WHAT EVER HAPPENED TO GREAT RETAIL TALENT?
Today, the business model for department stores or big box operators is to have the vendor base do the heavy lifting and take the big risks. It has become their total responsibility to put their inventory in stores, manage the inventory, manage the supply chain and make sure that the gross margin is an acceptable one for the retailers. Nobody on the retail buying side is making those decisions, so the criteria for evaluating retail careers and the business models for buyers and divisional merchandise managers has been diminished. Years ago, those were positions of power, but that’s no longer the case because the decision making and number crunching starts from the top. Buyers and dmm’s don’t decide what they buy, they are more or less told, so their power has been substantially reduced. They have less responsibilities with which to showcase their talents.
WHERE CAN YOU FIND GOOD TALENT IN THE INDUSTRY TODAY?
If you take a look at vertical retailers such as Abercrombie and Fitch, The Limited and Talbot’s, you can get a good sense of talent in the industry. They have to take risks in terms of their product. They don’t go outside to buy it and do a lot of their production and sourcing from inside. Subsequently they take responsibility for the product they make, the amount they make and how they distribute it. So the opportunities in retailing for individuals, in terms of talent, is on the product development side.
WHAT ARE THE KEY AREAS OF POVERTY IN THE INDUSTRY?
The key area of poverty is in the lack of training programs to recruit young people — train, promote and move them through an organization. Furthermore, it’s not that there aren’t enough good divisionals or buyers out there, it’s how they are moved within organizations. If a buyer, dmm or somebody in planning leaves, then a company has to have the bench to start moving people up. And if there’s a stall in movement or a decline in business, then other options and incentives for employees need to be created.
WHY? IS IT RETAIL’S FAULT?
Many companies have done away with these programs as a cost-cutting measure. However, it is vital for the industry that they be reinstated and that directive needs to come from the top. It’s essential that industry executives realize that the long-term success of their businesses relies on these programs and this development of talent.
IS RETAILING SEEN AS A LOW-STATUS INDUSTRY? WHAT CAN BE DONE TO CORRECT THAT PERCEPTION?
I don’t think it’s considered a more low-status industry than any other. That perception rests largely on a company by company basis; it depends how companies project themselves to the public. Store environments are key and need to be interesting. Young people find the H&M atmosphere compelling, but if they venture into Macy’s they’re probably unimpressed. Until Macy’s really cleans up their stores and make their first floors exciting like they were years ago, it’s not going to encourage people to shop. I think associations like the National Retail Federation need to begin investing in ad campaigns, sort of like Cotton Inc. does, in order to raise their profile. In terms of a career for young people, there is no reason why the retail environment can’t make itself compelling.
Take Target for example, they market themselves as an exciting place to be, and they’re successful, in part, because of that. Years ago and up until recently, the Gap made its environment a cool place for young people. But companies need to start recruiting at college campuses in order to foster interest. Instead of sending human resources people, however, they should send dynamic executives to recruit.
CAN RETAILERS LOOK OUTSIDE OF THE RETAILING INDUSTRY FOR GREAT TALENT?
Yes. Companies have to think in terms of their business model. What is the most important skill for a specific position within their organization? If it’s leadership, for example, then they can look for candidates that have strong business backgrounds, but don’t necessarily come from traditional retailing companies. On the other hand, candidates need to have an understanding of what a retail business model is like. Take, for example, Arthur Martinez, who became chairman at Sears and at one point was a vice chairman at Saks. He did not grow up in retailing. His background is engineering, and he started his career at Exxon. But clearly his business acumen made him a great asset. Beyond that, the problem in this industry is that we don’t do our homework, we look at the surface. We look at the person with the biggest title instead of digging and finding out who the people supporting this individual are and what their roles are in making a particular business division a success.
Editor’s Note: This is the first in an occasional series of articles examining the issues surrounding human resources in the retail and apparel industries.