Store employees: The golden - and too often missed - opportunity

This is yet another piece to implore retailers to take the time and spend the money to train store employees. In preparation for this, I searched the RSR website for ‘store employee’, and the first occurrence that I could find is from 2012, when my RSR partner Steve Rowen stated, “the employee is the store's opportunity”, and he quoted research showing that over-performing retail winners overwhelmingly favour “educating and empowering our employees using technology” over other opportunities such as “provid(ing) the ability to locate and sell merchandise from anywhere in the company”. The other interesting thing about that finding was that it was clearly a winners’ strategy; average and under-performing retailers didn’t see the opportunity nearly as much.

Then in 2015, my RSR partner, Paula Rosenblum, published a piece in both the Retail Paradox Weekly and Forbes Online proclaiming 2015 to be the “year of the store employee”. While that piece focused mostly on retail wages (basically, a “you get what you pay for” point-of-view), Paula mentioned Trader Joe’s, making the point that “employees feel empowered, knowledgeable, and appreciated.”

Steve was back to the topic in October 2016, posing the question, “will 2017 be the year of the store employee?

So hopefully you get the picture: RSR has been pushing the idea of empowering store employees with knowledge and technology for a long time, but especially since the omnichannel revolution began gaining momentum.

But now here we are in 2017, and the popular press has grabbed onto the headline, “stores are DEAD!”. You can hardly get through a news week without hearing about the imminent demise of stores, never mind that even while retailers may shuttering unprofitable sites, many are also opening new ones. Paula has been leading the charge to breathe some reality into the discussion; for example, she was quoted last week in the Los Angeles Times: “The problem with a lot of these studies ... is they look at what’s dying, they don’t look at what’s being born.”

What all of the sturm und drang about the future of the store ignores is that shopping isn’t just a “demand fulfillment” thing; it’s also a social activity and it can be a form of entertainment. We humans love to engage socially, and we really love to be entertained. What has changed is how we socialize and entertain ourselves, not whether or not we do it.

So to me, all of these recent discussions about fulfillment robots in stores seem like hyper-ventilating. For example, a recent CNN Money post screamed, “robots could wipe out another six million retail jobs”, and went on to quote research to suggest that cashiers in particular and sales associates will soon be replaced by automated self-checkout technologies and “…more and more consumers using in-store smartphones and touchscreen computers to find what they need”.

Inevitably the discussion has to get back to the future of the store itself. Physical stores should be the best differentiator between a traditional retailer and pureplay eCommerce competitors. But stores are trending negative, not positive. The stats are compelling; while the vast majority of sales still flow through stores, the percentages are slowly but surely shifting to online. According to the US Department of Commerce, eCommerce sales now represent 8.5% of total retail sales, but while 1st quarter year-on-year total sales grew 5.1%, eCommerce sales grew 14.7%.

Why is that? Well, once you take price (which is transparent in today’s world) and instant gratification (which can be countered with same day or next-day delivery) off the table, you’re left with … store employees. But to judge from recent consumer data RSR recently gathered, there’s a big disconnect between how retailers feel about the level of service being provided in the stores, and what consumers think. The #2 problem with store shopping according to consumers (after “prices are too high”) is “lackluster services in stores”), while retailers feel that the top problems are “price transparency”, “competition”, and “employee productivity”.

Wow, what a disconnect!!

Upcoming RSR report on the state of the store

My RSR partners Steve and Paula have co-authored a new soon-to-be-released report on the state of the store, and the results are fascinating, if also more-than-a-little disappointing. Good news first! On the plus side, retailers have recognised that better quality employees are far, far more important than self-service or robots. And they recognise that getting new technologies rolled out is almost as important.

On the negative side, here are some alarming findings from the study:

When the study delved into questions about what stands in the way of making the stores a better shopping experience for customers and a more profitable endeavour for retail companies, classic “people/process/technology” problems emerged. Retailers have untrained staffs, inefficient store processes that pull employees off the selling floor, and legacy technologies that don’t support enhanced customer services.

So retailers face some stark choices. At the risk of sounding like some street corner prophet of doom, I say that retailers need to face up to the need to #1, train their employees to be better at customer service, and #2, empower their employees with the same technology and information that consumers already have, so that they can at least talk intelligently to customers about products and services.

Or failing that, just shut the store down and do something else. Really.

This article has been republished with permission from RSR Research. Read the original article here