“Mall-based department stores get slammed in the face every seven years,” said Macy’s Inc. chairman and chief executive officer Terry J. Lundgren, during a keynote session Sunday at NRF’s Big Show at the Jacob K. Javits Center.”It’s like a stun gun when it hits us.”
There was some irony to the fact that the session was titled, “Building Tomorrow’s Workforce: How Retailers are Attracting and Retaining Talent.”
Macy’s Inc. earlier this month revealed that it will lay off 10,000 employees or roughly 7 percent of the workforce. Greg Foran, president and ceo of Wal-Mart U.S., which in September said it would eliminate 7,000 jobs, was also on the panel. Last week, it was reported that Wal-Mart plans to layoff 1,000 workers before the end of the month.
“Technology is disrupting retail,” said Bill Brand, president HSN and chief marketing officer HSNi. “In the next five years, retail will change more than it has in the last 50 years.”
The NRF Foundation on Sunday said it will launch Rise Up, a training and credentialing initiative that will allow “people regardless of education, background, economic means or age, acquire the skills they need to secure jobs in retail and advance into promising careers.”
So far, 21 companies have pledged support for the program, including Ashley Stewart, Brooks Brothers, HSNi, The Kroger Co., L.L. Bean, Macy’s, Neiman Marcus Group, Target Corp., Under Armour, Vera Bradley and Wal-Mart.
The retail industry employs one out of every four workers in the U.S., according to the NRF. However, it has gained a reputation for entry-level jobs and an elusive path promotions.
“To ensure success in the future, you’ve got to adapt. We have to empower associates to embrace change,” said Foran, adding that the retailer is giving them the tools to do their jobs.
The program will offer training in-stores, digital and mobile commerce and is designed to build competencies and pathways careers. The industry is straining to see the writing on the smartphone.
“Rise Up is designed to develop basic and essential skills so that individuals can master the technology of tomorrow while also better serving our customers today,” said Karen Katz, president and ceo of Neiman Marcus Group and incoming board chairman of the NRF Foundation. “Digital and mobile technology, personalization, big data and enhancing the customer experience in the store or digitally are the future of retailing.”
“The good news is that we’ve been focused on technology for many years,” Lundgren said. “We’re the sixth-largest [online] retailer and the third-largest retailer in our category, so we’ve been able to attract and recruit technology talent. We’re one of the top companies to promote women technologists.”
Lundgren said that in the past year, the company has trained roughly 600 tech staffers on the web, including issues such as how and when to use the cloud to meet demand.
“We have a leadership institute for mid-managers at the vice president level,” Lundgren said, noting that it addresses more highly developed skill levels. Macy’s has close relationships with several universities, including his alma mater, the University of Arizona, where the Terry J. Lundgren Center for Retailing grooms students for careers in the ceo’s field.
“I’ve seen businesses invest [in employees] and pullback at different times, including Wal-Mart,” Foran said, explaining that the retailer’s Pathways program for associates will roll out to 200 training academies in the U.S. “About 140,000 department managers are going to go through training this year. We’re paying people $9 an hour to start. They get to $10 an hour when they pass the Pathways exam.”
Wal-Mart Stores Inc. in 2014 announced that it was investing $2.7 billion over two years in employee wages and training. “We’re seeing big changes in the industry,” Foran said. “To ensure success in the future, you have to adapt to the changing world. We’re trying to create sticky relationships with customers.
“The jobs in retail have changed considerably,” Foran said. “Buyers now have digital capabilities and have an endless aisle. Robots in distribution centers pick up boxes in warehouses. Before, it was somebody driving a forklift. We’ve had enormous growth in mobile. The next thing will be machine learning.”
James Rhee, executive chairman and ceo of Ashley Stewart, introduced a radical idea for quantifying employee performance. “I really don’t care about sales,” he said, adding that one of the company’s measures is the “kindness of associates to customers.” Another heretical idea is that Rhee doesn’t believe loyalty means customers must shop only at Ashley Stewart. “If a customer spends all her time and money in my stores, she’ll be called a stalker. Our customer shops at Macy’s and Wal-Mart. We encourage her to find the best deals possible.”
The Ashley Stewart executive chairman embraced online consumer reviews. “With transparency, you can’t hide anymore,” Rhee said. “You have massive exposure on social media. It’s putting enormous pressure on retailers because consumers are making judgements on your company. It’s all about the product and it’s nothing about the product. Whether you like it or not, they’re providing transparency about pricing.”
Lundgren took pains to say that technology won’t eliminate retail jobs, but rather, create different jobs. “Two years ago, we have no team on data analytics. Now, we do,” he said. “We’re never going to stop needing that merchant who can anticipate what the consumer wants six months from now.”