It’s the dawn of a new employment era. After years of viewing frontline employees as a cost center, retailers now increasingly recognize them as critical brand ambassadors in the dog-eat-dog battle for customer loyalty. With an economy at full employment, shifts in consumer attitudes toward in-store experiences and new waves of in-store technologies, multiple streams are converging to drive a change in how retailers manage and invest in their staff to deliver a winning customer experience.
Shifting sands of the labor market
For years, I’ve often heard retail leaders refer to frontline staff as “replaceable resources.” High employee churn was accepted as a natural business cost. Back-filling positions was faster and easier than investing the time, money and resources necessary to retain people.
Since the 2008 recession, the labor market has supported this approach with an endless supply of new workers. Today’s economy, nearing full employment, no longer does. Workers have ample employment options.
This challenge is compounded by demographic shifts. As the largest pool of employees, Millennials are more selective about the companies they work for, demanding strong cultures and aligned values. Remarkably, Millennials put their wallets where their priorities are: on average, they’d give up $7,600 in annual salary to have a better work environment where they can learn, improve on the job and receive performance feedback.
These factors represent new challenges for retailers, especially when coupled with the costs associated with employee turnover. Replacing a worker who earns $50,000 is about 20 percent of their annual salary. In 2016, Walmart spent $1 billion hiring workers. That’s a gigantic price tag, even for them.
Stores still matter
It would be one thing if bricks-and-mortar retail was disappearing, but the reality is that a majority of consumers still favor shopping in real life. A 2017 survey discovered that 54 percent of respondents prefer physical store shopping versus online (33 percent), mobile (12 percent), or voice-controlled devices (one percent).
Eighteen to 25-year-old shoppers are the second-largest group (58 percent) that prefer in-store experiences, only surpassed by over 61 years old (63 percent). Coupled with 83 percent of respondents buying products in physical stores and 41 percent buying online but picking up in-store, the imperative of bricks-and-mortar retail is apparent. No wonder Amazon is opening physical stores.
While the tactile nature of shopping is important, consumers place the highest value on store associate interactions. Ninety percent of consumers are somewhat or extremely likely to make a purchase when they receive assistance from a knowledgeable store associate. Deloitte’s findings support this assertion and demonstrate that it’s the most important factor by far in driving in-store purchases.
What happens when in-store service is subpar? Consumers might still buy online, but the customer perspective has shifted: every interaction now influences what a customer thinks about your brand. It’s not about online versus in-store; it’s about the total brand experience.
But channels are of no consequence
If you’re not focused on delivering a competitive total brand experience, you’re not going to succeed. It’s really that simple. Customers expect a seamless, consistent experience whenever and wherever they interact with your brand. That means brand relationships are built or eroded at every touch point.
“Channels” is a term used by retailers, not customers. The term “omnichannel” frames things from the retailer’s perspective, encouraging a sense of separateness, even if the purported goal is integration. Because the customer relationship spans all touch points simultaneously, a disjointed experience at any point becomes a source of customer disappointment.
Once you recognize that your frontline workforce defines a large part of that total brand experience, these in-store employees are elevated to the lofty role of brand ambassadors who ought to make every customer interaction a deposit into your vault of brand value.
More retailers are growing wise to this holistic approach. Some are investing in new store technologies like smart mirrors, fitting cameras, AI helpers, chatbots and endless aisles. While these enticements are fun and may create a richer in-store experience, I contend that positive customer experiences — and what keeps customers coming back to stores — won’t be fancy consumer technology. (And I’m the chief executive officer of a technology company.) It will be the personal interactions and assistance that another human being provides.
Naturally, that means investing in frontline employees.
Some digital-on-analog action
Despite spending $1,200 and $1,900 per worker on training and development, I’ve noticed that retailers often fail to provide workers with modern methods for execution while on the job. In fact, most in-store employees are still using printed binders and paper forms, which results in eight wasted hours per week searching for information — a vexing experience that leads to frustration and dissatisfaction.
Given this lack of on-the-job enablement, high turnover rates are hardly surprising, especially when 54 percent of employees report being disengaged. The good news: if retailers invest in engaging employees, the results can have a huge impact on the bottom line. Gallup reports that engaged employees are associated with 22 percent higher profitability, 21 percent higher productivity, and 65 percent lower turnover rates.
The key is a holistic brand experience, powered by engaged employees. Sounds fluffy, but I contend that will be a defining difference between retail winners and losers over the next ten years.
Arm your brand warriors with mobile
Mobile technology puts a powerful IT resource into the hands of frontline employees for the first time ever. How can we harness that opportunity for the good of the customer experience?
It’s something of a Hobson’s choice: engage in-store employees on phones and tablets as part of their work, or miss the opportunity altogether. Mobile represents a modern method to enable millions of frontline workers in a way that makes sense to them. Employees can execute against tasks and perform with confidence when they can search for and find mission-critical information without delay. Providing a means for real-time communication, collaboration and task coordination brings an efficiency to operations that translates directly to better customer service and brand relationships.
Consider Kohl’s. They now allow employees to use personal devices to access the Kohl’s app while working on the store floor. Helping customers find products, access offers and order products for delivery prevail over the risks of allowing personal device access while on the clock. This is what happens when customers are more important than lawyers.
The only way to ensure that your brand ambassadors deliver excellent customer service is to provide them with technology enablement tools, delivered on mobile. It’s no longer a priority but an imperative for retailers that want their brand to survive and thrive.
Matt MacInnis is founder and chief executive officer of Inkling. Inkling helps enterprises manage and enable their globally distributed workforces. Before Inkling, Matt spent eight years at Apple, where he ran the company’s education market development organization, based in Beijing. Both Matt and Inkling are based in San Francisco.
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