We encourage you to read the full report, Building A Better Workforce: What Will It Take? – and draw your own conclusion.